too many gaps...

what worries me is there are too many gaps in the sensex today was the 3rd sadly I'm afraid this baby will have to go for bottom testing atleast, the doomsdays may be come right...take care

Hi Czar,
Any specific information/chart/analysis you are refering to? Would really appriciate if you could post some details.

Thanks in Advance
Jude

like i mentioned sensex made 3 gaps in this runup from the 8.8K levels which have not been covered - 9589 / 10,252 / 11,330 - the 3rd gap will have to cover pronto so we will get verification in 1/2 days...many stocks also have made similar gaps... looks like the new top will have to wait... tread carefully... today was the 3rd & final exhaustion gap, sadly the 1st gap is below the recent higher bottom, covering which will break the higher top higher bottom pattern

Hello Czar,
Having a gap up does not necessarily mean tht the gap will be filled. Thou in some cases its true tht the gap has to be filled, but you'll see many instances where the gap up marks a major support level. If this gap is broken, then it becomes a major resistance level. So all is not lost, and a higher top may be viable, but only time will tell. Keep a close eye as sensex has moved to over bought levels, but an eventual target of 11,750 and then 12,220 seems to be achievable.

Jai Shewaramani

I agree with Jai. Gaps in the direction of the trend portray strongness of the trend. Earlier, there was an understanding that gaps are there to be filled. That may not be the case if the trend is strong. If you can get hold on to Dave Landry's patterns, there is a pattern called 'Explosion Gap Pivots'. The setup is there to take advantage of the gaps in the direction of the trend.

Until BSE500 comes back to earlier trading range. do not question the trend. Look at the strongness aboard all the sectors. This the best time to put your money (wait for pull back. Market has been up for many days).

On another note, it is always important to hear and understand the other side of the argument.

I agree but i have seen sensex always fills gaps specially the big sized ones which are present now.... also retracement of previous fall is bit extended but not out of woods... historically speaking I remember the situation in 2000 when the interest rate hikes stopped which boosted the US markets for a short time but then the same cracked due to anticipation of fall in rates & slowdown in growth... I am not convinced & ealier in pankaj's thread I mentioned levels of 11.5 / 11750 being achieved maybe even strech to 12K but I would not deceive myself thinking gaps may be by passed... also Jai you are right a gap does become a major support till the rally lasts, see the last rally from 8.8K to 11K or the one from 11k to 12.6K...same situation, given the benefit of doubt 2 gaps may be filled till 10,252 & maintain the higher bottom trend...

on a lighter note cnbc analysts have become bullish again means a fall is near...

lol

Well Baron my friend u do have a sense of humor .

By the way talking abt CNBC, did u notice Udayan, the chief anchor, when commenting abt TA, always calls charts 'graphs'. ( his philosophy .. A rose by any name etc etc .... )

AGILENT
Psssst ... Do u think he has a thing going with his cute li'l anchor (who happens to be) from his state ? Just asking ....

Definitely 11750 levels would be worth watching..I was sure that sensex would not go here..even if it goes, there would be a downside before it touces 12020.....but sensex is up again...something worries me.......

Surely, in a strong bullish trend, we can dare to overlook gaps...but the current trend is created...it is not present there.....

in this case, we cannot dare to overlook last two gaps.....
Still, I think the market is in overbought situation, we can stand aside as of now and do some fishing from lower levels.......

all the best..

ganeshhity

I feel this market will correct now but not deep to throw off the shorters & then make a lower top from the current top & succumb... long or short the mob is going to be trapped...be carefull I know its difficult to miss the moves & stay away, but I gave up trying not to be a compulsive trader long time back... RIL is back in action to prop the market...game is obvious

Agilent... I did notice them playing footsie during break...hmmm & then he pretends to wipe of his smirk...

I wish there was an ignore button on my tv where I could set it to ignore "fair enough & structure is +ve" its really not fair...

Q) At this moment what side of the position you are taking? Long, Short or Standing Aside.

At any point of time in the market, there is always a possibility of going up or down. Inspite of the good bull run we had, didn't we go down in May. That risk is always there trading in the market. But, you have to attribute the probability to both sides of the trade (UP/DOWN).

Q) What do you think is the probability of market going up verus down?

If it is 50/50 or 60/40 or 40/60, it is better to stand out. My view is 80 UP/20 DOWN. This can change if the indexes go back to previous trading range. Really, it would take 1 day that to happen. Again, we have to weigh the probability of that happening.

OK. Lets think for a moment you theory has a value (what I mean is 70 DOWN/ 30 UP). Then

Q) Are you going to take short position now? If not, what market conditions will make you to take short position? If yes, can you suggest some scrips that I can look at?