Budget Vs Charts

I know the buzz has been around on what the budget would or would not do. For myself, I have no expectation from the budget. I mean I am not just neutral but numb about it. Indian policy makers seem to specialize in taking 9 steps forward and perhaps 8.5 or 9.5 steps backwards at the same time; perhaps they work in an environment or within a physical and mental structure or system that does not allow them to do otherwise. However, I have gotten used to wait for the budget and then take actions that make sense in the light of the budget decisions handed down.

At any rate, it is very clear that the budget event injects a dose of uncertainly in the market. I am not one who likes to bet big on such events - if that means that I miss out on a big move on the budget day so be it. Even though I am a trader, I do not like to trade blindfolded. Besides, this is just one day in a year, there are approximately 259 other trading days in the year.

Put another way, when things are not clear I prefer to be on the sideline and have no position, UNTIL the price action says which way the trend is likely to emerge.


Therefore, let us return to charts. The last day of the last week, 3 July, saw a big struggle between 4340 and 4375 for four hours(!) before the bulls finally broke through the day and ended very very close to an important resistance of 4450. If this momentum continues, and if spot nifty trades and closes above 4450, we will have a break out which will negate for the time being the the correction that began in mid June.


In other words, it seems that it is advisable to trade with positive bias above 4450 with SL at 4350.

Now is that not better or at least easier than speculating on budget moves?

For me, between budget and charts; there is no question - I choose charts.

If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com

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Disclaimer: The above analysis is just that - my analysis. If you choose to trade on the basis of this analysis, you will be solely responsible for the outcome of the trade - profit or loss. Please keep in mind that trading and in particular day trading is not for the novice and there is significant risk of loss of capital in trading.