LAST WEEK, GLOBAL FACTORS AFFECTED THE SENTIMENT IN INDIAN MARKETS AND THE FIIs & FUND MANAGERS' PARTICIPATION WAS THIN. FOLLOWING FACTORS AFFECTED THE MARKET:
1. BAN ON IRON ORE MINING IN KARNATAKA.
2. GOVERNMENTS' PROPOSAL TO INTRODUCE DUAL PRICING POLICY IN DIESEL.
3. WORRIES OF LIKELY SLOWDOWN IN CORPORATE EARNINGS GROWTH DUE TO HIGHER RATE OF INTEREST RATES.
4. POSSIBILITY OF DOUBLE-DIP RECESSION IN U.S.
5. WORSENING SOVEREIGN-DEBT IN EURO ZONE.
THESE FACTORS TRIGGERED THE SELLING IN THE MARKET AND IT REACTED VERY SHARPLY IN THE NEGATIVE ZONE, ADDING PANIC AMONG THE TRADERS AND INVESTORS AS WELL.
ON THE DOMESTIC FRONT:
INDIA'S EXPORT GREW 46.45% TO $29.21 BILLION AND IMPORTS GREW 42.4% TO $36.8 BILLION IN JUNE 2011.
INDIA'S MANUFACTURING GREW IN JULY 2011 AT THE LOWEST PACE IN 20 MONTHS.(Now the effect of interest rate hike could be seen),
INDIA'S FOOD INFLATION FOR THE WEEK ENDED JULY 23 2011, ACCELERATED TO 8.04% FROM 7.33% IN THE PREVIOUS WEEK.
INDIA'S MONSOON RAINFALLS WERE 22% BELOW NORMAL(LAST WEEK IT 23% BELOW NORMAL).
THE PRIME MINISTER'S ECONOMIC ADVISORY COUNCIL (PMEAC) HAS REVISED THE GDP FORECAST TO 8.2% FROM 9% FOR FY12. THIS DOWN TURN REVISION IN FORECAST IS DONE DUE TO INFLATIONARY PRESSURE AND SLOWDOWN IN INVESTMENT RATE. REPORT EXPECTS AGRICULTURE SECTOR TO GROW BY 3% IN CURRENT FISCAL FROM 6.6% IN 2010-11, THIS IS DUE TO BELOW NORMAL ESTIMATE OF MONSOON. REPORT ALSO FORECASTED INDUSTRY SECTOR TO GROW BY 7.1% WHICH IS LESS THAN 7.9% ACHIEVED IN 2010-11.
ON THE GLOBAL FRONT:
IN THE MAJOR DEVELOPMENT S&P FOR THE FIRST TIME IN ITS HISTORY HAS DOWNGRADED AND LOWERED ITS RATING ON U.S FROM AAA TO AA+. S&P CITED THE REASON FOR THE DOWNGRADE IS THE POLITICAL SYSTEM OF U.S HAS BECOME LESS STABLE AND THAT BUDGET CUTTING ANNOUNCED IS NOT ENOUGH. S&P HAS THREATENED ANOTHER REDUCTION IN TWO YEARS. S&P ACTION MAY HURT THE U.S ECONOMY OVER TIME BY INCREASING THE COST OF MORTGAGES,AUTO LOANS, AND OTHER TYPES OF LENDING TIED TO THE INTEREST RATE PAID TO THE TREASURIES. However fear of this event has already been priced-in partially, as China has already downgraded the U.S earlier. Hence downgrade is not any surprise as it was clear that the deficit reduction package did not meet the $4 trillion that S&P has hoped for. But any spike in Treasury yield and/or fall in $ should be relatively short lived. Once the dust settles, attention will turn back to the economy fundamentals, which are certainly consistent with low Treasury yields.
