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The US markets closed flat overnight. A jump in New home sales numbers and an increase in bookings for consumer durables helped the S&P recover from a four hour meandering in negative territory. The trend in the US markets remain firmly up.
Among Asian markets, Kospi, Nikkei and HangSeng are still trended up while Shanghai Composite (SHCOMP) and HSCEI are trended down. (I use the RSI as my trend delineator). The Indian Nifty is trended up as per this measure.
Commodities have been trended up for most part. Crude, Copper, Nickel, Lead, continue their uptrend. GOLDS Comdty is currently in a downtrend. The Baltic Dry Freight Index is in a sharp downtrend. It might see a brief spurt up given the sharpness of the correction but the trend is clearly down.
Given all this and the fact that Nifty is hemmed in into a tight band between 4750(overhead resistance) and 4470(trendline support), I find it easy to say that I will cut my long positions if Nifty trades below 4650. If it gaps down below that level then I will wait for the 5 min low to be broken. I will not go short since the Nifty trend (using RSI50) is still up.
One of the things that I have always wanted to do was to come with stock recommendations. Finally I managed to get my search going on the bloomberg. So I have a couple of recommendations for you. One of them is Sesa Goa. If Sesa trades above 228.50 then it can be bought with a stop at 211.50. Target into the 270s.
Another stock recommendation is to buy SAIL at current levels with a stop at 158. Target close to 190.
The one problem that I face as a proprietary trader is that once the positions are taken and the market starts to move in your direction, there is nothing much to do. There is great temptation to do some trades just to ensure that there is some activity. That would ofcourse not be good for my trading equity. One can read a bit but I was never much into reading and reading books on trading is the last thing I want to do. So I try to crack some puzzles. It helps pass the time as well as keeps the mind active. So here is one for you.
"There are 12 balls of the same size. The weight of one of them is different. You have a physical balance(The one with pans on both sides) You have three tries to determine which of the balls is different and whether the ball is heavier or lighter" How would one do that? Happy trading!!!
I cracked the puzzle. Try one will give you which of the six is heavy. Take the heavier lot of six and divide in 3 each. Try 2 will give you the heavier lot of 3. Take the heavier lot of 3 and remove two of them and keep on the weighing scale if they balance heavier one is in your hand else it will show up on the scale.
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