I read your column regularly on Monday. I want to know about technical word "CONSOLIDATION” what is means? And how many parts in teji to mandi and mandi to teji please reply in commodity world.
Hello Mr. Jain,
In technical language "CONSOLIDATION” simply means Resting period; a break in the current trend or interval in the current trend. The Trend pauses for consolidation and post consolidation it resumes its original trend. The consolidation is in opposite direction of the main trend.
According to Dow Theory, the market cycle can be summarized in two phases viz. the Bull phase (Teji) and the Bear phase (Mandi).
Bull Phase: There are three stages in Bull phase.
Stage I: This is the Preliminary Stage where Long term investors find good stocks which are undervalued, to invest.
Stage II: Results of the companies show good growth, economy shows an upswing, awareness among investors increases, realization of bull market sets in amongst people.
Stage III: This is the Euphoria stage in which anybody and every body starts making money. Many feel that they are left out of the market. In this stage all stocks including even those which are not fundamentally good rise and reach mind blowing valuations.
Bear Phase: There are three stages in Bear phase.
Stage I: Foresighted investors book profits and sell their stocks, when they feel companies will not be able to sustain its earnings at such high levels.
Stage II: Results of the companies show declining profits, and the economic growth starts showing decline. Bear market becomes a reality.
Stage III: Investors and Traders panic and sell their stocks & portfolio at any price out of sheer Fear. Valuations keep on getting attractive but prices keep on falling down.
Hi Jatin,Please give details for upcoming "technical analysis" training programI am looking forward to joining your training programPlease reply ASAP.
My next Technical Analysis Batch will be starting in the 3rd week of December 2008. This is the tentative date and for confirmation keep a watch in this paper Informed investor, where we will announce the exact commencement of the course. Or else you can call me and register yourself.