OUTLOOK OF INDIAN MARKETS:
INDIAN MARKET IS EXPECTED TO BE VOLATILE IN THE COMING WEEK, WITH POSITIVE BIAS, DUE TO UNCERTAIN DEVELOPMENTS IN THE GLOBAL MARKET. THE SHARP CORRECTION DURING THE LAST TWO WEEKS WAS PRIMARILY ON TWO REASONS:
1. THE UNEXPECTED 50bps HIKE INTEREST RATES BY RBI, &
2. SHARP CORRECTION(NOT CRASH) IN U.S & EUROPEAN MARKETS. Which led to decline in most other markets, including India. U.S markets corrected on anticipation on its sovereign ratings and unexpected poor economic show. The outlook on the long term rating is negative. At the same time S&P has affirmed its A-1+ short term rating on the U.S. THIS MAY EVENTUALLY SEE CRUDE OIL & OTHER COMMODITY PRICES CORRECTION, LEADING TO MODERATION IN INFLATION AND SUBSEQUENTLY INTEREST RATES IN INDIA, BRINGING BACK ECONOMIC GROWTH IN THE COUNTRY SOONER THAN EXPECTED. WITH THE REFORM PROCESS HAVING ALREADY BEEN PUT IN PLACE EXPERTS BELIEVE THAT THIS IS A GOOD BUYING OPPORTUNITY CONSIDERING THAT NIFTY IS TRADING 14 TIMES FY12 & 11.8 TIMES FY13 EARNINGS WHICH IS INEXPENSIVE. U.S FED IS HAVING MEETING ON TUESDAY, THE OUTCOME OF WHICH COULD AFFECT THE SENTIMENTS IN THE SHORT TERM. NIFTY IS LIKELY TO BE VOLATILE IN THE RANGE OF 5000-5350-5400-5450.
HENCE THERE IS NO NEED OF WORRY THAT S&P DOWNGRADE OF U.S WILL MAKE EVERY MARKET COLLAPSE. IN THE SHORT TERM MARKETS, BOTH INDIAN & GLOBAL, MAY DRIFT LOWER(MAY BE BELOW 5000 ALSO), ON BACK OF CORRECTION, HOWEVER THERE WILL BE STABILITY THERE AFTER. THERE MAY NOT BE SHARP CUT/FALL ON MONDAY CREATING PANIC, IF IT IS SHOULD BE USED IN BUYING.
WHAT YOU MUST DO NOW?
JUST HOLD YOUR LONG, LEVERAGED POSITION? OR EXIT?
OR
SHORT THE MARKET, AS EVERY ONE IS TALKING ABOUT 4800-4400 OR EVEN 4000!!!!
OR
START BUYING AT 5000-5200?
ANSWER DEPENDS ON HOW YOU ARE PARTICIPATING IN THE MARKET.
1. IF YOU ARE TRADER OR SPECULATOR:IN THE COMING SESSIONS 5200 LEVEL IS TREND DECIDING LEVEL.IF NIFTY DOESN'T TRADE ABOVE 5200 THEN IT WILL TEST 5100-5050-5000 & 4950[ BUY PE5200 & PE5100 TO BOOK PROFIT WHEN NIFTY REACHES THE ABOVE LEVELS]
IF NIFTY SUSTAINS ABOVE 5200 THEN IT MAY RALLY TO 5300-5350-5400-5450.[ BUY CE5200 & CE5300 TO BOOK PROFIT WHEN NIFTY REACHES THE ABOVE LEVELS].
2. IF YOU ARE INVESTOR AND TRADER BOTH BUT NOT SPECULATOR:
THEN BUY SUGGESTED STOCKS IN STAGGERED MANNER OR IN 2-3 PARTS (from the list below) & [BUY NIFTY OPTIONS CE5100, CE5200, WHEN EVER THERE IS DEEP CUT/GAP DOWN OPEN. KEEP 4950 AS STOP-LOSS TO CALL OPTIONS].
3. IF YOU ARE ONLY INVESTOR AND YOU OCCASIONALLY CHURN PORTFOLIO 2-3 TIMES A YEAR:
THEN START BUYING THE QUALITY STOCKS OF YOUR OWN CHOICE OR from the list below. ALL THE GLOBAL & DOMESTIC FACTORS ARE SHORT TERM ABERRATION AND AS SOON AS INFLATION EASES, INTEREST RATE PEAKS OUT INDIAN MARKETS WILL RALLY. RALLY TO MAKE NEW HIGHS, HENCE EVERY DIP IN THE SHORT TERM IS A VERY GOOD OPPORTUNITY FOR THOSE WHO WISH TO BUY FOR 12-18 MONTHS HOLDING. IN THE SHORT TERM NIFTY MAY DIP BELOW 5000 ALSO, BUT NO ONE KNOWS WHEN THE MARKETS TURN BACK AND YOU MAY LOOSE THIS GOOD OPPORTUNITY. HENCE DON'T PANIC OR WORRY, JUST KEEP ON ADDING "STOCKS OF YOUR CHOICE" IN YOU PORTFOLIO & DON'T EXPECT ANY DEEP FALL TO 4400 OR 4000 IN SHORT RUN. TO MEE IT SEEMS MARKETS MAY NOT GO BELOW 4950!!!!!!!!!!!!
