The bleed may continue…

The markets are beautifully placed again with a bottom building process at 2560 level first and again at 2860 level but the tapering rater lowered high even today places the chart reader to think in contrary to the possible move but one has to live with the open mind to accept the reality.

In my earlier postings it was mentioned that the markets will be bottomed when the last leg beating was over. The Index on 17th closing was at 3075, the stocks that closed HUL-242, LT-800, BHEL-1191, HDFC-1782, HDFC Bank-1026, SBI-1420 and Bharti-677 and the lows registered on 27-10-08, after the suggested possible Bear beating, Nifty levels registered at 2253, HUL-185, LT-680, BHEL-981, HDFC-1382, HDFC Bank-862, SBI-985 and Bharti-483. the markets were bottom in principle but may the index likely to move close to the lows or even to lower levels to 1935-1865 level (only 10-15 percent chances existing given the present situations).

The trimmed excesses….18*10

The markets are bound to rise as they fell. This is a natural phenomena inevitably happens whether some body likes or not.

The concern at this hour is “how fast and by what time?”. This is the common question lingering in every investors mind. Now just imagine some body met with an accident and was admitted in a hospital, placed in intensive care. Then the question will be of What?. Whether it is survival or surprise on the happening?. Then every body will accept with joy that the patient is alive and will be discharged soon after surgery and due care. The same situation is happened to the financial markets across the globe, all are hospitalized, some are in ICU, surviving on Govt. intervention and some are in specialists care.

So my sincere request to investors is to for get reading the daily news of financial happening unless you prefer to be a day/swing trader. The best thing is keep averaging to the limit some body can, enjoy dreaming the golden days that are being manifested.

The only trouble with the recent young investors is the very nature demanding the high valuations that were there and as a matter of fact they paid for the boom. Now the situation is quiet different, the excess valuations of high P/E valuations above 50 were gone and the realistic levels of 9-14 are ruling. So adjust to the reality and accept the truth, keep on investing in companies that delivered high rate of growth over 3-4 years.

The ray of hope….17*10

I think that the Indian markets are very close to bottom out for time being at least. The stocks are showing resilience to move down in-spite of the best efforts by the Bears.
As posted yesterday the infrastructure stocks are finding buyers at the lower levels. There was a clear hope down the line for next two years we are likely to manage and may cross the previous highs based on our internal consumption despite of the global turmoil that we see now.
The crude is falling, metals plummet gives a scope to ease the fall in inflation. The central govt. likely to announce more investor friendly investments norms and the FII inflow will start coming back to India after Jan-09.
But for now the markets yester day recovered on the back of short covering and some kind of buying at the bottom. The worst is not over as the stocks like HUL, LT, BHEL, HDFC, HDFC Bank, SBI and Bharti have not tasted the Bear beating. So Nifty likely to see some lower levels but it won’t hurt as the most already lost their value. The Nifty likely to cross the 3660 level and may touch the resistance at 3930-3885 level in the coming months. The next fall will complete the bear hammering and the Bulls will take charge. At this time it looks like a joke as it was looked impossible to see a downward move when the indices climbing from 5800 to 6200 level.
The retail investors always caught because of the Price Luring while moving up and Fear of Loss while falling down. The markets always provide enough chance to make money but we tend to be ignorant to catch the opportunity. So it is not the BEST PRICE to buy A STOCK but the RIGHT TIME to buy is very important.

The hope developed….

The yesterday knock took the Bulls a back seat but the global developments like rate cuts and other positive measure to save the financial system improved the sentiment especially the Asian markets took some lead that propelled the indices to scale new highs.
The Nifty took support at 2860 as discussed in yesterday posting mainly on the back of Reliance improved performance on the bourses. The ONGC took a knock from a high of 780 to 720 in the last 15 minutes is a concern along with the expected cost burden on Bharti for holding excess spectrum. The RIL though recovered from the low of 1151 level to 1240 level but it is still under performing the market can pose a threat to bulls.
The metals recovered on short covering and the star performer on Nifty is the alternative energy major Suzlon, on the back of Obama win who may encourage by formulating policies that benefit the sector.

The Bulls want of….

The global clues are poor to gain strength in our markets. At this juncture the Bulls are want of energy to take on the crippling indices to higher levels. As posted yester day the nifty took support at 2860 level but lost the momentum strength that built in the after noon to the inflation news that rose to 10.72% from 10.68% on weekly basis though is not a concern at this hour of credit crunch.
The statement from chairman of SBI that took a beating that the stressed assets may increase as NPAs in future is a clear sign of recession. The banking industry is the torchbearer of the bull move may now take sides for the Bears.

