- The biggest fallacy out there now is the perception that stocks are the new money market because money has no where else to go.
- All the trader talk right now is centered around USD strength and its impact on currencies and commodities around the world. Also, When will Fed raise rates - sooner or later
- Countries with large debts denominated in dollars’ are most at risk, and further dollar appreciation could reduce the creditworthiness of many firms and potentially include a tightening of financial conditions.
- Relative Purchasing Power Parity (RPPP) theory: This theory says that the currency of the country with higher inflation rates will depreciate compared to the country with lower inflation rates.
- As per RPP thoery: 1 USD = 78.8 INR. Right now, INR is 28% over-valued against the USD
- The RBI publishes, on a monthly basis, a Real Effective Exchange Rate (REER) for INR. The latest REER reading is 109, which points to an over-valuation of 9% against a basket of 36 currencies. INR depreciation appears inevitable
- If the markets were certain then there would be no markets. No one can give you a 100% guarantee of what market will do; all we know is what it can do
- The Sensex lost 338.70 points or 1.19% to settle at 28,119.40 on Monday. Is sensex now heading towards 50 dma?
- What's next traders are watching domestically?: IIP data for October 2014 on Friday, 12 December 2014. Same day, the government will release annual rate of inflation based on the CPI for urban and rural India for November 2014.
- Large Cap IT stocks in correction mode. On Monday, Infosys was down 4.8%, TCS down 2.6%, and HCL Tec was down 2.3%.
- The Underperformance in Reliance continues. The only good news: stock continues to hold 920 as support area
- Bharti broke down below 100 dma. Now, even Idea going down sharply with no clear are of support. Technically Idea should hold 145-146 on closing basis.
- Agro Tech Foods: How should one read volume surge? Smart money buying
- Crompton Greaves is now at 200 dma. If stock bounces on Tuesday, then traders and investors will look to buy with closing stop loss below 200 dma of 182
- It's difficult to catch a vertical breakout. One ideally waits for pullback - but then some never pullback like Zydus Wellness - two weeks of straight gains
- Some Breakouts are very turbulent. Lots of volatility around breakout point and then a clean move. Example: Raymond
- Momentum Watch: Voltamp made a big move - gap up. Post that move - stock seems to be consolidating. Will there be follow through move? Very near term traders can hope with closing stop loss below 770.
- The biggest problem in charting is wishful thinking. Traders often convince themselves that a pattern is bullish or bearish depending on whether they want to buy or to sell.-
- Pipavav has made a good move in last couple of days. But chart is very unimpressive. Stock continues to be avoid
- Reasons chase prices: The expectation that 2015 will be a year with too much oil in the market. Various analysts claim that the world will be oversupplied by approx. 1.5-2 million bbl/day of oil
- 2014 has been comeback year for Chinese stocks. The Shanghai Composite Index is up some 40% since the middle of the year. Last Friday, turnover in Shanghai surpassed 1 trillion yuan ($162 billion) for the first time ever.
- Consider nothing happens in China without active support of Chinese Govt. Is Govt behind the surge of Chinese stock market?
- All markets are not lucky. Malaysian stock market is now trading at 12 month lows...This is KLCI index
- Do more of what works and less of what doesn't. - Steve Clark
- "Understand your limitations. Everyone has limitations"
Please share your comments on what you think of market observations, market and trading in general
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers