Indian Equity Markets - Few Points to Take Note Of...

I was trying to scan the Indian equity scene today trying to guage the pulse of the markets. In any market there are variety of participants - buyers/ sellers/ market makers. The buyers can as well be categorized as playing on monthly timeframes, weekly timeframes, daily and intraday as well. Hence, everybody has their onw reason to sell or buy.

Now scanning the Indian markets back to 3 years there few things to note

1. The larger trend of the market is definitely down - heaviest of losses are in those related to banking, auto industries (Not all)
2. The scrips which have good liquidity - there are divergent stories in them. Off lately in midcaps almost everyone has been butchered in last 3 weeks. Some of them have fallen by as much as 50-60%
3. Most of the stocks hitting 52 week highs are the ones having almost no lquidity hence you cant have a trend following system to make money
4. Thus you may want to find special situations stories wherein longs can be positioned to speculate on the rise of the scrips
5. In summation - even scrips which were trending upwards broke down after distribution was done and now are trying to either abate the downfall or the momentum of fall is now slowed down

This market at the moment is certainly is not for uninformed inverstors or traders. Capital preservation should be the top priority. There are too many headwinds internationally right now that can be fatal to the prices.

Certain triggers need to be in place for the prices to move upwards in sustainable trend. until that happens preserve the capital, only go long on special situations or swing trades.