Technical analysis helps know direction of share market

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Nashik, Nov 7 (UNI) In times when the depressed investors are anxious to know when they will recover the losses that they had accrued on the stock exchanges in the past few months, help is at hand for them to take lessons from technical analysis.

Addressing a seminar on ''Will stock market index go back to 20,000 level?'' organised here today, Precision Technicals director and senior investment advisor Kiran Jadhav said ''Investors across markets are anxious to know when the share price index will go back to its level of 20,000 (attained in January) and their investments will recover all the value lost in the financial market turmoil.'' ''Technical analysis, however, do not support any such hopes of index resuming the 20,000-mark but the investors can still make up some of the losses using the power of technical analysis tools,'' he said.

Mr Jadhav said the recent rise of the Sensex is a ''pull back'' rally and offers an interesting opportunities for the investors to exit their holdings and shift to other opportunities.

Commenting on the current recessionary situation in the stock market, he said the Sensex had fallen more than 50 per cent in the last ten months and had shown lower tops and lower bottoms during the slide. Historically, price correction takes place when the recession is coming to an end. This correction then halts and gives way to time correction and then the markets zoom back, he pointed out.

Slowdown was witnessed for two years in the stock market after the high tide of 1992. In 1996 too, the slowdown lasted two years and in 2000 two and half years of bearish trend prevailed. Against this, the present bear phase is only ten months and the investors can increase their holdings at the sight of a trend reversal pattern, he advised.

Precision Technicals offers investors long-term advice on investments and also alerts them about the risks involved, Mr Jadhav said.

He said his firm had predicted bull phase in 2003 when the Sensex was at 3,000 and again in 2005, when it was at 7,000 and the company's prediction was that it would touch 15,000.

''We had stated in April last year that the Sensex would cross 20,000,'' he said, adding, the company had warned in February this year that the investors should not put any money in the market and should sell off their holdings to book profits. Accurate technical analysis made this prediction possible, he stressed.

Mr Jadhav said he had told thousands of investors gathered here in July to exit their investments in shares whether they make loss or profit. This would mean that the short-term capital loss is available for set off against short-term profit made over the next eight years and investor gets peace of mind and does not have to worry about what will happen to his investment.

Precision Technicals will hold free one-hour session on stock market technical analysis in the city's Hotel Panchavati Yatri on November 10 and 11 for the investors, he added.


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