How to identify a stock market bottom

1 Bad news has no effect
When a market bottoms the release of more bad news it usually doesn't affect the market anymore. In such a case, the market reaches a state where no more bad news can bring it down.

2 Most stocks are undervalued
When the majority of stocks sell below their true value then there is a big possibility that the market has bottomed or that it's about to bottom. See also why stock prices don't reflect business value.

3 Most bad news have been reflected in the market
When serious bad news happens the market will go down. When all the bad news has been reflected in the new stock prices the market is likely to go up again after some time.

4 Low volatility
Markets usually get very volatile before they bottom out. When a market bottoms the volatility becomes much lower, as the market stabilizes after most sellers exit. See also why do people lose money in stocks.

5 Very negative expectations
Usually, when a market bottoms very negative expectations are released, sometimes by very large institutes that say that the market will go much lower than it already has. See also the psychological factors affecting the stock market.

6 Big difference between value and price
When a big difference between the share price and a company's value appears it might mean that the market is very near the bottom. When this happens to multiple companies, opportunity hunters will show up and raise stock prices sooner or later.

7 When prices are at historical lows
Usually, during market bottoms stock prices reach historical lows. If stocks are selling at prices they were selling at years before, then the market bottom might be very near.

8 When the majority recommends selling
When the majority of people recommend selling stocks then the bottom might be very near. In such a case, most of those who wanted to sell with losses could have already left the market leaving a strong buying power behind.

9 When everybody complains about serious losses
When so many people start to complain about the serious losses they have made it could be a good time to start watching the market and waiting for the near bottom.

10 When no more bad news is expected
Sometimes, the market goes down because of serious bad news such as slowing down of the global economy. If all bad news about the slowdown has been released then only good news will start to show up and as a result the market will go up.

11 Technical indicators indicate overselling
When most technical indicators indicate that the market is oversold then it might be a good idea to look for other factors to find out whether the market is about to bottom. See signs the stock market is about to crash.

http://www.speeli.com/articles/view/How-to-identify-a-stock-market-bottom

nihal123 wrote:
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5 Very negative expectations
Usually, when a market bottoms very negative expectations are released, sometimes by very large institutes that say that the market will go much lower than it already has. See also the psychological factors affecting the stock market.
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8 When the majority recommends selling
When the majority of people recommend selling stocks then the bottom might be very near. In such a case, most of those who wanted to sell with losses could have already left the market leaving a strong buying power behind.

9 When everybody complains about serious losses
When so many people start to complain about the serious losses they have made it could be a good time to start watching the market and waiting for the near bottom.
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There you are.

Wait for all shoeshine boys to start recommend selling.

I normally identify a share market bottom or zenith after one or two years later... till then I find it difficult to say...

However I am not worried much as I can buy more when market comes down... VPEL, Namun are on my radar now...I buy when a share is attractive to me but not for anyone else...

I sell very rarely , and mostly when I need money..


Anyway by now I am not falling to any category like trader, holder, never to sell etc... Further I move easily among Equity, savings, fds, gold, and unit trusts..

I was never on Margin, hence never in a hurry to predict zenith or nadir...

YK your selling on lioc was a right decision it seems. How about now re-entering lioc?

YK with your financial strength, you can easily buy 1 million lioc shares under 34 and sell those above 38. Simple plan. Above 4 million profit..

CK wrote:YK with your financial strength, you can easily buy 1 million lioc shares under 34 and sell those above 38. Simple plan. Above 4 million profit..

Yes, if it goes to 31; only 4 million loss.

Yin-Yang wrote:

CK wrote:YK with your financial strength, you can easily buy 1 million lioc shares under 34 and sell those above 38. Simple plan. Above 4 million profit..

Yes, if it goes to 31; only 4 million loss.

That's very negative thinking... YK can avg down or wait till it come to 38. Because he is not in margin. Just see the PE of lioc. This is a sure shot...

Sure shots are the most unlikely ones.

If PE is so good why hasn't it already gone up?

[I would buy at 31/-]

Yin-Yang wrote:Sure shots are the most unlikely ones.

If PE is so good why hasn't it already gone up?

