So is US………

The markets are fighting for their survival as the Bull Run took a beating at the bourses due to US internal problems. The markets will take considerable time to resume their upward move. (Pls.read my earlier write ups.---the range suggested at 5250-6290 but the high touched at 6347). The game plan of the operators are very clear that they took the Sub-prime issue for more than 6-months so that the retail investor forget. I warned that the sub-prime issue is much bigger than what they pronouncing.

Now the long period of consolidation is good opportunity to traders as they can get in and get out at every 12-15% rise and fall. The earnings will be good to the Indian industry as the consumer demand and the economic growth continue to flourish. The markets likely to test the bottom at 5192-5226 at the worst scenario but this will happen only if the Nifty fails to cross 5935 before the end of Jan-FO series.

The markets likely to get support at 5670 level as first support and if trades below that level then the support at 5445-15 level at the October-07 level. So long the Reliance stays above 2630-50 level, ICICI stays above 1135-29 level and the ONDC stays above 1090-1110, SBI stays above 2020 and the Bharti stays above 810 level the markets enjoy the bulls support. This correction is a measure to MFs & FIIs to save themselves from the Mid-cap trap happened at 2005.

No longer immune…….

The Indian markets are resilient to the external pressures of equity fall as the markets see god future but the immediate and short-term pressures cann’t be ruled out. In my ealier write up dated: 29/10/2007, clearly mentioned the possible up side be capped at 6290.

(It can’t be stretched further….…..I foresee the Bull run can become a long consolidation period- more than 6-9 months with a range of 5250-6290 at Nifty level).
The markets are likely to see more down ward action than upward momentum. The rise and fall ratio could be of 1:3 from next week onwards until Aug-Sep-2008. Incase economy could face the challenges for next 6 months than the upward journey in the stocks resume. Indian stocks valuations based on the broad based economy and growth prospects is over, sure for now. The real test of price move in upward direction depends on the companies that have to perform given the opportunities, then the markets.

Uncertainty is Certain…

The stock valuations are most vulnerable by their nature to the minor and major issues and to local and international issues even if they are not of much importance on the face it but influence a lot by creating turbulance in the minds of the investors, cause anxiety that refluct as "demand and supply" cause fluctuations in the price irrespective of the percentage of concern. We can easily say, “the uncertainty is certain” at the bourses each time and every time. Those who fear about uncertainty can search their souls in peace, as nothing is certain.

As expected in my earlier write up the market bounced back on bull track in 4 trading sessions.(………if the Nifty to close above 5935 with in 3 trading sessions. At the immediate level the Nifty shall not close below 5670 level to continue the bull run…….. The markets likely to take help from the tech stocks, FMGC and from the Pharma).

Now the challenge at the Nifty level is to stay above 5778-71 to register a new high and above 6400 level by the end of first week of Feb-2008. The run up in the prices of power and infra will take a back seat and the service sectors and hotels will enjoy the support of bulls along with FMGC & retail move. The network of gas transportation is the emerging sector. I have been suggesting holding in Fertliser stocks and the next big bet on banks with insurance exposure. These sectors will explode maximum followed by oil exploration and allied services.

The end of the BULLRUN for some time?.

Whether the markets are taking deep breath to settle for a long leap up move to scale new highs or this could be the end of the Bull Run? I see a steep correction like that happened in May 2005 if the Nifty to fails to close above 5935 with in 3 trading sessions. To console the brave hearts, at the immediate level Nifty shall not close below 5670 level to continue the bull run.
Incase the nifty fails to trade and close above 5885 tomorrow, it is likely that the markets likely to touch 5321-28 level and then markets need strong cues to rejuvenate the bulls.
The big boys of the market are very silent for their own reasons but the time has come that they need to infuse vital medicine to the Bulls to take on Bears. The good support of RIL at 2640-30, SBI has support at 2135-2128, ONGC has support at 1060-70, Bharti at 835-829 level and the ICICI has support at 1085-1090. Incase two or three stocks could stay above 4-5% above those support levels then the markets are for the Bulls.
The markets likely to take help from the tech stocks, FMGC and from the Pharma
With out doubt, the Small cap and Mid-cap run-up story is intact until the Nifty stays above 4865-4935 levels.

Gross & wild violation…..

