Daily Big Picture – Global Optimism Lifts the Market

MarketSmith India_William Oneil IndiaToday’s Action:

The benchmark indices pare yesterday’s losses. Broader indices outperform key composites.

Daily Market Review

The market staged a good comeback in today’s trading session after yesterday’s subdued performance. The benchmark indices started marginally higher as investors took a cautious stance amidst the ongoing geopolitical tensions. However, as the session progressed, the indices built on early gains and ended the day significantly higher. Continue reading “Daily Big Picture – Global Optimism Lifts the Market”

Daily Big Picture – North Korean Woes Continue to Plague Market

Today’s Action:

Geopolitical tensions weigh on the benchmark indices. Recovery in the second half trims losses.

Daily Market Review

The Indian market started the week on a negative note, tracking news from the Korean peninsula. The benchmark indices witnessed selling pressure after the North Korean military conducted fresh nuclear test over the weekend. A similar state was observed in other major markets across the globe. Earlier today, South Korea reported that North Korea may be preparing for another missile launch following its hydrogen bomb test on Sunday.

Continue reading “Daily Big Picture – North Korean Woes Continue to Plague Market”

Beware of Distribution: Too Much of it in a Base Can Play Spoilsport

MarketSmith India_Learning Article

“For the best prospects, do a price and volume check of each week within the stock’s base to help you conclude if the stock is showing sound accumulation or too many price and volume defects. Next, do a fundamental analysis checking for excellent earnings, sales and return on equity..” – William J. O’Neil, MarketSmith Founder

In technical analysis, the process of identifying supply and demand in a stock starts with analyzing price and volume on the daily and weekly charts.

Are up days or weeks accompanied by heavy volume? Does the stock close in the upper half of the trading range, either on the daily chart or the weekly one? And on the down days, are they trading on light volume? If a stock falls on heavy volume, does it close in the upper half of the trading range? Answers to such questions in the affirmative strengthen the overall quality of a base pattern.

However, in some cases, the stock price might be volatile as the base takes shape, resulting in a “wide and loose” pattern. There might be a lot of institutional selling, in the form of distribution days or weeks, in the base. Both are negative and can keep a lid on a stock’s breakout.

Continue reading “Beware of Distribution: Too Much of it in a Base Can Play Spoilsport”