Is it a Bull Trap ?

DEFINITION of 'Bull Trap'
A false signal indicating that a declining trend in a stock or index has reversed and is heading upwards when, in fact, the security will continue to decline.

Read more: Bull Trap Definition | Investopedia https://www.investopedia.com/terms/b/bulltrap.asp#ixzz41jCOOrt3
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Historically The chart pattern matches - MACD / RSI / SOCKO two places in the chart




Red : It is a Bull Trap and market went much low
Green : Market did not rush to a bull market , but corrected in time

Accompanied by Good Earnings of 2011 and 12 the bull run started





Thats why I believe the earnings are not yet supportive of a Bull Run

 

Thanks Yembee

 

Thank you BB for asking thought provoking questions ...

 

just wanderings of an idle mind

i think, you'd like this - how to trade a bull trap

don't know about the charts, but the earnings and growth are certainly elusive, at least, we agree on that

 

I am also feeling worried about bull trap but if we sell and markets shoot up it looks very foolish. So what to do? Avoid fresh buying and also reduce stocks?

 

The above link given by BB may help

 

Can be used to resuffle portfolio to get rid of poor quality stocks to reduce no of stocks in your portfolio and investing that money on strong ideas of your existing portfolio.

 

Dear Srouta,
me too feel there might be small and last dip . But I think most of small investors did not took fresh position so nothing much to loose. Frankly speaking its real difficult to predict. So either its final dip or we are at the start of the uptrend .
In both the scenario we need to buy or average good stocks . I think for selling , its already late .

Thanks & Regards,
Prashannt

 

yes friends. i also think that only earnings growth can support a sustainable rally. budget rally can be reversed anytime.
an interest rate cut will be a good thing to happen now to boost business performance.

 

Indian growth will surprise many who criticize existing government for everything .
Opposition need to keep finding petty issues to target government .

Business week 23rd Feb magazine has very good article on how road,power and railways(all on track) alone are good enough to drive Indian growth to 8+% . Government is taking lot of good long term steps which will transform India for sure . We will see a massive bull run in Indian equities in coming years .

Thanks & Regards,
Prashant

 

Dear all,
please watch Modi's reply in LS now . Point point by info on what goverment has done , unmatched comparison with shameless performance by UPA .

Thanks,
Prashant

 

How it is relevant to the Topic

 

Indian equity market is moving up with a great speed in last 3 days and everyone seems to be bullish all of a sudden specially after the presentation of budget on 29th February,2016.Do you think that everything has undergone into a drastic change after presenting of the budget? Do you think that global recession is over? Do you think that China's GDP back to normalcy? Do you think that FII started to flow back their funds into India even when Federal Govt is likely to hold on to or increase their interest rates in USA?

Whatever little experience I gained in this share market during my short tenure as an Investment Banker, I strongly feel this current up-move in our equity market to be watched carefully and cautiously without getting involved emotionally. Exactly a year back our NIFTY had topped reaching to 9119 and few days back it touched to the bottom of 6825, shedding away almost 2300 points.However, last 3 days the market is making a very handsome speedy gains and now hovering around a level of 7500.

Generally, a common man gets trapped in such bullish phase of market since he is not aware of whether this is a start of new bullish phase or a pull back rally after a continuous sliding since past one year. Presentation of positive Budget may change the perception or outlook temporarily unless it is backed up with powerful implementation, which seems little doubtful in the current scenario where the opposition is not allowing to pass 2 major bills - GST and Acquisition of Land. If these bills don't get pass in this budget session of the Parliament, I don't think the FIIs would flow their funds into our market. Also the Federal Govt is not likely to bring down their interest rates in near future and so I am doubtful of FIIs putting their money in India in near future.

I just wish to make you cautious before making any investment in current bullish phase and if at all the common investor feels of loosing this opportunity then he may invest just 20% of his Investment funds. I always believe in confirmation of such bullish phase. Based on my technical studies, this rally may go up to 7640/7680 being a first retracement of earlier bearish phase. If any positive developments take place in the meanwhile then the equity market will run into a new bull phase otherwise it will come down to test the earlier bottom level of 6800 or may even go below it.

So, keep in mind one maxim, BUY LOW AND SELL HIGH.Common person does exactly opposite and blame to share market and his luck.
One can make good money and definitely earn better returns than the Banks interest rate with little prudence and common sense.
For instance, those who invested rs 5 lacs in SBI @ 145/150 few days back would get nearly Rs 1.25 lac in 15 days against of rs 50,000 @10%in a year.
Buy in panic Sell in euphoria...stay long term by investing only in blue chips.
I have just shared my thoughts.
SHREE SWAMI SAMARTH

 

Very good advice

 

Ought be very careful ... More articles have started to flow w.r.t the stock market crash of 2016

https://www.profitconfidential.com/economic-analysis/upcoming-stock-market-crash/

https://www.moneycontrol.com/news/w...rsting-everywhere-yale-professor_5755821.html

 

is it your post or just some copy paste? if you are an investment banker, i'm surprised to see you still betting on the US Fed holding or increase key interest rates amid all the talks of a negative interest rate not ruled out by Janet Yellen in a recent testimony in Feb 2016

in another post where you share a video, there's an extremely bullish view shared by Goldman Sachs that the Indian economy will soon grow at 9-10%

which one would you like to standby or reconsider? can't be sailing on two boats!

 

Both are copy paste. I think the name of the author is mentioned at the end. And no, I am not an investment banker, just an ordinary investor, struggling even for air