Any body who live with technicals can contribute this fall is steep and wild in violating the supports. Any way the fact is the bottom is lost. The hope totally depended on the reliance, ONGC and SBI. They are very strong even at this level of correction. The bulls have the last opportunity to believe the market is a Bull market until it stays above 5175-80 levels. The markets can fluctuate with a wide range of spread for a greater consolidation as the prices have reached relatively high level.
Then the hope lies a head so long the RIL stays above 2580 at immediate support level and can even touch 2440-50 level. The ONGC got the support at 1090 and even can touch 1010-20 level. The big banking leader can touch 2020-2030 and even touch 1910-1900. The high tech ICICI can touch 1020-1010 level. The violation of the above levels can cause deep cracks that can take months to repair the bull move to regain.
So wait and see what will happen at global level and at the local level. The ray of hope lies with the support from local institutions and the deep-pocketed HNIs who are waiting for long time when the FIIs are at buying spree after the rate cut at US.

Distribute and eliminate…………..

Who will buy at higher levels?- is the question asked by many and the doubt can be answered only when some body experiences the taste of buying at the top and selling at the panic bottom and realising the situations that made/forced to do so.
“Don’t be CRAZY to chase…”, “be cautious…..,” the phrases often used but by shouting… "buy buy buying—happening every where……"..create a situation, confuse the minds of investors and make them to believe that every thing is rosy and beautiful. This is a classical effort to prepare the retail small investors to become scapegoats.

In my earlier write up cautioned the readers to think about the happenings at the bourses. The speeds at which things are happening are very new to Indian investors and are losing time, opportunity and money in the process. The game plans are designed in such a manner to eliminate the retail investor incase somebody holding good stocks at fair prices.

“The steep falls and steep rises give little time to think.”— “Stock Market” is a mind game and every step of investment shall go after through research, understanding the business and the timing of pricing the investment.
At the end of the day “Minting Money” in the “Stock Market” comes by “Buy Low- Sell High” but not by buying cheap………………

Y can’t it be…………….

The story is contrary to the current happenings at the bourses. The positive side shall go like this way….
In my earlier write up I clearly mentioned to hold positions in fertilizer stocks for decent gains that turned right. Now they doubled from the prices recommended to buy & hold. In the same manner I wrote about the investments of FIIs in our markets. They first invested huge amounts in the Reliance group. They are familiar with the Reliance group growth story than the Indian growth story. Now they are spreading their investments to other sectors with different groups.
The situationed at large caps are rather fully saturated at the price level and left with little scope for further appreciation. So the MFs, FIIs and the DIIs are left with no option but to explore new opportunities with emerging companies, though they are small to medium in size at this point in time. The flare up in prices is due to the mismatch in their size and the amount of liquid cash chasing the stock.
The negative side shall go this way….

The small caps and the medium cap stocks are now in their flare-up run at the bourses is visible but the investigative approach can show a dark side of manipulations in the game.

The story goes back to the 2005-2006, the FIIs, the MFs and the operators heavily invested in (the early bird catches the fish-but the frontliners bite the bullets in the war front) the Mid & small caps to capture the instant large gains which turned out a futile effort due to lack of liquidity due to the steep crash when the Sensex was at 12000-12500 range. The investments became dud for long two years with no moves. After a long frustration, now these people captured the up moves with vengeance.
I personally feel that the prices are sky rocketing with thin edge time to retail investors to participate in those sharp moves is a clear sign of distribution at higher levels.The retail investor will now about the rise in the scrip at the end of the day, after the next day only large participation comes above 20% rise. To conclude the view, these stocks likely to hit the lower circuits or steep fall occur after three to five trading sessions of Bull Run. So Be cautious…………………… buy but never chase.

Nobody can stop…..

Nobody can stop or make an end to the stocks “moving”, but the question is always on the direction, at the end it surprises many. Market is the BOSS and boss is always right.

Never be regid to dictate the move either to upward or down ward, just respect it - you will be rewarded with profits.

The New Year of Indian stock market has closed with a thumps down move after 7 years on the eve of the celebration-“Happy Diwali”. The Indian stock market is left with more steam than any body could imagine. So, I personally suggested readers to go by stock specific rather than depending on the Index.

Markets have to fall to eliminate the weak hearts and the daydream manipulators. These two sections are always at the losing end at the end of the day because they place their money on weak fundamentally weak stocks but depend on momentum.

