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#Finnifty LevelsI’ve created a chart highlighting the key support and resistance levels for Finnifty, designed to help traders make informed decisions. These levels provide critical insights for understanding potential price movements, enabling traders to identify ideal entry and exit points. Use these levels to gain a clearer perspective on Finnifty’s trends and optimize your trades with greater confidence. Remember, these levels serve as guidance, so always combine them with your own analysis and risk management.
NSE:FINNIFTY1!Education
by Prabhu2020
1
Nasdaq-100 Index. The Psychological Aspects of Round NumbersIn the complex dance of commerce and finance, price tags play a key role in influencing consumer decisions. While it’s a fairly common psychological assumption that every penny and cent counts when it comes to getting the best deal, human psychology often deviates from this linear logic. In this educational post, we explore the irresistible appeal of round numbers, and how they often trump other considerations when making transaction decisions. The Irresistible Attraction to Round Numbers We do often believe that every penny counts in our transactions. However, research shows a striking deviation from this assumption. In scenarios where people choose a price, such as tipping at a restaurant or donating to beloved author or website, they disproportionately choose round numbers — like $ 5, $ 10 or $ 20 — far more than would be predicted by chance alone. One could argue that this is due to the rejection of change, a reluctance to waste time on small change, and the unwillingness to bother with complex mathematics. However, even in cases where the exact bill is not an issue (e.g., cashless card payments), the preference remains. For example, diners faced with a non-round bill (for example $ 34.67) are more likely to give non-round tips ($ 15.33), but only so that the total is a neat round number ($ 50). Why do we prefer round prices? And what is the psychology behind it? 1) Cognitive simplicity: The human mind is programmed to simplify and seek simplicity. Numbers like 10, 50, or 100 inherently feel “cleaner” and less chaotic than 17, 62, or 84. This desire for neatness gives us a sense of accomplishment. 2) Perception of quality: The marketing world has long capitalized on this preference for round numbers. Brands strategically associate round prices with premium quality. On the other hand, odd prices like “29.99” or “34.99,” while ubiquitous, subconsciously signal here's a discount or a bargain. 3) This preference is not limited to prices. People exhibit this tendency to round in other aspects of life as well. Our repeated exposure to round numbers is common in a variety of contexts, both in everyday life and during financial transactions, which contributes to an unconscious bias toward them. This cognitive ease with round numbers further perpetuates the preference. The stock market’s behavior and its fluctuations around these significant, round numbers is not a coincidence in general; there is a psychological explanation. Market Psychology of Round Numbers When the market reaches round numbers such as 500 or 1,000, 2,500 or 5,000, 10,000 or 20,000, it attracts the attention of both active traders and casual investors who may not even be actively following the market. As in everyday life, people often use round numbers as thresholds for making investment decisions. For example, some may decide to enter the market if a major index such as the Nasdaq-100 has exceeded 10,000, or they may decide to sell some of their stocks if the Nasdaq-100 has reached 20,000. These round numbers act as magnets for sellers as they mark important milestones given the relatively high rarity of a round number. If the market has the potential to move higher, it first needs to absorb the selling pressure around the round numbers and establish equilibrium before continuing its move higher. If we analyze the market behavior over the last decades, we will see clear patterns at round numbers. Let us take a closer look at a few examples. 1) Indian Stock Index, Sensex BSE:SENSEX Sensex, one of the major market indices in India, has its share of round number syndrome. For example, when Sensex reached 10,000 points in Q1 2006, it experienced significant market activity, with the index fluctuating by as much as 30 percent in Q2. The same phenomenon occurred at multiples of 10,000. Thus, at 20,000 points, which the Indian market reached at the end of 2007, the index collapsed by more than 60 percent over the next 4 quarters of 2008. Later the 20,000 mark has been reached again in the second half of 2010, and the index again suffered a decline of more than 20 percent during 2011. Later Indian stock market index reached the 30,000 mark in the first quarter of 2015, and its led to a price decline of more than 20 percent in the next 4 quarters, while 40,000 mark in the fourth quarter of 2019 - led to the market decline by 30 percent on the wave of COVID-19 sales. 