As per the reports, the bank of England has cut the rates by 150 bps to 3%, lowest in the last 50 years, shows the liquidity concern and the slowdown in growth. The markets shall take it as a positive step, in the long run will help the industry as the crude came to a very reasonable level where every body willing to pay for it.

The global markets are in deep red despite of many adequate measures announced by various governments to mitigate the financial crunch and mitigate the fears of slowdown. There was no solace to investors but the blue chips are at attractive valuations.

WITH DUE RESPECTS TO icharts.

Congratulations OBAMA…..

Congratulations BARACK OBAMA…..
“Hearty congratulation”, CHANGE made a mark in the history to make a CHANGE.
The world experienced the waves of Obama, now a reality to accept the CHANGE as a reality.


The markets fell as they touched 3280 in the futures and fell a crumbling tower to settle at day’s low at2971, closed at 2995. The resistance can be used as an opportunity to build longs at lower levels from Nifty touching 2680-2630 level and bouncing back with a vigour. To satisfy the above condition, the RIL shall not trade below 1080-75 level. The sudden shut down of plants made the markets to feel the heat of recession impact that affected most, especially the India’s top Cap company.
The US markets are also trading lower to accept the more tax plans by the new Prez. The local issues will become clear in next one week, until then just trade or keep fingers crossed keep guessing.

In my earlier post titled as Looming uncertainties……Incase we could rally up to 3280 then the chances are there to see more short covering but the chances are remote to view this favourable situation. The down side protection is more important than the concern for upward rally at this critical juncture. As expected yesterday, Nifty got resistance at 3035 level but in the last ½ hour it could cross the resistance to touch 3065 level and ONGC crossed the resistance at 710 to touch 716 levels. The Nifty shall not breach the 2680 level and the RIL shall not go below 1230 level.

The Bulls party …….

The markets are enjoying the up move as if there was some Bull market at it a high of jubilant mood.
As expected earlier in the previous posts that the markets will get the bulls support as the blue chips are thrown on streets but very few takers to accept the offer. Those who shorted below 2860 level and those who were aggressive below 2680 are started covering their positions. I clearly mentioned not to short below if not interested to buy just maintain sidelines till the confidence builds to venture.
The surprise to day was the ONGC move and the operators in ONGC might already expected a short covering in global crude price as it was trading above 12%m so the ONGC crossed the 710 resistance and rallied to 780 level as the 716 now became as an immediate support. The RIL is consolidating at 1420-25 level as the resistance playing a hinder to a free rise.
The Governments across the globe came forward to cut the lending rates and infused more liquidity into the system to lay some support to the falling financial markets and sagging industrial growth. Now Indian Government take a bold initiative, has given assurance to the industry leaders to take advantage of the financial crisis of the west and maintain the work force without layoffs as the elections are nearing.
The Nifty has crossed the immediate risk of falling back to 2200 level as the bottom was neatly developed at 2550-60 level. So now the Nifty is likely to swing between 2850-3680 levels till the “New Year-09” bells ring.

The World is waiting.......

Presidential elections "a new life" of US. Will the 44th President of US can work for a change that the world is looking?.

I look for a better loving human beings living for fellow beings on this planet?.

The looming uncertainties…..

The intimidating uncertainties in our financial sector are unfolding through the top brass of country second largest bank head confessing the need for bail out package. The Business Standard covered an article titled as With Rs 630k-cr debt, MFs and NBFCs need bailout: Kamath, Press Trust of India / New Delhi November 2, 2008, 19:15 IST……."There is no need for a bailout package for the Indian banking system but the bailout package could be required for mutual funds and NBFCs………

The RBIs move to infuse more liquidity into the system reveals a fact that we are heading to a collision of financial crisis, efforts are in place to avert the gloomy conditions. The opportunities for Bears to make a killing at the bourses are opening widely with more favourable news than to the Bulls. At this point we are now enjoying the relief rally with positive cues from the global markets. The FM to meet with the bankers, PM meeting with the industry heads to create investment friendly atmosphere is more good news that can halt fall in the stock prices.
Incase we could rally up to 3280 then the chances are there to see more short covering but the chances are remote to view this favourable situation. The down side protection is more important than the concern for upward rally at this critical juncture. As expected yesterday, Nifty got resistance at 3035 level but in the last ½ hour it could cross the resistance to touch 3065 level and ONGC crossed the resistance at 710 to touch 716 levels. The Nifty shall not breach the 2680 level and the RIL shall not go below 1230 level.

Live with the numbers…..

