EFFECTIVENESS OF 50 % LEVEL

A write up titled "IMPORTANCE OF 50% LEVEL" is now in public domain for over a month. Though many readers have downloaded it and some may have studied the idea, not one has found it worth their time to acknowledge the effectiveness or otherwise of this 'Simple Trading Idea'. Hence I believe the onus of doing the same falls upon me.

While I have no doubts about its effectiveness over the different time frames, I though it fit to publish some statistics with a profound hope that those who are still finding merit in believing in Tips and here say will gain faith in this idea and benefit from the same. The timing of this write up gains significance as we are on the threshold of seeing Nifty Future trade below 5950.

As can be observed from the TP Grid for Nifty Future that is updated every day, the median for 52 Week Hi/Lo and Annual 2010 is same. In most of the Nifty Fifty stocks too, the same is the case simply because new highs have taken place during the current calendar year.

As tomorrow is a market holiday, I did research Nifty Fifty items and find that out of 50 items 19 (including Reliance) are below the 50 % level, whereas 8 more are within 5% of the median level referred above. This takes the total to 27. If Nifty Future starts trading below 5950, I am sure this number will increase in the coming days and that itself will push Nifty Future and Bank Nifty Future downward to their mid point levels.

I hope the above statistics motivates some readers to spend time tomorrow, to work out the mid point levels in the items of their interest. Their efforts will not go wasted, as this point will also provide a good trading guide - whichever way the market moves. For those of the readers, who do not have arrangement for EOD data, I would suggest that this information (of 52 Week Hi/Lo) should be easily available on BSE/NSE website and hence should not be a difficult exercise.

Hope to receive feedback from those who are implementing this idea and also offer to explain this idea to small groups in a presentation that lasts about 2 hours - at a mutually convenient time.

Trust this helps.

Ketan Asher.