Bubble, a confusion here....if one gets long in scrips hitting 52 week-highs are we not assuming that the end is infinite.... ultimately all stocks come down and come down us relatively a milder way of saying what actually happens. This where a fundamental analyst scores the point.... thwy may not be able to catch the top but they manage to get out at least. I remeber analysts recommending sugar stocks as they were making new highs day after day.....they applied the same logic for construction stocks, infra stocks. I beleive by adopting this principle, one shows his belief that the good things last forever, but actually they dont. I understand its price which makes perception and not the other way round, but then actually thats the time when the old investors make the biggest money. And also, when price makes perception then its actually the time to make an exit. Also, one more reason why technical analysis must not be used by investors, except sporadically for refining entry points or looking at historical data, is that technical analysis doesnt help in locating multibaggers... the maximum they think of 161.8% projection of a given range....thats it. Bubble tell me, looking at the sensex chart of 2002-2003 would a technical analysis have thought of sensex @ current levels.

 

As far as Sugar stocks and 52 Week Highs are concerned....They started hitting 52 week highs from 2003. Balrampur started in Aug-2003. So anyone who purchased Balrampur at a new 52 week high with a 10% stop has made a bucket full of money between 2003 and 2006, without having to hold the "Baggage" now. Also post May-2006, the only guys who were bearish on Sugar were the TA. One can recall Atul Suri Interview on CNBC, when he was clearly bearish on sugar. I am NOT reffering to any other TA. The Noted FA is still Bullish on this sector, and now he may be right, after every investor has sold these stocks out. The chances of being stubborn are much higher using FA. The KEY to using a 52 week High strategy would be buy everytime the stock moves up to high, with a stop, which requires DISCIPLINE.

 

Same logic to Construction stocks also, as they also started to hit 52 week highs much before they finally topped. Rembember, the important point is when a sector first starts to hit new high, and not the last day of a new high.

 

Vivek...I for one have never ever calculated 161.80% as any target, I try to "Follow" the market and NOT try to outsmart it.

 

Vivek...If you recall, This Bull Market (since 2003) started Post Infosys Crash 40% in a day on 10-Apr-03. And the most bearish guys were Fundamental Analysts. I also recall, there was a disbelief form the FA community (from what I heard in Media) when the market started to move up post Infy Crash. I recall that Monsoons were below normal in 2003 and that was the primary worry of the FA section. I clearly recall couple of leading brokerages come out with a SELL recomm on M&M @ 100, on Monsoon concerns.

BasantJi, may recall and post here on what was the behaviour of the FA then.

 

A TA would not have predicted 14000, and Neither would have a FA predicted it, other than RJ (who is in a different league alltogether and he uses charts also).

 

 

I would also use one more example....There are scores of FA in US who called housing a "Bubble", since 2002, and most of them lost their shirt shorting housing stocks because the market actually topped in 2005, by when most were convinced that "Housing Bubble" would never ever burst as the US has Plunge Protection Team (PPT), who would stabilise the markets.

 

It is the market which makes us Fools or Smart., but nothing competes with DISCIPLINE!!! 

 

Uranium has been replied in Metals section.

 

There are "NO HOLY GRAILS".

 

Vipul...Nice one!!!

 

 

 

 

Infosys was over bought for about 24 months during the 2000 tech boom!!! I am not sure  if anyone could have held such a hot cup of tea