Fundamental Analysis: Is the market forming a new bottom?

The financial collapse of 2007 and the recession that followed left many economists on the defensive. News programs, magazines, pundits, and even Queen of England all asked some variant of questions, why didn’t you see it coming? Some in the economics community wrote articles or convened conferences to examine how they could have gotten it so wrong; others engaged in a full-throated defense of their profession. For many who were hostile to the fundamental assumptions of mainstream economics, the crisis was proof that they had been right all along: the emperor was finally shown to have no clothes. Public confidence in authority was badly shaken.

-Excerpt from the Fault Lines by Raghuram Rajan

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How to Read the Market Direction?

“You are better off staying on the sidelines in cash until a new bull market really starts,” – William J. O’Neil

Investors spend a disproportionate amount of time buying a stock, as compared to selling it. A good game plan for investing is akin to the war strategy used in the ‘Mahabharat,’ known as ‘Chakravyuh.’ The young Abhimanyu knew how to penetrate into the labyrinth formation, but ultimately met his death in the ‘Chakravyuh,’ because he did not have the knowledge of its exit strategy.

It is often said, “Only when the tide goes out, do you discover who’s been swimming naked.”

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Still the No. 1 Stock Market Tip: Always Cut Your Losses Short

Currently, the market is in a Downtrend, as Nifty is trading near its five-month low. All the sectoral indices are trading below their 50-DMA, indicating broad-based weakness. In such a scenario, it is advised to trim positions and stay in cash rather than making huge losses. The importance of taking small losses is emphasized in this article.

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Industry Update: November 2019

Nifty Scales New Highs After Consolidating Gains; FII Buying Continues

In November, Nifty consolidated gains and was trapped between 10,800 and 12,000 for most part of the month. The gap between Nifty and its rising 21-DMA shrank as a result of the consolidation during the month. At the start of November, Nifty was extended 3.5% and 6.0% from its 21- and 50-DMA, respectively. Currently, Nifty is trading less than 1% and 3% above its 21- and 50-DMA, respectively. The market remained in a Confirmed Uptrend and the distribution day count remained low during the month, with the addition of two distribution days in the last week of November. The distribution day count is now at four. FIIs/FPIs were net buyers in November (Rs 13,000 crore), while net selling from DIIs was Rs 8,000 crore. Continue reading “Industry Update: November 2019”