[I would buy at 31/-]

Buy below 34 as much as you can with your cash. (not margin). when your finish collecting your quantity , just wait. sleep well...
(collecting at 31 would be an epic collection and one of the greatest. This come to 30 level when they made losses)

This is the second 'epic' mate.
RICH coming to 7.7 was such few weeks ago.

|||Buy below 34 as much as you can with your cash. (not margin). when your finish collecting your quantity , just wait. sleep well..|||


Very bad ideas.

Investors sleep well only when they have all cash in the bank.

[Hrrmmm; at least half of it]

Yin-Yang wrote:This is the second 'epic' mate.
RICH coming to 7.7 was  such few weeks ago.

|||Buy below 34 as much as you can with your cash. (not margin). when your finish collecting your quantity , just wait. sleep well..|||


Very bad ideas.

Investors sleep well only when they have all cash in the bank.

[Hrrmmm; at least half of it]

Yin-Yang wrote:This is the second 'epic' mate.
RICH coming to 7.7 was  such few weeks ago.

|||Buy below 34 as much as you can with your cash. (not margin). when your finish collecting your quantity , just wait. sleep well..|||


Very bad ideas.

Investors sleep well only when they have all cash in the bank.

[Hrrmmm; at least half of it]

Thanks... I am sleeping......zzzzzz......don't  disturb..

me too sleeping well. (with eyes half open)

YY mentioned RICH to 7.70 when it was trading 8.40 as i guess. it was a great call at that time.

as such do you have any hunch about following shares..

1. APLA
2. REG
3. LIOC (ok, its 31)
4. HAYL
5. SAMP
6. GRAN
7. BFL
8. CDB

because its hard to resist the temptation to buy now. water is very much unsettling and market is still weighting budget impact, political changes and macro-economic picture of the country. (i sincerely reject YY big players theory in long run, but in short run- it can be true)

cheer!

BFL was mentioned earlier; buy at 175 sell at 225
SAMP would buy 245~250

APLA, REG, GRAN, CDB; would buy when SS boys start panic selling and if dropped 10% within a day.
And sell with 10% profit next day, when the same boys start panic buying.

And again buy if 5% is dropped in a day.

But for all that; need to wait for my FD to mature; few more days.

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Who analyses and make 'long term' decisions based on
|weighting budget impact, political changes and macro-economic picture of the country| ?

Big payers or small retailers ?

Yin-Yang wrote:

But for all that; need to wait for my FD to mature; few more days.

Hope that time lioc on 31. Should be a great buy pal.

CK wrote:

Yin-Yang wrote:

But for all that; need to wait for my FD to mature; few more days.

Hope that time lioc on 31. Should be a great buy pal.

BFL would be a better option for some quick bucks if the wind direction start a sudden change.

LIOC can always wait; Some people can get some smart ideas of taxing fuel to reduce the air pollution these days.

Not easy to get a good qty in bfl. But can give you quick returns..

At certain times;

There are certain shares good for buying at bottoms.
There are certain shares good for riding on trends.
There are certain shares not good for buying at bottoms.
There are certain shares not good for riding on trends.

CK wrote:

Yin-Yang wrote:

CK wrote:YK with your financial strength, you can easily buy 1 million lioc shares under 34 and sell those above 38. Simple plan. Above 4 million profit..

Yes, if it goes to 31; only 4 million loss.

That's very negative thinking... YK can avg down or wait till it come to 38. Because he is not in margin. Just see the PE of lioc. This is a sure shot...

only thing to consider is next quarter could be a loss. last 2 quarters profit was on usd 30  dollar oil. but still attractively priced.

Will the same principle for stock market applies to individual stocks as well. Or will some shares set the trend for the whole market to follow.

Yin-Yang wrote:
[I would buy at 31/-]

Bravo YY

CK wrote:
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(collecting at 31 would be an epic collection +++

Not epic buddy, we better call it an OPEC collection.


So, anyone wants to jump in ?
Or wait for 25/- ?

I will have a lick at 30~31.

actually what the reason for this downfall? RSI now almost in oversold region? YY do you believe this will come to 25?

CK wrote:actually what the reason for this downfall? RSI now almost in oversold region? YY do you believe this will come to 25?

Must be some panic reaction to some oil related news.

Panic button has activated, this is the time to jump in; yes 25 and below is always possible with panicked SS Boys.

The Invisible wrote:Will the same principle for stock market applies to individual stocks as well. Or will some shares set the trend for the whole market to follow.

Will the same principle for population applies to individual persons as well. Or will some persons set the trend for the whole population to follow.
??