Technical Analysis A Sure Recipe For Disaster in NSE BSE Antitechnical analysis

Technical Analysis A Sure Recipe For Disaster in NSE BSE
have you Spent more than 1 year in indian stock Markets then there are strong chances that you know the basis terminology of technical analysis as it is distributed freely on TV Channels ,newspapers and internet site including this site .

First About Us
When we do not believe in it why we are giving info on technical analysis regularly.
Reason :because this is the info which all ask from us

All Technical Analysis is Bad ?
We are not against all technical analysis ,we also rely on moving averages but not 20 or 50 or 100 or 200 days moving averages which everybody is watching

But why are we Against Technical Analysis :
because Technical analysis shows where are stop losses for everybody.Consider that you are a Institutional Investor and want to trigger stop losses for this share given in Chart below

Suppose you are a big investor who want to trigger stop losses before continuing upward journey again .

You will look for levels which are considered support

For ACC Moving average 100 days is Rs 750 while the last traded price as shown in this graph is Rs 793.85

ACC  Rebounded From 730-750 region Twice So it is considered Big Support as Stock took support twice from these levels

Also 100 Days moving average is at 750

So nearly all of the technical analysts will conclude that if stock breaks Rs 730 then it means Stock is Bearish

What is the meaning of This :

View of the crowd will be that 730 is big Support.

So most of the Stop losses will be Placed just below That

And what is The next level Where stop losses will be Placed?

Ans: below 700 as its a round number

So what happened next?

Check the Chart yourself

On 3rd November 2009  Stock Made intraday low of Rs 680   and closed at Rs 699.2

After hitting stop losses the stock started rising again and eventually made high Above Rs 1000.

Still you consider Technical analysis good ?

Take Some More examples

Adhunik had big resistance in Range of Rs 120-Rs 125

So technical analysis showed that if Adhunik managed to Break and Stay above Rs 125 For Some Sessions its a Buy.

But What Happened ?

Adhunik Broke Rs 125  Stayed above this level for Some Days thus Triggering Buys from Technical analysts then it started falling.

great Support Was Available in Range Of Rs 110 Which was previous Bottom .So the First Level of Stop Losses were below Rs110 then Below Rs 100 were the other stop losses.Rs 100 was also very important as it was a Round Figure also.

Adhunik Broke Rs 100 level in next forthnight.

So what happened?

Technical analysis guided us to buy above Rs 125 and then forced us to sell below Rs 100.

See the chart

Moral of Story: Do Anti Technical Analysis and if you can not do yourself feel free to  ask from us.We will help you