LIST OF SHARES YOU SHOULD BUY/ACCUMULATE IN A PHASED MANNER:
1.HDFC BANK,
2.HDFC LTD,
3.LIC HOUSING FINANCE,
4.IDBI BANK,
5.DCB,
6.CADILA HEALTH CARE,
7.LUPIN,
8.RALLIES INDIA,
9.TCS,
10. NIIT,
11. BHARTI AIRTEL,
12. HERO HONDA,
13.L&T,
14. I.T.C.,
15. STER TECH,
16. PIRAMAL GLASS,
17. ORCHID PHARMA,
18. SKUMAR NATION
19. GITANJALI GEMS
20. PATNI
SHORT TERM TRADING CALLS:
1.VOLTAS(131): BUY/ACCUMULATE BETWEEN 128-132 FOR THE TARGET OF 145-155++ KEEPING STOP-LOSS OF 118(IN 2-3 WEEKS)
2.PETRONET LNG(174): BUY THIS STOCK ON EVERY FALL FOR THE TARGET OF 180-190++ KEEP STOP-LOSS BELOW 166.50
3.EXIDE(153): BUY THIS STOCK KEEPING STOP-LOSS OF 151 FOR THE TARGET OF 158+++
4. BHARTI AIRTEL FUT: BUY AROUND 408-400 KEEPING STOP-LOSS OF 393 FOR THE TARGET OF 420-430-440+++
5.SAIL FUT: BUY AROUND 111-114 KEEPING STOP-LOSS BELOW 109.50 FOR THE TARGET OF 118-124+++
ASTROLOGICALLY: The planetary position shows weakness to persist for August & September. However in this week, Tuesday, 9th August and Thursday, 11th August shall see weakness, however wednesday 10th shall see positive move. There are 30% chance that I may go wrong.This week may provide good buying opportunity.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
1. BAN ON IRON ORE MINING IN KARNATAKA.
2. GOVERNMENTS' PROPOSAL TO INTRODUCE DUAL PRICING POLICY IN DIESEL.
3. WORRIES OF LIKELY SLOWDOWN IN CORPORATE EARNINGS GROWTH DUE TO HIGHER RATE OF INTEREST RATES.
4. POSSIBILITY OF DOUBLE-DIP RECESSION IN U.S.
5. WORSENING SOVEREIGN-DEBT IN EURO ZONE.
THESE FACTORS TRIGGERED THE SELLING IN THE MARKET AND IT REACTED VERY SHARPLY IN THE NEGATIVE ZONE, ADDING PANIC AMONG THE TRADERS AND INVESTORS AS WELL.
ON THE DOMESTIC FRONT:
INDIA'S EXPORT GREW 46.45% TO $29.21 BILLION AND IMPORTS GREW 42.4% TO $36.8 BILLION IN JUNE 2011.
INDIA'S MANUFACTURING GREW IN JULY 2011 AT THE LOWEST PACE IN 20 MONTHS.(Now the effect of interest rate hike could be seen),
INDIA'S FOOD INFLATION FOR THE WEEK ENDED JULY 23 2011, ACCELERATED TO 8.04% FROM 7.33% IN THE PREVIOUS WEEK.
INDIA'S MONSOON RAINFALLS WERE 22% BELOW NORMAL(LAST WEEK IT 23% BELOW NORMAL).
THE PRIME MINISTER'S ECONOMIC ADVISORY COUNCIL (PMEAC) HAS REVISED THE GDP FORECAST TO 8.2% FROM 9% FOR FY12. THIS DOWN TURN REVISION IN FORECAST IS DONE DUE TO INFLATIONARY PRESSURE AND SLOWDOWN IN INVESTMENT RATE. REPORT EXPECTS AGRICULTURE SECTOR TO GROW BY 3% IN CURRENT FISCAL FROM 6.6% IN 2010-11, THIS IS DUE TO BELOW NORMAL ESTIMATE OF MONSOON. REPORT ALSO FORECASTED INDUSTRY SECTOR TO GROW BY 7.1% WHICH IS LESS THAN 7.9% ACHIEVED IN 2010-11.