2) Gold market OANDA:XAUUSD As in the previous example, round numbers often become key points of congestion for Gold market, when the market tries to break even higher, but the forces of buyers and sellers may be unequal. For example, spot Gold reached the $ 1,000 mark for the first time in the Q1 2008, which, following the logic discussed above, led to sales and 30 percent decrease. Gold spot buyers have tried a lot to reach $ 2,000 mark in 2011, but it brought the market down by 45 percent over the next 5 years. There were also a lot of unsuccessful attempts to jump above $ 2,000 in 2020-2022. Finally Gold spot surged above $ 2,000 only in Q4 2023, its led to further price increase, up to 2500 US dollars per ounce. 3) US stock index, Nasdaq-100 index NASDAQ:NDX The Nasdaq-100 index approached the 10,000 point mark for the first time in Q1 2020, which could have contributed to the sell-off. In fact, this is what happened, as the market then plunged by more than 30 percent in March 2020, and only thanks to monetary support measures and the reduction of US interest rates to almost zero, the index was able to break the 10,000 barrier by the end of Q2 2020. Reaching the 20,000 mark by the market index in Q2 2024, as we see, again leads to increased turbulence in US tech stocks and talk of imminent monetary easing by the Fed. Final Thoughts 1) It is important to note that round number syndrome and increased seismic activity near rounds number is a short-term phenomenon. Once the selling pressure is absorbed, the market resumes its movement based on other factors and develops independently of these already passed milestones. 2) Understanding the market behavior at round numbers can provide valuable information to investors. These round numbers act as psychological triggers for investors, driving their decision-making processes. 3) Understanding this phenomenon allows investors to make more informed choices and understand the short-term fluctuations that occur during these stages.
NASDAQ:NDXEducation
by Pandorra
Politechnical Analysis of BSE Sensex from 2004 to 2024Starting 2004 was a New Era of the Indian Political System wherein former RBI Chief and Finance Minister Mr. Manmohan Singh was elected as the Prime Minister of India. From there the Indian markets saw a quick growth and transformation, Sensex rocketed from 4800 levels to 21,000 level in a matter of 4 yrs. Then came the Sub Prime crisis in US which rattled the Global Market crashing stocks market by 60-70% globally. There on the Sensex took its time to re establish growth. The Congress Govt faced huge backlash from the country on their governance, integrity and top party leaders had to face corruption allegations against them. The markets retested the previous highs of 2008 levels of before Sub-Prime Crisis, but could never breakout. The confidence was in the market was subdued for 6 years and the market just couldn't breakout. March 2014, was the anticipation month of a new government, new hope, and the markets took that confidence to breakout from the 2008 Pre Subprime crisis highs. April 2014 the election fever was at high, the market were turning volatile and at the same time an indecisiveness could be felt. Then came the result month May 2014, BJP won and the markets shot itself up. There were a little blips in between due to Global Economic factors in 2016. But the next two years, saw an acceleration. The Midcaps and Small Caps were outperforming like never before. The amazing earnings of companies kept the markets soaring high. TRADE WAR, COVID 19 and "Aatma Nirbhar" Jan 2018, Trump had declared a Trade War on China, the trigger for Indian markets to fall was the Feb 2018 budget. From hereon the growth was subdued, Even though in 2 year the Sensex made a high of 42,000, the growth was only 4-5% over the 2 yrs. The markets kept looking quite weak as the earnings started taking a hit in most of the sectors. The valuations were still soaring and now the markets was expecting something new and big from the Modi lead BJP Govt. Even though the Finance Minister brought some corporate tax reform, which enable the markets to touch 42,000 mark. Just as the government was to bring the $5trillion Indian dream to reality, the world is hit by a deadly Coronavirus (COVID-19). This changes everything. Never ever anyone could imagine that life would come to a standstill. It crashed the markets horribly. The Prime Minister now takes this decision and brings about a new term that will/may change the future of India. The Aatma Nirbhar Bharat (Self Reliant India). Right now what the markets are actually doing is "Retesting the Governance of Modi BJP 2014". When I say retesting the governance, technically, the Markets may retest the entire rally from March 2014 breakout which also is a 61.8% fibonaaci retracement level from the lows of Sub Prime crisis to the highs of 2020. If the market is confident of the Modi Govts dream project of "Aatma Nirbhar Bharat" (Self Reliant India), We could see a mirror image (backwards) of 2004 to 2014 and an astonishing swing from 21,121 to 93,000 by May 2024. This rally would be called as "Aatma Nirbhar Rally".
INDEX:SENSEXEducation
by AkshatGupta