Why do stocks fall down faster but move up slower?

Here is simple mathematical forumla -

1. Suppose you own a stock at Rs 100 and it goes down to Rs 50. So how much %age it has fallen? Yes, you are right..it is exactly 50% fall.

2. Now from Rs 50 to take it back to your original price of Rs 100, how much %age it needs?, Yes, you are right…it exactly needed 100% to reach to your original price of Rs 100.

This means to move a stock up it needs double the strength. That is the reason stocks fall quicker but move up much slower.

In another words,

1) if a stock falls 50% in 1 year than it will take 2 yrs to reach to original price. OR

2) it needs double the volume to move upto original price. This is where importance of volume comes into picture.

Hope this article was useful…

-Netstock

Market Corrections Vs. Bear Market

As you may have seen severe blood bath on Dalal Street today which we accurately predicted about 15 days back, you may wondering what is this, why market all of a sudden has fallen so badly?

This is a sign of Market Corrections. Which we are witnessing 3rd time Since March09. 

Market corrections usually happen during bull phase where in market all of sudden reaches too a new high where in fundamentals have little changed. At this juncture, all Medium/Long investors off load some of their profit from portfolio and try to pull down the market so that retail investors (like you and me) in panic sell their stocks at low value. These Medium/Long term investors then buy those stocks at low value so that they could build their long term portfolio more strongly. Usually 2-3 times in a year minor/major corrections happen during bull phase which also provide opportunity to buy at low level. Usually during Market Corrections, market stops falling at certain level (in most of the cases 10-20% of its recent peak).

Bear Market at the other hand is a situation where in there is no downside limitaion. Market can go down to any level. Stocks tumble and make new lows every day. They can go as low as 100-1000% from their recent highs in no time. Bear Market also gives opportunity to buy on extreme lows for long term investors. But this is little dangerous – you may think like if a stock is available at low price today and buy it only to find some days later that your stock is now available at much better price to buy.

We hope you have enjoyed this article and invest intelligently in market to make short/medium/long term profit.

-Netstock

Market this week

Market will remain highly volatile this week.

27th can see some short recovery rally however may slip by end of the day. Same will apply for 28th.

29th can be seen as slightly down market.

These are just indications for very short term and have no value from long term market trend. They are more useful for Intra-day traders which we don’t recommend.

-Netstock

We told that Market will fall (Corrections) 9 days before

Check here -

http://netstock.wordpress.com/2010/01/13/shortmedium-traders-are-advised-to-book-profit/

-Netstock

Short Term Recommendation – Jai Corp

Buy Jai Corp for short term (1week - 3 Months) target of 340+.

Keep strict stop loss at 240.

-Netstock

Result Analysis for HDIL and JP Associates

We have seen that Sales for both HDIL and JPA increased by very good numbers but Net profit fell.

How should investors react to it?

We see it as good sign that Sales are increasing. Net profit for a quarter can be less for many reasons (like clearing debt, payment of loans, staff etc).

We recommend that if you are owning these two stocks then hold them tight for long term. Both are excellent stocks and will fetch you very handsome return in long run.

Follow the basics – “Do not panic“

-Netstock

Sure Shot Multibagger – Suzlon Energy

We had recently (27th Nov) recommended Suzlon as long term buy when Suzlon was quoting at around 70.

http://netstock.wordpress.com/2009/11/27/suzlon-a-buy

Now after 1.5 months of our recommendation, we are at a view that Suzlon is not only a long term buy but is one the sure shot Multibagger.

The actual big move of Suzlon will not start until late 2010 and mid 2011. However, once that starts Suzlon will not stop and will end up giving you huge profit. Our recommendation is to accumulate Suzlon on every dip.

-Netstock

ABG Shipyard vs. Bharati Shipyard

Recently we had recommended both of above stocks. ABG as long term while Bharati as short term. Both are moving extremely handsomely and must have given very good return till date had you invested them on our advise.

Now big question in everyone’s mind is which one to chose and which one not to.

It is very difficult to say that which one is better. As far as fundamentals go both stocks are extremely sound. Our personal preference is ABG over Bharati from long term perspective because of its past performance and larger capacity.

At the same time you never know if Bharati can become bigger company than ABG as it has already acquired big stake in Great Offshore.

Our recommendation to all of you who want to invest on them to invest 50% in each stock for long term perspective. This way your risks will be managed very well and profit will be handsome too.

-Netstock

Short/Medium Term Stock recommendation – Bilcare

Bilcare is looking interesting on chart and may touch 700-1000 in short to medium term.

-Netstock

What is your expectation from Stock Market?