Sunday, March 15, 2015

Correction Continues

As expected, the markets corrected about 3.2 pc for the week. The dreaded March correction has set in. Will it continue further or will the markets rise from here? Let us try and evaluate.

1. The Advance Tax payments are out of the way. Next week, the numbers of Advance Tax paid by the companies will start trickling out.

2. After this week, the year end NAV pumping will happen and the markets will start rising for it.

3. The markets have corrected about 488 points from the top. The markets will either bounce from somewhere around current levels or the correction may extend easily to over 1000 points.

4. With a correction of over 500 points in place, it is now time to start nibbling in. If the markets rise from here then it is good but even if they do not, if they fall further 500-600 points, one can easily buy 25-30 pc of intended buying quantity now safely.

5. No one can catch exact top or bottom, so if one starts buying at current levels and additional 10-15 pc at every drop of 100 points, then the price can safely be around 8200-8300 Nifty levels in the worst case scenario.

6. The Rate cuts are now ruled out for the time being and the bond yields have also gone back up to 7.8 pc. Around 8 pc or so, the Gilts will offer another entry point with a target of Gilts reaching 7.25 % by the year end.

7. Crude oil prices are again easing up. The Government has got a lot of money from the Coal and the spectrum auctions.

8. The Insurance Bill has been passed in both the houses of the Parliament.  This is the biggest reform of the Modi Government.

All in all, after a correction of about 500-700 points from the top, it would be a good time to buy Quality Stocks.

No comments:

Post a Comment