ON THE GLOBAL FRONT:
IN THE MAJOR DEVELOPMENT S&P FOR THE FIRST TIME IN ITS HISTORY HAS DOWNGRADED AND LOWERED ITS RATING ON U.S FROM AAA TO AA+. S&P CITED THE REASON FOR THE DOWNGRADE IS THE POLITICAL SYSTEM OF U.S HAS BECOME LESS STABLE AND THAT BUDGET CUTTING ANNOUNCED IS NOT ENOUGH. S&P HAS THREATENED ANOTHER REDUCTION IN TWO YEARS. S&P ACTION MAY HURT THE U.S ECONOMY OVER TIME BY INCREASING THE COST OF MORTGAGES,AUTO LOANS, AND OTHER TYPES OF LENDING TIED TO THE INTEREST RATE PAID TO THE TREASURIES. However fear of this event has already been priced-in partially, as China has already downgraded the U.S earlier. Hence downgrade is not any surprise as it was clear that the deficit reduction package did not meet the $4 trillion that S&P has hoped for. But any spike in Treasury yield and/or fall in $ should be relatively short lived. Once the dust settles, attention will turn back to the economy fundamentals, which are certainly consistent with low Treasury yields.
OUTLOOK OF INDIAN MARKETS:
INDIAN MARKET IS EXPECTED TO BE VOLATILE IN THE COMING WEEK, WITH POSITIVE BIAS, DUE TO UNCERTAIN DEVELOPMENTS IN THE GLOBAL MARKET. THE SHARP CORRECTION DURING THE LAST TWO WEEKS WAS PRIMARILY ON TWO REASONS:
1. THE UNEXPECTED 50bps HIKE INTEREST RATES BY RBI, &
2. SHARP CORRECTION(NOT CRASH) IN U.S & EUROPEAN MARKETS. Which led to decline in most other markets, including India. U.S markets corrected on anticipation on its sovereign ratings and unexpected poor economic show. The outlook on the long term rating is negative. At the same time S&P has affirmed its A-1+ short term rating on the U.S. THIS MAY EVENTUALLY SEE CRUDE OIL & OTHER COMMODITY PRICES CORRECTION, LEADING TO MODERATION IN INFLATION AND SUBSEQUENTLY INTEREST RATES IN INDIA, BRINGING BACK ECONOMIC GROWTH IN THE COUNTRY SOONER THAN EXPECTED. WITH THE REFORM PROCESS HAVING ALREADY BEEN PUT IN PLACE EXPERTS BELIEVE THAT THIS IS A GOOD BUYING OPPORTUNITY CONSIDERING THAT NIFTY IS TRADING 14 TIMES FY12 & 11.8 TIMES FY13 EARNINGS WHICH IS INEXPENSIVE. U.S FED IS HAVING MEETING ON TUESDAY, THE OUTCOME OF WHICH COULD AFFECT THE SENTIMENTS IN THE SHORT TERM. NIFTY IS LIKELY TO BE VOLATILE IN THE RANGE OF 5000-5350-5400-5450.
HENCE THERE IS NO NEED OF WORRY THAT S&P DOWNGRADE OF U.S WILL MAKE EVERY MARKET COLLAPSE. IN THE SHORT TERM MARKETS, BOTH INDIAN & GLOBAL, MAY DRIFT LOWER(MAY BE BELOW 5000 ALSO), ON BACK OF CORRECTION, HOWEVER THERE WILL BE STABILITY THERE AFTER. THERE MAY NOT BE SHARP CUT/FALL ON MONDAY CREATING PANIC, IF IT IS SHOULD BE USED IN BUYING.
WHAT YOU MUST DO NOW?
JUST HOLD YOUR LONG, LEVERAGED POSITION? OR EXIT?
OR
SHORT THE MARKET, AS EVERY ONE IS TALKING ABOUT 4800-4400 OR EVEN 4000!!!!
OR
START BUYING AT 5000-5200?
ANSWER DEPENDS ON HOW YOU ARE PARTICIPATING IN THE MARKET.
1. IF YOU ARE TRADER OR SPECULATOR:IN THE COMING SESSIONS 5200 LEVEL IS TREND DECIDING LEVEL.IF NIFTY DOESN'T TRADE ABOVE 5200 THEN IT WILL TEST 5100-5050-5000 & 4950[ BUY PE5200 & PE5100 TO BOOK PROFIT WHEN NIFTY REACHES THE ABOVE LEVELS]
IF NIFTY SUSTAINS ABOVE 5200 THEN IT MAY RALLY TO 5300-5350-5400-5450.[ BUY CE5200 & CE5300 TO BOOK PROFIT WHEN NIFTY REACHES THE ABOVE LEVELS].