The strength of the market comes from the profits of adopted business models of the companies but not on their dripping margins. So never place your bets on the run-ups but on the sustainable earnings made by the good managements. The story is on and on but the identification of such companies…………….? Wait & watch.

Let the Indian Stock Market provide you a Happy and Prosperous New Year-2064

It can’t be stretched further….

It is a merciless killing of the “Bears” at the bourses by the Bulls and intelligently trapped the Bears in the pretext of mid-term and PM resignation……!. But the Bears could exert some pressure on the bulls to take a back seat on Friday that failed to the core by Monday. The sustained effect can be seen only when there is a reasonable selling happens on Tuesday, otherwise it is endless Bull run.

The banks are in news as the RBI credit policy and anticipated rate cut in US and at home. The credit off take has slowed considerably and the real momentum growth in stocks can put to test in future. I foresee the Bull run can become a long consolidation period- more than 6-9 months with a range of 5250-6290 at Nifty level.

Sincerely speaking the movements at the bourses put my mouth shut and the study was put to halt. The other side is that the study has to be reflected in my trading so I decided to publish in my "moneymagicbnr.blogspot.com" as TRADING TECHNIQUES link.

No “net” and out of publishing……

………….(read 15th July posting)……..As Nifty reflects 50 companies, all companies won’t rise equally, on the first phase 3% rise works out to be 1290+ and Nifty could touch 5950-6020 ranges

……read the previous post..."The current P/E of Nifty as on date is at 23.4 and the Nifty at 5211. Now the best P/E can be at 25-26. So mathematically the Nifty could touch 25.5*5211/23.4 works out to be 5679. The FII fund flow and the euphoria of chasing stocks can last for few days, later the basics will come on to the discussion table".

In my earlier posting suggested the readers to hold RCOM to sell at 725+ and Bharti above 1050+…as the levels reached, pls. Book profits in case any body holding till date.

The endless story of bull market in India is intact and one can see very good prices to their holdings in future. The corrections are to invite fresh momentum to the the market but the caution is some sectors are over valued at this point in time, ultimately that counts- No body likes to travel in a sinking boat.

High Volatility…wipe out fresh Shorts….!

The Nifty stocks are very cheap to the FIIs as the Rupee appreciated from 45 range to 39 range. The FIIs already invested in India are enjoying the benefits of their wise decision and even the new/fresh sect of FIIs are buying the stocks at almost 13-15 % less than the prices prevailed on the day, after the 50 basis points rate cut by Fed i.e from 18th Sep-07. The reports say that the FIIs have invested ($4.8+ billion) more than Rs14800/- crores since 18th to 1st Oct.

The current P/E of Nifty as on date is at 23.4 and the Nifty at 5211. Now the best P/E can be at 25-26. So mathematically the Nifty could touch 25.5*5211/23.4 works out to be 5679. The FII fund flow and the euphoria of chasing stocks can last for few days, later the basics will come on to the discussion table.

The P/E is at the 2008 earnings that were not even calculated as the Sep.-07, results are not announced but already discounted to a large extent. In case of any dampen results from the core sector then the damage can be disastrous.
Even every thing goes well then also the P/E will settle at 21+, works out Nifty to be at 4677 or P/E at 22 then the Nifty could be placed at 4899.

So, in case get exited by the current bull run and buying at higher levels can take you to carry for at least 2 years before things works out on the new earnings of 2009-2010.

Global gains can be extended…?

The indices are rallying against each other at the global level and we are also integrated. The rally can be supported by the RIL and SBI as they were lagging.
At home, the Nifty has Bulls support above 5053 level and Bears wait until 5019 level and from there Bears will have advantage.
The RIL has support at 2275-71 levels and the upper side resistance at 2326-2331. The SBI has support at 1875-71 levels and the upper side resistance at 1926-1928.The RCOM has resistance at 626 and become weak below 603, Tata Steel has support at 835-34 and good support at 825-23, the resistance at 851.
The DLF is strong above 763, stop loss at 751-53 level. The UNITECH has bottom support at 312-09.
The run-up in REL has good bottom supports at 1305-06 and Relcap has good support at 1753-56 and the longs have to be maintained. The Bull move can be accelerated in Idea above 129 and in IFC above 149. Fresh long positions in L &T can be initiated above 2895.
Those who are long in NTPC can book their profits, as the target price is close at Rs 220/-

The CRACKS & PLASTERING work ….

