The rains have been arriving steadily to the other parts of the country. It has been quite a relief that the rains have come in even though they have been late. As and when the rains are hitting the parts of the country the prices are going for a wild ride. Let that be spices or oilseeds or any other commodity including gold and silver. And not to forget the equity markets and the rupee-dollar. The investors of commodity markets are already in a fix which side they have to be? The moment they are on the buying side the market reverses and the moment they sell the prices shoot up. Even though the fundamentals are in your favor it is not necessary that the prices too will be in your trading position’s favor. This week we will be experiencing a solar eclipse which will make a lot of impact on the prices of commodities as well.
Last week when I had put in the article about crude a lot of investors had misinterpreted what I had said. I had clearly mentioned that there is a possibility that crude prices may simply crash from the levels without giving a pullback. And if the prices come up a bit then they will come up to levels of $63-$64. Those levels would have been a good level to sell again. But with the calls I received from my readers I was completely surprised that they had actually bought crude oil contracts rather than waiting for a reversal to sell. This physcology of trading will make you end up making losses. If the price of certain commodity is on the downtrend then if the prices come up a bit that does not mean that you should be buying in the market because you may never know from which levels the prices will turn and you will be completely unaware when such a thing happens. Then how much ever you try you will end up making losses forget coming out of your position at cost.
The prices follow a certain trend and a discipline which if we honor then the prices will honor us and give us the desired profits. Taking position in haste will make your capital wiped off which makes you completely handicapped because you won’t be able to enter the markets again without capital. Make sure when you are trading initially make some decent profits that will cover your future loss making trades. Do not risk your capital on the trades instead risk your profits.
Gold right now is stuck between the fight of the bulls and the bears in the market. Which way it will end up you never know. It is when this fight happens in the market small investors suffer to great extents. If we look at the chart of gold on 8th July the prices had actually breached the bottom of $911 but the other day itself the prices reversed and the shorts in the market were beaten heavily. The price shot up and has created a bit of panic in the market. If the bulls can manage to pull the prices from here they can take the prices to any extent. The equity markets world over have bottomed out. Investors in the market have money now that they can divert their funds to buying gold now. The dollar index has bottomed out and it will shoot up any moment now. The dow jones has reversed and given a break out on the higher side. Now question is will this take the prices of gold sky high or rock bottom. Right now the magic figure in gold is $939 if the prices close above this price for one week then there is a possibility that the prices will go higher. But to be very honest I will not be on the buying side neither be on the selling. I will be simply watching the movement in gold like I watch a movie and when I am completely comfortable I will make my move in it. I will advice my readers the same if you are planning to take a position in gold on either side let that be a buy or a sell, intraday or positional you may end up on the wrong side. Keep yourself away from gold and silver for the time being. There is a reason why I have been keeping myself away on writing on any commodity extensively for sometime as I had mentioned earlier I am still waiting for the rains to complete their course which will give me a better idea to analyze the market. I do not wish to mislead my readers by simply writing false information on any commodity and make them trade for no reason and end up making losses.
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