Category: Your Money

The Golden Cross and the Death Cross

shyam August 17, 2011February 19, 2014

The Golden Cross represents a major shift from the bears to the bulls. It triggers when the 50-day average breaks above the 200-day average. Conversely, the Death Cross restores bear power when the 50-day falls back beneath the 200-day. The 200-day average becomes major resistance after the 50-day average drops below it, and major support after breaking above it. When price gets trapped between the 50-day and 200-day averages, it can whipsaw repeatedly between their price extremes. This pinball action marks a zone of opportunity for swing trades.

Caveat: Moving averages emit false signals during the “negative feedback” of sideways markets. Keep in mind these common indicators measure directional momentum. They lose power in markets with little or no price change.

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Categories Your Money Tags technical

Weekly Market Comment (US) – Hussman

shyam August 16, 2011

Image via Wikipedia

A must read: http://www.hussmanfunds.com/wmc/wmc110815.htm

Short-term measures of market action became extremely oversold mid-week, and investors took the Fed’s latest statement as an occasion to launch a fairly typical “fast, furious, prone-to-failure” rally to clear those conditions. How could an economy already plagued by “moral hazard” possibly benefit from the belief that the Fed had provided a “backstop” for speculative risk-taking?

It is only that demand that has allowed inflation to remain low despite the massive expansion of government liabilities far exceeding GDP growth, and of misallocated credit that has produced losses rather than surplus output.

Categories Your Money

The Psychology of Technical Analysis

shyam August 13, 2011

We created a compilation of previous posts on StockViz for you on the psychology of technical analysis.

Hope it helps! [scribd id=62075096 key=key-vo5wkdqz59lq3bjtgqq mode=list width=600]

Categories Your Money Tags Psychology of TA

Reliance Industries – Too big for India

shyam August 12, 2011

NEW DELHI, INDIA - NOVEMBER 08: Indian Industr...

Image by Getty Images via @daylife

Over the following four and a half decades Ambani took plenty more chances, making bets on vast projects and using brawn and guile to deal with officials and politicians. Today RIL is a conglomerate active in energy, refining and petrochemicals, with a market value of $55 billion, or a tenth of the worth of India’s stockmarket.

At the most recent AGM in June some attendees grouched about the stock price and low dividends; today, with the shares at 770 rupees, they might be grumpier still. Though RIL’s motto is “growth is life”, its valuation implies that the years of plenty are over. Of RIL’s main business lines, refining is chugging along, and the firm is investing to double the size of its petrochemicals unit.

An important factor may be that the pool of potential outside investors has shifted from Indian individuals to institutions and foreigners, who are typically sceptical about the long-term prospects of the refining and petrochemical industries, which have a lousy track record in most countries.

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