The Bulls are fully enjoying the days of happiness and the celebrations are being continued. The Bulls could push the Nifty to such a level that it will not fall so easily in-spite of the best efforts by the bears. The foundations at bottom are so strong that the continuation of “Bull Run” at this point in time is very much assured. But the strong numbers of the Sep-07 quarter can add value to the efforts made by the Bulls in advance other wise ?.
The power play is on and the markets are in thumps up situation to Reliance Power and its parent REL is enjoying the booty. The bulls are in charge of the Indices to scale up to new highs each time and every time.
The Monday move is a clear sign of cracks in the Bulls work but they could immediately do the plastering work to mitigate the severity of the damage. The Bears to some extent are shattered by the moves of Bulls on streets. As of now the time favours Bulls but from the US, the news flows are to be in favour of the bears and could exhaust the current Bull Run.
The strong case of Bears is their “life tonic” from the techs and their expression of inability to cope up with the rising rupee. The impending dangers in the US financial markets are cracking from the bottom and the slow down has begun beyond doubt. So the euphoria in the stocks across the globe could take a breathe for next six months as consolidation.

Never Fight?…...Just SAIL!

The history has never recorded any person win against the market with high fighting skills but just try to float while sailing.
The markets are enjoying the best days of Bull Market with euphoric support to the Indian equities. The markets steeply corrected at one point in time but recovered with the RIL up move. The huge civilization and the triumphant bull move scaling the valuations up on every day without break from the breakout from a low of 1921 to 2426 to date. The other counters are also making surprises to every body as the breakout with 30-40 % in two days that to in F&O scrips.
The Bears could exert aborted pressure in the early trade, failed to maintain through out the day. To some extent, some counters in reality sector, banks and power made some backward move. The real test to Bulls will be after expiry as the valuations were too stretched to carry along the October.
The GMR Infra del.(at 786/-) suggested can be booked tomorrow.

Settle the Scores……Valuations next!

The “Bulls and Bears” fight at the streets intensified and may lead to a disaster. The company’s valuations are based on the earnings and the future performance with a projection. But now the wild spree has become so wild that may harm the small investor- the real backbone of the stock market.
The polarization of the investment groups supporting a few companies or a sector will create grudge on the operating group either it could be the FIIs or MFs. However great potential a company/ industry has that can deliver better results but it is only an assumption and assumptions can go wrong at any point in future. For whose sake the run –up in the markets when it was absent a few days back. There was no real change in the companies earning or in the economy.
The Nifty was closed at 4494 on last Monday and today closed at 4932. The sub- prime issue was not resolved, it is simply 50 basis points cut can’t bring so much of money to our markets at this astronomical prices, then for whose sake "We are celebrating at our bourses".
Do we mean that the FIIs do not have calculators or do not know how to calculate the valuations and blindly buy at the price that is offered?.
Any way the old adage is always right- “Buy Low- Sell High”.

Wait...."Bulls and even Bears"?

The ardent Bears love to sell at high but the Bulls are also eagerly waiting to trap and make more money while the market is shining in bull grip with media attention. A classic example of RNRL and RPL moves on Friday.
The momentum favours the bulls at this point in time. So those who are long in the Nifty and the other stocks can wait till the nifty trades below the 4785 level. In case tomorrow Nifty fails to trade above 4821 level and the high could not cross 4863-69 level then prefer shorts with stop at 4876-78 level. For investors the suggestion is to buy on declines in Idea, Zeel, and VSNL as investment purpose. The Wipro, HCL tech and TCS in software, in pharma – Ranbaxy, Dr Reddy and Biocon are calls adopting KOI principle (Keep On Investing…. already suggested for ITC at 168-170 range in July).
The Day traders can find opportunities to short in the reality sector but maintain GMR Infra Del. suggested with a stop of 786/- at the acquisition price. The weakest among the Nifty are metals- Tata Steel weak below 748-49 level, Sail weak below 195/- level, Ster weak below 696 levels.

Wait....Bulls and even Bears?

