Numbers in profits…….

The markets are in full bear grip as they slipped from the 5185 level the very crucial support now has become a distance dream to reach. The fundamental analysts hope that the markets get life from the numbers declared by the companies and the profits in particular. The technical analysts also munching the numbers at which the company has support and resistances. So now the season is immersed in numbers.
The Business Line- Sunday, July 13, 2008, on the front page printed “Institutional investors buy ‘out-of-favour’ sectors in July”. The text covered as “What are institutional investors buying, with the Sensex hovering at 13k levels?. Mid-cap stocks in out-of favour sectors such as realestate, infrastructure, automobile, media and banking apper to have come back into the “buy” list of leading FIIs in July……”

Let the under-performing ( POSTED on Dt 30-06-2008)…..One of the clear signs of trend reversal in a bull market, the outperforming stock of yesterdays starts the signs of under-performance as the days goes by. The Index continues to surge in the same direction but the darlings take a nap. The same is the case with the falling market. There are some stocks those fall very steep than a retail investor could identify/imagine. The outright sell off will be seen with steep falls, as the days pass by every body could recognize that what was happened?. So the Deep-pockets garner the best opportunity to sell. In this bleak scenario there could be silver ling to identify the trend reversal. A clear observation can through the opportunity open to the retailers also. The trend reversal can be identified once the weakest sector finds buying interest in the market by the smart people that could be the secret why these weak stocks won’t fall however deep the market falls.
To validate the above observation it is necessary that the underperforming sectors in the market at this point in time are Real estate and Capital goods. So it is very important to see DLF trades above 496-503 level, Unitech shall trade above 210-214 level and the India Bulls Real estate above 395-400 level. The capital goods sector though has some silver lining with orders at disposal but the heat of raw material costs eating into the profits, thus evaporations of current prices to settle with lower P/E valuations. This sector has huge potential to outperform in future but the U-turn possible only when the price of L&T trades above 2750-2800 level, the BHEL shall trade above 1550-1585 and the ABB shall trade above 1020-36 level.