I can help you with stock chart reading

[Yagnesh07]

@ insider: Any recommendation for present condition?
any short term call?

 

[jamit_05]

Hello,

Please look at the monthly chart of Infosys (for ex.) and bring your attention to the volume.

One will notice that there is a distinct bifurcation in nature of volumes around 2004. After 2004 the volume suddenly thinned out.

Mathematically,

Let,
A = total volume of shares traded from 1998 to 2004 (adjusted for spilts not bonuses, since they do not show in the chart data)

B = total volume of shares traded from 2004 to current, 2012

Our focus is A/B;

For infosys,

A = 5003679962
B = 998802680

The ratio A/B = 5

If A is almost 5 times greater than B, then one would think that participation was relatively weak after 2004. After 2004, even the major monthly supports do not have serious participation. Therefore, any semi-serious cue (global or local) could easily break these supports. This is because,

Ones who bought before 2004, at sub-700 prices, would be happy to book profit at current prices. No wonder Infy saw the sharpest fall in its recent history.

Please provide your views, especially contrary ones.