Whether we like it or not we have to accept the movement of the numbers in the stock prices. The recent developments have some positive impact on the liquidity front may give support to the bulls to absorb the selling pressure. The RBI rate came when the inflation is tapering south but the more concern is on the IIP numbers representing a torrid industrial growth.

We are now at the midst of the pullback rally that can easily take us to 3100-3150 level. As mentioned on Friday, the Index swings were violent due to ONGC, Bharti and RCOM results effect and RIL participated.
Now RIL has come out with 40% rise from the lows at 930 levels to 1395 levels. But this time the banks bellwether SBI waiting for some good news to participate. The up move can be expected only when it trades above 1330-1350 level. The ONGC may find resistance at 708-10 level and may settle below 625-640 level for some tome unless the crude surges above 85 dollars per barrel immediately. The NIFTY has resistance first at 2998-95 level and again at 3031-25 level and good above 2800-2796 level but the lower level support expected at 2751-39 level.

They “R” there……

The FII problems are there and their economic conditions are not resolved but are not incremental in their nature. The FIIs pulled out of nearly 15000 crs. from our Indian equities but their appetite seems not over. The leveraged liquidity from the top economic counties like US,UK, Japan, Germany , France and other sound countries have indiscriminately irrespective of their investment value chased the stocks in emerging markets with a tag like BRICs. The domestic investors in those countries failed to think in contrary but accepted as a god sent opportunity, invested at very high levels. The scheme designed by FIIs run as per their plan, then started pulling their money from equities to PE placements in real estates and the other debt instruments. Now when every body noticed the fact then these FIIs resoted to sell in the exchanges to make the prices fall further to create a panic situation, add fuel to fire started chanting the basic principles of P/E ratios and the high valuations.

The real-estate investments will give multi bagger opportunities to these FIIs & the foreign companies after 5-6 years as they could grab the prime locations in the top metros of our nation. The economy will get its strength and the policy changes will help them to open shops & mall first in single brands and later in multi brands. The logic can be traced with simple arithmetic calculations like averages. Suppose a person with long-term vision and plan who could influence the markets can dictate the terms like what the FIIs are doing right now. The basic principle is same to every body but who follow and make others to follow the foot prints is the matter. The Person who bought DLF at IPO range at Rs600/- price, 200 shares cost Rs 1,20,000/- and sold 100 shares of DLF at 1100-1200 range can now buy 450-550 shares. So the average cost his total 600 (500+100) shares cost is 1,60,000/- only. The same is the case with RCOM, RIL, REL infra, Relcap and so on.... This can be spread to any number of blue-chip companies. The real loser is always the retail investor and the day trader who speculates with ones great mind and ability to satisfy the inherent ego and to make a foul cry on the circumstances that made his/her condition.

The policy actions are inducted to infuse liquidity but on the other hand we are making our selves fatten to be cut by these FIIs feast of selling at the higher level. In case the above discussed situation unfolds then our markets will stick to sub 2500 levels by using a branded glue stick for a longer time than anticipated. This will become a boom to the FIIs to sketch a different plan after some years when the memory of the retail investors fades.

The India Sovereign Fund concept will kill the spirit of the value discovery mechanism underlined in the open market rather than a system that functions on the controle of Government. The markets are increasingly getting the influences of the vested interests operating on a global scale. The political compulsions, populism measures for power rather than the long-term sustainable economic gains once controlled the policy decisions but now the global village being controlled by the president though every country is a sovereign by definition.

The long designed plans are not understood unless we view them with holistic approach to news headlines. The greed for global crude controle made Iraq devastation and surprisingly the heads of the nations talk on peace measures with reconstruction activity so is our civil Nuclear deal no less than a big business opportunity for a “stagflation” flagged world big economy. The doors of the Indian defense deals to global tenders are about to open as a competitive bidding process for better treasury gains. So is our port buildings and fast lane rail tracks….and so on…

RBI cuts………

The Reserve Bank of India came forward to make a positive decision to cut the interest rates, CRR by 100 bps, repo rate by 50 bps. The RBI took the bold decision to cut CRR for injecting nearly Rs 1 Lakh crores in to the system.
This support to system can build confidence and ease the pressure on the stock markets due to the impending MF and FMPs redemption pressure. The Govt has recognized the slow down in the industrial activity especially in manufacturing sector. The agricultural commodity led industries like, Tractors & automobile, Textiles and Sugar sector season has begun but the liquidity crunch will impact the farmers that could be very costly while in an election year. The woes of reality sector due to the tight loan availability not only impact the builders but the big un-organised labourers and the related down the line industries. These steps will through a positive signal that the govt. at the helm is for the masses and willing to listen to the voices of the industry.

