Messages
MY WEEKLY TAKE ....
Trading levels --- 25th / 29th March 2013
Political unstability was the last thing that the markets wanted. Macro problems were already weighing heavily and DMK withdrawing support broke the back of the broader market particularly.
The true picture of market condition is not reflected in either the NIFTY or even the MIDCAP index. Many popular counters got simply decimated and these stocks are trading at the levels lower than when nifty was at 4500 in December 2011. Many stocks have even gone lower than October 2008 levels. SUCH
IS THE EXTENT OF THE DAMAGE.
Market may continue to underperform for some more time and I expect a strong support … a very strong one – to emerge around 5460/5480 levels. These levels may come in play in next 8 to 10 trading sessions with intervening upticks couple of times. THIS IS ASSUMING WORLD MARKETS WILL BE AT THE MOST IN SIDEWAYS PATTERN.
American markets have turned sideways already and many analysts in US do not see a big upside from current levels. If the resultant downslide starts within next 10/12 days when Indian markets are in the strong downtrend, we can even have levels of 5200/5250 on nifty.
RAYMOND ...
raymond is at an interesting stage ..... buy around cmp of 285 and hold for med term with sl of 270 on weekly closing basis ....
risk/reward is too good .... sl is just about 15/17 rupees which is just about 5 to 7 % .....
POINT TO PONDER ....
most wealth management professionals base their projections on hypothesis that equities will give 15 % overall CAGR over long period of time ...
the 15 % CAGR fig comes from inflation + GDP growth percentages ... ie ... 9 % inflation + 6 % growth etc .......
in indian context, we have NO DATA to support this hypothesis ......
if this does not work out .... the poor investor is the loser .... NOT THE ADVISOR .......
can any wealth managers throw more light on this very important point which has very wide ramifications .......
imagine the effect of 12 % CAGR compared to 15 % projection ..... over a 20 yr timeframe ....... .....
at one time, i had asked a very prominent wealth manager from pune .... to give me some data about US MF industry .....which has long track record .... but he did not oblige although he said that he has the data .......
our MF industry is just 20 yr old .... earlier ... for first 7/8 years the volumes of assets under management were too low and inbetween 2003/2207 we had a mother of all bull runs .... all this has skewed the findings in a big way .......
MY WEEKLY TAKE .....
Trading levels --- 18th / 22nd March 2013
Last week was a volatile weak. We had 4 down days and on up day. Up day had huge intraday reversal indicating trend reversal but that was negated due to lack of follow-up on subsequent day.
Overall, we ended the week 1.5 % lower with neither the bulls nor the bears having clear upper hand.
American markets continued to inch upwards with some positive news-flow from housing / retail sales and employment data. Our markets were not much enthused by this further up move in DOW and S&P and continued to chart their course with eye on RBI meeting on this Tuesday.
25 basis points REPO rate cut is already factored in and market will move about 50 nifty points when it actually happens. The kicker will come if there is 50 basis point rate cut or NO rate cut. In that case market will make about 200 points move in either direction.
I am still watching world markets rather cautiously till I have a conclusive evidence of a clear break-out. It may take a week or two for that.
Last week I had mentioned Castrol and Indraprastha. CASTROL continued its up move but Indraprastha dashed to 290 on Monday only to give up all those gains in the next four days.
This week you may continue with Castrol and also try your hand at longs with Madras Cement.
MY WEEKLY TAKE .....
Trading levels --- 11th / 15th March 2013
After 5 continuous down weeks, a bounce-back was on the cards. It kicked in from 4th march afternoon. The sharp pull back is nearly 300 points. Follow-up next week is crucial as this is a technical pull back since nothing has changed fundamentally.
Some European critics have in-fact welcomed the setback in Italian elections as this has given the first and real indication of the mass response to austerity measures which the European rich nations have been pushing thru the gullets of poorer southern nations.
American stock markets have overlooked the effects of sequester / the resultant tax cuts and they have given a big ‘thumbs-up’ to somewhat better economic news flow. DOW has made a new all time high and S&P is not far away.
This meant the topping-out patterns visible on most world markets two weeks ago have been overshadowed for the time being and it looks like that this could be the new start of a fresh up-move.
I AM NOT CONVINCED AND THIS COULD BE A FALSE BREAK-OUT. THE EXPECTED DOWNTREND WILL GET POSTPONED BY A FEW WEEKS. That’s all.
We are again at the mercy of FIIs and our further course will be charted by their Moneyflow.
CASTROL and INDRAPRASTHA GAS are two stocks which are currently in short and medium term UP-TREND. It may be worthwhile to make a new long position in either of the two.