Serious traders place stops the moment they enter a trade. As time passes, stops need to be adjusted to reduce the amount of money at risk and to protect a bigger chunk of profits. Stops should be moved only one way - in the direction of the trade. We all like to hope that a trade will succeed and a stop is a piece of reality that prevents traders from hanging on to empty hope.

You may be a smart trader or an investor, but it is very important to preach the most important rule - Cutting all your losses short. We are currently at a very crucial juncture in the market and there are many traders who may be holding on to their long positions in the current strong intermediate downtrend. If the Sensex is unable to bottom out before the 3803 level, we are likely to see lower levels as the major trend of the Sensex and the market will be down.

Whether you are a new or an experienced investor, the hardest lesson to learn is that you are simply not going to be right all the time. And if you do not cut every loss quickly, sooner or later you will suffer some very large losses. The problem is, you always hope to make money when you buy a stock. And when you have to sell and take a loss, you find it gut wrenching and hard to admit that you are wrong. You would rather wait and hope the price will come back.

Today I will take a look at a few PSU stocks and see how they are faring technically. These stocks have been picked up from the forward section as traders will be in a good position to trade these stocks on both the long and the short side.

Bhel
Bhel is in a major uptrend as the stock has been exhibiting ascending intermediate tops and bottoms. However, the intermediate trend of the stock is down and it is in a corrective mode. The stock is pulling back towards its 30 weekly moving average (WMA) where it is likely to take a support in the current intermediate downtrend. The weekly momentum indicator has exhibited a double top and is in a sell mode indicating that the stock is likely to be in a correction for some time. Thus, though investors may hold on to the long positions in the stock, more long positions in it must be avoided for some time till the weakly momentum indicators start exhibiting strength.

Bharat Petroleum
Bharat Petroleum is also in a strong bull run like many of the PSU's. The stock was the first to bottom out among the refinery stocks and has moved very close to its earlier major top. The weekly momentum indicators is in the over bought stage and a correction for the next few weeks in the stock is likely. This is likely to be an intermediate term correction. The relative strength line is bullish and is well above its trigger line.

Investors must hold on to their long positions that they have picked up and must wait for the weekly stock to pull back towards the 30 WMA to add to the long positions.

Hindustan Petroleum
Like majority of the PSU stocks, the relative strength line for the stock is quite bullish as they have been outperforming the indices since the past few months and are in a major uptrend. The overbought conditions exhibited by the weekly momentum indicators suggest that the current intermediate downtrend will last for a while and will result in the stock pulling back towards their respective 30 WMA where they will take a support. However, as the major trend of the stock is up, investors must hold on to the long position. More long positions can be added in the next intermediate rise.

Indian Oil
Indian Oil continues to exhibit ascending intermediate tops and bottoms and hence it is in a major uptrend. The stock is trading well above the rising 30 WMA and like the other PSU stocks, it is also in an intermediate downtrend. The intermediate downtrend will result in the stock pulling back towards its 30 WMA and after it takes a support at this long term moving average and starts moving up, investors can look out for adding to the long positions. Hold on to the long positions that the investors have picked up a few months back.

IPCL
IPCL has dropped into an intermediate downtrend within the major uptrend. The stock has been correcting itself and like the other stocks, it will pull back towards its 30 WMA. Of all the stocks discussed today, IPCL is the weakest stock technically and will be the first to go into a major downtrend. However, till the stock stays above its earlier intermediate bottom and its 30 WMA. Investors must stay invested and there is no reason to turn bearish on the stock. But they must remember that as this stock is technically weaker than the other PSU stocks, it will be the first one to drop into a major downtrend. Currently, the relative strength line is also above its trigger line indicating that the stock is outperforming the indices.