October 2014

 MARKET ABOUT TO THROW IN THE TOWEL . . .

Trading levels --- 13^th   / 17^th  October   2014

Another truncated week but this time market gives 3 closes out of 4 below 50 DMA which has happened after 24^th march. Weekly close is also below 50 DMA. This is significant and indicates weakness ahead.

Most sectoral indices, except IT / AUTO / PHARMA and MEDIA, have closed  below 50 DMA.

Most global indices have closed below 50 DMA and on the verge of closing below 200 DMA. You will recall earlier – 2 weeks ago – I had mentioned that most global indices are showing topping out patterns and 30/40 %  cash can be taken off the table.

Last week I had written that trading bias will remain NEGATVE TILL WE BREAK-OUT ABOVE 8050. I had also written that IT majors will show significant weakness on Wednesday / Thursday – before INFY results on Friday.

 We have had very weak IIP  nos which were released late Friday evening confirming that 5.7 % GDP growth shown during first quarter was more like a flash in a pan.

Overall the set up is looking very wobbly and a hung assembly in Maharashtra and Haryana  - with BJP doing not very well - as expected, will rock the boat viciously.

I have spend some time today studying weekly global market set-up and it looks possible that we may have 4 to 7 % drop from current levels in next 2 to 4 weeks. If that happens , our market being a high beta market can drop by 7 to 10 %  and that means a cut of 10 to 12 %  for your equity portfolios.

How one protects from this possibility ? …. Book 30 to  40 % profit and move to cash. Wait patiently on the side lines and re-enter after the storm  has passed.  If the storm does not play out, you may re-enter - may be at same or slightly higher level. NOT MUCH TO LOSE but you are giving yourself a chance to save yourself from a 10/12 % cut. SEE IF THIS APPEALS TO YOU.

Incidentally, I could exit Reliance position with a small profit on Friday.

As I always say, we have to play percentages to make money. Bold bravado or blind  consensus following  does not help.  I HAVE JUST GIVEN YOU SOME FOOD FOR YOUR GREY CELLS.   WHAT DO YOU SAY ? ? ?

OCTOBER 2014 TRADING LEVELS are out   over the long weekend. You can have a look at the same before entering fresh trades. I have also released CY 2014  trading levels  on my website – http://www.sumamura.com/sumamura-messages/. 

Please remember CAPITAL is always scarce  - even for Mr Buffet  and needs to be respected.

My monthly trading levels are out and paid members have them. At 3,000 rupees a year, they provide tremendous value for money proposition.

Keep logged on to yahoo messenger for guidance related to investment levels on specific stocks. I will be putting some of those recommendations on my website also under messages tab as well.

I am available on yahoo messenger on most of the trading days and you can add me on your yahoo messenger. My yahoo id is madhavranade1

Keep watching my website www.sumamura.com closely for further inputs. You need to register and login to see modules section where all the levels for different timeframes are  shown.

You can view individual modules for as little as 3,000 rupees per year. A package for all  8  modules for  just 30,000 rupees  for the full year.

Please call me on 9371002943 for more details.

Indices  weekly levels