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Freshly Brewed - Market Perspectives from WeekendInvesting Research Desk

Two Key Principles of Success

As an investor, there are two crucial factors that greatly impact our success in the market – time horizon and drawdowns. These might seem like simple concepts, but it is important to truly understand and acknowledge their significance in order to achieve success in investing.

Let’s start by discussing the importance of time horizon in investing. A study by QCompounding on Twitter reveals some fascinating statistics based on the performance of the S&P 500 index. If you invested with a time horizon of one month, the probability of making money was still 62%. Even if you invest today and withdraw your investment after just one month, you are likely to make money 62% of the time.

Want to know why?

Support Resistance Dynamics

Support and resistance are key concepts in technical analysis that can provide valuable insights into market trends. In this article, we will explore a real-life example of support and resistance dynamics using the chart of Tata Investment.

The chart analysis begins with the observation that in 2020, Tata Investment reached a top level of around Rs900, just before the COVID crisis hit. The stock then experienced a significant decline, reaching a low of Rs500. However, it subsequently made a recovery and retested the earlier top, which now acted as a level of support.

This phenomenon is a classic example of how a resistance . . . .

WeekendInvesting Daily Byte

The market has been trading within a narrow range over the past few sessions, indicating consolidation. This consolidation phase is a positive sign as it suggests that the market is taking a breath and preparing for a potential breakout above the 19,850 mark. 

Looking at the chart, we can see the formation of a left shoulder and a head, indicating a potential bullish pattern. Should the market surpass the 18,850-18,860 level, it could trigger a ferocious phase, driving the index nearly 1000 points higher. This would push the market to 20,000 and potentially set a new all-time high in the coming weeks or a month.

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