The momentum favours the bulls at this point in time .So those who are long in the Nifty and the other stocks can wait till the nifty trades below the 4785 level. In case tomorrow Nifty fails to trade above 4821 level and the high could not cross 4863-69 level then prefer shorts with stop at 4876-78 level. For investor buy on declines in Idea, Zeel, and VSNL as investment pupose. The Wipro, HCL tech and TCS in software, in pharma – Ranbaxy, Dr Reddy and Biocon are calls adopting KOI principle (Keep On Investing…. already suggested for ITC at 168-170 range in July).
The Day traders can find opportunities to short in the reality sector but maintain GMR Infra Del. suggested with a stop of 786/- at the acquisition price.
The weakest among the Nifty are metals- Tata Steel weak below 748-49 level, Sail weak below 195/- level, Ster weak below 696 levels.

The re-rating in the offing……..

The markets are "re-rating the stock valuations" time and again and every time . This time also no exception to re-rate the stocks to make some are as “Market Darlings” and some are “Destitutes”. The history through some light on the market movements and the market participants understand the need to observe the change in the CHOICE.
The political developments, economy and the business environment will influence the price movements. Now the situation for the telecom industry in now a place for fierce competition and the new players (a beeline queue for licenses) are threatening the market share of the existing players. Now the top two players Bharti and RCOM are fully valued at this point in time. The Idea has some room left for price appreciation but the others will survive with +5 % up side and – 20 to 25% on down side.
The power sector also reached a stage where there are more proposals than the start up of work at the ground. The construction work will take 3-4 years for each project and the prices zoomed on the hopes of applications and approvals. In India, the bureaucratic hurdles and political mileage of the oppositions in encouraging a protest is clearly visible in POSCO and Mittal Steel projects. The SEZ policy was well written on the papers than on the implementation. So beware of the negative news that favours the bears.
Now the momentum is in favour of the bulls and likely to stay till the expiry. The fresh buying in the hot stocks of today can become monuments for future.
Try to identify those stocks that can yield better margins in their balance sheets rather than following the trend assuming that it will continue in future also. Just recollect the fate of Sugar industry and remember the fate of Softwares.
"Think differently" doesn’t mean to be eccentric. Try to analyse the history, understand the present and Act for the Future. Good Luck.

THE MOVE BEYOND…………

The markets made a blow out move after crossing the all time high at 4640 level- a nonstop journey to 4850. The word of caution at this point is the markets move up but with selective scrips participating the move. When we compare the scrips performance with the Nifty from the previous high to this level, there are very few stocks that advanced, but the Nifty crossed the high with “The RELIANCE group”. The Ambanis only enjoyed- as a matter of fact it could be the real cause of worry. A negative thinking can pose a question that “Is this group that represents the whole economy?”. If your answer is ‘Big No’ then there is something cooking.

But the other side of the story is colourful when we consider the past experience of the FIIs. In the global melt down that happened last year, the FIIs were trapped in the illiquid counters. The bitter experience due to illiquid counters and small companies kept them away from choosing them. The same story continued with the case of Sugar stocks, tea stocks and the other commodity & under performing sectors. The lessons learnt are costly and nightmare haunts them till date. So they are focusing and patronizing those groups that assure them consistent returns.
The FIIs are pumping money in the hot sectors with sound management. In the same energy sector, ONGC is kneeling down at RIL, REL is a high fly where as the NTPC, CESC and other power companies seeking fund support. The RCOM is jubilant where as the other MTNL and VSNL are surviving. The RNRL and RIIL are zooming where as others scouting for buyers.
The story is as simple as that- the real test for INDIAN stock market is the domestic FIs, the MFs and the venture capital funds shall come forward to encourage the best management groups to flourish along with the investors.

At striking distance….?

As posted on 15th July-07 titled…. The “Expansion-Extended”-global integration, clearly mentioned that the markets are likely to enjoy the real boom and likely to test new highs every time. (…Pls. read the full text).
…….Even if we go by the P/E ratio rule, the current P/E works out to be 21.63 at 4509 and the historical experience used as a measure to extrapolate, the low P/E at 17-18 and high at 29-30 times. Even if there was no surprises in the growth in the earnings, the rule of “averages” helps to arrive P/E @ 17.5+29.5= 23.5, on a conservative basis Nifty could touch 4509*23.5/21.6 works out to be 4900+.

It is those who win the battle are those who are determined to win. The market provides opportunity to every one those who understand it.