A few days back (23 Oct. to be precise) I posted the chart of the Nasdaq top 100 index while referencing to Trader Mike’s post of a potential symmetrical triangle in the Nasdaq Composite index. I figured that it is time to take a look at that chart again. There are two charts posted here and you might find it worthwhile to spend some time studying both. Basically I still think we will see around 1140 in the Nasdaq 100 ( which roughly corresponds to 1400 in the composite). The rest of the comments appear on the accompanying charts.
I warned you folks about this chop in Sterling Pound . In just 40 minutes, Sterling had dipped from 1.5830 to 1.5720 and raced higher to 1.6020. What should one do in such a market? The most sensible thing to do is to go out for a snack. Why get involved in the middle of a deadly game? Wait to see if we get to 1.6450, and maybe sell a small amount there. If it goes down directly, well, nothing is lost. I always believe that money not lost is money gained. Enjoy your weekend. Ramki.
I hope you took profits on Citi above $14.50, locking in a 25% gain. I suspect that the current decline will be the final push, the catharsis! (Here is your chance to click on this word and check its meaning!). Unlike the previous trade, we should aim to hold the stock for longer. In time, we will see the price double. Don’t be alarmed if it falls more than my suggested target. (Remember, I originally said we could see it down to $10.40. Refer this post ). We are turning medium-term investors in Citi now! Good luck!
On 3rd November I warned you to get out of your Reliance Industries holdings near 1480. (see the post here.) I think the stock will bottom out between 855 and 905. However, being small investors, we should start buying from Rs 925. Sure, a lot of bad news could still come from India. But at this level, Reliance will be a great buy for the medium term.
The most difficult time to trade any instrument is when it is in a complex 4th wave position. I think the Euro is currently in that position. You might see the currency come down, and just when you think it will continue lower, it could abruptly turn around and race higher. Again, when it is near the top of that rally, many pundits will call for it to go higher still, and hey presto! we could see it dumped all of a sudden. Take a look at the chart and stay away from the Euro for the time being.