2. IF YOU ARE INVESTOR AND TRADER BOTH BUT NOT SPECULATOR:
THEN BUY SUGGESTED STOCKS IN STAGGERED MANNER OR IN 2-3 PARTS (from the list below) & [BUY NIFTY OPTIONS CE5100, CE5200, WHEN EVER THERE IS DEEP CUT/GAP DOWN OPEN. KEEP 4950 AS STOP-LOSS TO CALL OPTIONS].
3. IF YOU ARE ONLY INVESTOR AND YOU OCCASIONALLY CHURN PORTFOLIO 2-3 TIMES A YEAR:
THEN START BUYING THE QUALITY STOCKS OF YOUR OWN CHOICE OR from the list below. ALL THE GLOBAL & DOMESTIC FACTORS ARE SHORT TERM ABERRATION AND AS SOON AS INFLATION EASES, INTEREST RATE PEAKS OUT INDIAN MARKETS WILL RALLY. RALLY TO MAKE NEW HIGHS, HENCE EVERY DIP IN THE SHORT TERM IS A VERY GOOD OPPORTUNITY FOR THOSE WHO WISH TO BUY FOR 12-18 MONTHS HOLDING. IN THE SHORT TERM NIFTY MAY DIP BELOW 5000 ALSO, BUT NO ONE KNOWS WHEN THE MARKETS TURN BACK AND YOU MAY LOOSE THIS GOOD OPPORTUNITY. HENCE DON'T PANIC OR WORRY, JUST KEEP ON ADDING "STOCKS OF YOUR CHOICE" IN YOU PORTFOLIO & DON'T EXPECT ANY DEEP FALL TO 4400 OR 4000 IN SHORT RUN. TO MEE IT SEEMS MARKETS MAY NOT GO BELOW 4950!!!!!!!!!!!!
LIST OF SHARES YOU SHOULD BUY/ACCUMULATE IN A PHASED MANNER:
1.HDFC BANK,
2.HDFC LTD,
3.LIC HOUSING FINANCE,
4.IDBI BANK,
5.DCB,
6.CADILA HEALTH CARE,
7.LUPIN,
8.RALLIES INDIA,
9.TCS,
10. NIIT,
11. BHARTI AIRTEL,
12. HERO HONDA,
13.L&T,
14. I.T.C.,
15. STER TECH,
16. PIRAMAL GLASS,
17. ORCHID PHARMA,
18. SKUMAR NATION
19. GITANJALI GEMS
20. PATNI
SHORT TERM TRADING CALLS:
1.VOLTAS(131): BUY/ACCUMULATE BETWEEN 128-132 FOR THE TARGET OF 145-155++ KEEPING STOP-LOSS OF 118(IN 2-3 WEEKS)
2.PETRONET LNG(174): BUY THIS STOCK ON EVERY FALL FOR THE TARGET OF 180-190++ KEEP STOP-LOSS BELOW 166.50
3.EXIDE(153): BUY THIS STOCK KEEPING STOP-LOSS OF 151 FOR THE TARGET OF 158+++
4. BHARTI AIRTEL FUT: BUY AROUND 408-400 KEEPING STOP-LOSS OF 393 FOR THE TARGET OF 420-430-440+++
5.SAIL FUT: BUY AROUND 111-114 KEEPING STOP-LOSS BELOW 109.50 FOR THE TARGET OF 118-124+++
ASTROLOGICALLY: The planetary position shows weakness to persist for August & September. However in this week, Tuesday, 9th August and Thursday, 11th August shall see weakness, however wednesday 10th shall see positive move. There are 30% chance that I may go wrong.This week may provide good buying opportunity.
Safe Harbor Statement:
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.Nothing in this article is, or should be construed as, investment advice.
Disclaimer:
This is neither an offer nor a solicitation to purchase or sell securities. The information and views contained on this blog are believed to be reliable, but no responsibility (or liability) is accepted for errors of fact or opinion. Writers and contributors may be trading in, or have positions in the securities mentioned in their articles. Neither I (Vikas Srivastava) nor any of the contributors accepts any liability arising out of use of the above information/article. Reproduction in whole or in part without written permission is prohibited.
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