Is falling Gold Good News for Indian Stocks.

Analysts are suggesting three positives for the Indian Stock markets:

01. Falling Inflation
02. Lower Crude prices
03. Falling prices of Gold

Our current account deficit is large mainly because of huge imports of Gold and Crude, therefore, a fall in prices results in lower deficit which could start a virtuous economic cycle.

As Indians, let us hope so.

As traders, we can trade the markets without getting influenced by news or perception. As of now, the Nifty is in a  downtrend, for the short term trader, a trading range is developing with resistance at 5600 and support at 5500. Trade a break from this range on either side. If the news is going to make the markets bullish, a breakout will  put us in a long trade.

Wyckoff Made Easy

Derek Hernquist provides an excellent post on influence of demand and supply on security prices, in his post titled “Supply Side Trading”, which you can read here.

I had the opportunity to hear Roman Bogomazov in Singapore during the 2012 IFTA conference. He gave a brief 10 minute presentation, an excellent talk on wyckoff. His way of explaining a complex topic was a wonder.

Excerpts:

Going through slides, Roman commented that analysis of longs should always start with an assessment of supply.

I think it represents everything that is right about price analysis, and everything that is wrong about media narratives. The presence of low supply means an absence of a juicy story, and thus can get ignored. But for me it is the critical factor in finding low risk trades, and on occasion having one of those turn into a high reward trade.

My Notes:

Please read the full post, as well as the links in the post.

Today, Puneet Rathi gave an excellent presentation on synergy between derivatives and technicals, at the monthly ATA meeting in Delhi. I wrote about the meeting a few days ago. IF you live in NCR and did not attend, then you are missing out on a lot of learning and education.