An effort to remind once again….

An effort to remind once again….
In my earlier post titled… The BEST chance to overcome…dt 25-08-08…
The markets are consolidating at this stage where the Nifty made some anchor at 4200-4300 level.
The markets very likely to move further to 5100 level if it trades above 4500 level (with out touching 4080-4100 level) which is very crucial resistance to cross, other wise the markets likely to see one more deep correction that could take back first to 3500 level, later to 3180-3130 level, if worst case developed then to a level that was available at 2940-3040 range, came in the last week of July-06.
The July, 2006 levels may not come to Nifty as it undergone a series of changes in the composition, higher capitalization stocks like DLF, UNITECH, Power Grid, now the Rpower being included by 10th Sep-08.
The Indian markets are taking the earlier lead while falling and even in the rise, but the global crisis may not let it move in unidirectional up move. At the current valuations, the age old thumb rule method of identifying the stocks like P/E is still high at 18.25 as per NSE, when compared to the historic movements.

Today the Economic Times covered with a title as ….. Nifty hit by poor choice of members (1 Nov, 2008, 0149 hrs IST,Apurv Gupta & Krishna Kant, ET Bureau)…..reads…..
The frequent changes in benchmark indexes and the inclusion of stocks like Reliance Power, Suzlon, RPL, Unitech and DLF while at the same time excluding large companies with a stable earnings and dividend record have brought the benchmark index down to its knees.

Experts say that in such situations, where the index has crashed due to an abnormal fall in certain stocks, it becomes meaningless for investors to look at the index levels or compare its ratios such as PE with indices in other countries, especially when some of the index constituents have no earnings at all to talk about……………….
………. For example, if we take the same constituents of the Nifty as at the beginning of 2006, the index would have been ruling higher by about 230 points from its current level. In fact, the Nifty would not have even fallen below 2929 points compared with its actual close on Wednesday at 2697 pts. Similarly, if the Nifty composition had been the same as in early 2007, the index would not have broken through the 2900-mark…………..

No fundamental change…

The markets are in troubled state as every body knows but now the governments coming forward to take part in rescue measures. This is offering a fill-up but don’t buy for the immediate gains of further 20% but for long term it could be one of the chances offered.
The markets are temporarily bottomed out by all means but the buying at the lower levels has not happened enough to hold the bottom. So either there should be a huge buying or the price shall make a journey above the resistance levels. The either case is pending.

The Nifty is good above 2600 as first support and it shall not trade below the 2480 level but the resistance at 2880-95 level then it will go to 3200 level. The markets will considered stabilized when the RIL is above 1380-85 level and the ONGC is above 785-91 level.

For today the Nifty is good for long so long it trades above 2716-25, the low shall not breach the support of 2622-18 level but the ONGC results effect and the RCOM results will through some guidance to the markets as the earnings pressure is mounting even though much was discounted.

The Strength of shining....

WISH YOU A VERY HAPPY DIWALI

The strength of FIIs………

The financial strength of FIIs was shown on the Dalal Street for the last 20 trading sessions. The bloggers, the analysts and the domestic fund managers are kept on telling that there is nothing wrong with our economy. The need of the hour and the fact at this point in time is the global sentiment and the price erosion. The stock prices will take their course based on the fundamental strength of the economy and the ability to tap the available resource by the corporate sector.

The technicals can be collaborated after the mayhem but very few can tell the exact extent and the length of time to complete a cycle of buying or selling. Like the natural disaster which can be sensed, predicted but cannot be controlled, the same way the stock market movement that based on the instant psychology of the market participants. It cannot be controlled but can be discussed and argued after wards. The best thing is to avert the damage is kept away from it.

The cracking signs are known to many, when the Nifty breached the 4200 level one can get out of the delivery one more chance when the Nifty fallen below 3930-3860 level. Now many investors were trapped and eager to sell now, a situation known to many and willing to take a call to exit but the opportunity is closed.

The Stock market investment is nothing but prudent thinking and quick decision making but not confused hasty management of the worsen situation.

The un-mind FULL rampage

The markets world over reeling under severe damage and debris of distress due to the financial tsunami. There is mercy missions for the rescue help to save affected with humanity but the investors are not getting at least the much required first aid to save from collapse on death bed. The regulators are worrying for the past mistakes committed rather than the presence of mind to avert extent of the damage.There is n-number of people ventured to buy at lower levels as they are right by all reasons except the market commandments.

It is not the LOWEST PRICE to buy A STOCK but the RIGHT TIME to BUY is very important.

NO way….

