13 February 2011

Breadth Indicator : Week Ending 11 Feb 2011

There has been significant improvement of breadth, when compared to distance away from lows. Thanks to short covering on Friday, Nifty also managed to close above 5300. This rally is coming from very oversold levels so higher levels can be expected.

In terms of breadth, for any rally to be significant check for the peak of this chart to be made around 0%. Till then majority is still underwater and the process of lightening the portfolio can start anytime soon. 140 stocks out of 200 odd are trading in the band of -80% to -50%, this market has been virtually killed by the FIIs. The direction of the market will be governed by the "Shorts" for some time to come. It would be interesting to see if they are in weak hands.

Trading advice would be not to long stocks that are flying in the short covering rallies which I expect next week.


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