The FII are not interested to reverse their positions in India. The short selling by borrowing will open a new window of opportunity in the financial sector of lending and borrowing the shares from our MFs and DIIs. The financial reforms will be done with this bitter experience likely to provide a congenial environment that encourages the local money flow to capital markets. The reports suggest that 2% of Indians are investing and then imagine this be 10% in next 5 years, and the Index levels. But for now the markets are in full FII selling grip, there was no bad news except their bad financial conditions.

The bleeding in the Asian markets continuing and we can be no exception for today. Unless the FIIs agree to reverse their positions, the situation can see no light for next one month. The over done of FIIs shows their nature of investment style and the good part is to place some restrictions on their distress selling to curb this kind of mayhem in markets. The emerging markets are by nature young and can not take the load in the cases of crisis of the present nature.

The FII investment guidelines shall carry a clause that they shall invest for long term at least for 5 years and they shall not press the selling button for not more than 10% their holding thorough open market operations, can resort for off market bulk deals.

Just remember…...

The history is not far way to make it difficult to recollect the past happening happened on the Indian bourses just before the crash. The challenge is to accept the reality and live with the situation offered or created. The present situation in the market was expected, to touch this 2900 level well in advance and was published in my 25th August posting.

The Nifty index level was simply a number to quote but the timing of buying stocks never depend on the index level unless the choice falls on index basket. The fall of index will help us to identify more blue chips as there was an opportunity opened to invest for next two years perspective. The trader any way live for the moment to day swing and grossly depend on the price fluctuation derived from the demand and supply but the investor is entirely a different entity, wait for the opportunity and jump to grab it.

So investor can start buy in stocks whose economic cycle is in the up swing or likely to get that advantage. Now the markets are almost bottomed out. I used to cry the same way I am doing now when the market topped at 6200 level and advised the investors to first sell the holdings and with more emphasis not to buy at that level. Now am just reversing the statement but the cry is with same volume.

Please go to the budget allocations and try to take advantage of the benefits from the excise & customs reductions that immensely benefit the companies. The Indian economy is robust and likely to take advantage of the global crisis in its favour, so try to enjoy the fall from these level instead of developing fear. The earlier article suggested for those who already invested.

The mercy at the bottom…

The markets were spared at the bottom as the stocks still holding above the earlier lows when it registered two days back. The special treatment of leveling the levels of SBI to day happened but the stock is still in bulls grip. The FMCG stocks are the ones stood against the bear hammering.

The early statement of markets bottomed out can be confirmed incase our Nifty crosses the immediate resistance at 3255-50 level and the low shall be above 3181 is good, even 3145 is also OK. The Reliance and the other majors like LT, BHEL, HDFC and the tech majors are exhibiting a better bottom for now. So tomorrow a rally of 100 points at Nifty can through the much required relief at the earliest.

The redemption pressure is mounting as day’s passes and the negative news adding fuel to fire. So wait and watch till the worst crystallizes as a solid foundation to the markets at the bottom before jumping for grabbing the mouth watering prices of the blue chips.

No longs ….

The trades are now very much confining to intraday but no longs till markets cross the 3350-3400 decisively on Nifty.
The markets are dwindling to positive and negative news as the case may be but won’t go any where from here. The regular readers will find the piece of news about the 20-20 percent move.
This time the markets met the final leg of fall in case it goes down, it will be confined to the worst scenario case to 2630-80 level that to after a consolidation of 40-50 trading days.
The economic activity will be centered around the infra structure building like ports, air ports and SEZs. The mining activity will take place heavily in 2010 onwards. But for now the projects initiated like power and distribution companies will do well in coming months along with the cable manufacturers.
For today, the Nifty is strong so long it trades above 3130-3120 level. The US and other Asian markets red will force us to open in red but no fresh shors are advised at this point. The markets will get short covering above 3280 level and will add at least150 points. The Reliance above 1460-80 level will spur the short covering activity until it reaches 1680 level, then the market is ripe for fresh shorts that will give safety and high returns with out nightmares.

The Repo rate cut effect…

The RBI has taken a bold step to reduce the Repo rate by 100 basis points. The markets would have welcomed other wise by 500 points on the announcement itself but failed to hold the gains made during the trading hours.

The markets are now likely to move up from these levels in case if the global indices won’t take severe knock. The only concern at this point is the corporate performance. The results announced till date are not bothering but the fear of future is threatening the growth in advancement of the Indices as a whole.
The Nifty draggers like tech lot bounced with vengeance and RIL got enough support at the lower level except DLF. The ONGC, BHEL, Unitech and DLF may try to boost the Nifty to cross the 3350 level which is very crucial.