Sunday, December 27, 2015

Holiday Season is here

The truncated week saw the markets rising up. They rose 1.3 pc. The FIIs are on vacation and I expect the expiry week to sustain the gains. Let us look at the way ahead.

1. The markets saw a dip in the volumes towards the end of the week. The FII selling has stopped. This means expiry week will have a positive up trend to it.

2. The Modi PR overdrive means the market has 1 more cheer to go up in the near term. The markets will show some real movement only if it crosses 8300. A rally up to 8100 is normal and is expected.

3. The US Rate hike is behind us and the news heavy items we have put behind us. The next triggers for the markets to move up will come in the corporate earnings around 10th of Jan 2016.

4. The IPO market is kicking which money is floating around. I expect 1 more round of correction or it may have already ended. Value stocks are still cheap to buy.

5. 2016 will be the year of India. There will definitely 1 more rally which will take us to new highs. I will post my 2016 outlook sometime early next week. Please keep watching this space. Happy Holidays and a time to take it easy for the rest of the Year!!!

Technically, we will bounce from here, expiry will take the markets up but that need not mean the woes are behind us.

Keep adding strong stocks at correct valuations.

Sunday, December 20, 2015

Holiday Season beckons

The markets rose 2.2 pc for the week.The percentage rise rarely reflects the true picture. Let us see what can affect the markets in the coming week. We are now approaching the vacation period and the time for a significant move is coming.

1. The IPOs continue to suck out huge money from the market. NHAI IPO of Tax free binds will take out the HNI money. It is a very good tax saving tool for the HNIs and those in the higher tax slabs.

2. The money released from Dr Lal and Alkem IPOs is mostly likely  to find its way into Narayana Hrudayalaya IPO. The Retail money will not be available as the Indian love for making a quick buck in the IPO market continues.

3. The FIIs have sold 3800 crores wroth of stocks in Dec so far and the DIIs have bought about 4700 crores worth of stock.The markets have still corrected 2.2 pc for the month which means there is selling in the markets by the third pillar Retail and the HNIs.

4. The FIIs go on vacation very soon and the absence of FIIs means at least selling should not be there. There could be a short term rally but I see resistances at 8100 and then 8300.

5. The overall trend remains down and I see 7200 coming for sure. The overall India growth story remains strong and with Crude Oil and Commodities at multi year lows, the industries which use these raw materials will perform strongly over the long term.

6. We are now 9 days away from the expiry and with most people bearish, the operators can induce a false hope rally manipulating the Nifty. It does not take too much to take the Nifty up by 300-400 points.

7. The Cash stocks are moving up and the Value stocks are hitting fresh lows.

All in all, I feel we are on the cusp of something big and now is the time  to be in Equity, with buy on every dip. Value stocks which will appreciate over the next 3-5 years.

Sunday, December 13, 2015

Time to Buy is Here

The markets fell down 2.2 pc for the week to close near the low point of the week and the time to buy stocks is here now. There are several reasons for this and I can see very good reasons to buy stocks right now.

1. The FIIs continue selling and that pillar is not there yet to support the markets. The markets functions on 3 pillars FIIs, DIIs and the Retail which includes the HNIs.The DIIs have purchased stocks worth Rs 1270 crores vis a vis the FIIs selling 3500 crores. The third pillar retail will now get busy saving in tax saving instruments.

2. The IRFC IPO sucked out 4000 crores from the market, NHAI issue is worth 10000 crores hitting the marktes, the equity IPOs of Alkem, PathLabs and many more coming up. All this money is pulled out from the equity markets and locked into these instruments.

3. Even though the Nifty is at 7600, the Value stocks are at much lower levels. The next few weeks will provide us with the best buying opportunity in times to come.

4. This week has the Fed Rate Meeting n 16th December 2015, then the passage of the GST bill to passage. All these are just reasons for the markets to rise or fall. The real reason is liquidity being sucked out of the markets.

5. The FIIs will go on vacation by this weekend. This will ease the selling pressure and may start a Santa Claus rally as the selling pressure will not be there. Also, the year end bonuses are calculated.

6. The Cash stocks have given loads of profit and the smart money locked in the profits in the bonds. No one has the patience these days to wait out for 5 or 10 years. These are the windows of Opportunity which one needs to exploit.

Suddenly, cash will find many suitors and equity on the face of it will no longer be appealing but this indeed is the best of times to buy stocks only if you are prepared to see your stocks go down 20-25 pc from here also.

We are at 7600 but for value stocks we have already reached 7200.

Sunday, December 6, 2015

GST to dicate the trend next week

The markets lost about 2 pc to fall down to 7781. The markets are poised at very critical levels with 7700 being the key support levels. Let us see where the markets can go from here.

1. The GST bill has there has to be some headway in the coming week. With the FED meeting poised for 16th December, a movement forward on the GST has the potential to take the markets forward.

2. The key resistance for the markets comes to about 8100. It needs to clear 8100 to make some headway. The next Resistance would be 8400.

3. The markets as per Elliot should touch 7200 or 6800. TA is a an art and not a perfect science. The numbers may not be exactly hit but the trend is usually correct.

4. FIIs continue to sell and that is what points to the markets being lower.

5. In 2009 and 2011, the markets had hit a bottom in December and rallied. There is always the November Feb rally which takes place.

6. Gold prices have hit a nice bottom. I would start accumulating for the long term.

7. The cash stocks have rallied and the Value based stocks are giving a good entry point. I am churning the portfolio.

All in all, it is a very calm Sunday before action packed 2 weekends of GST, Fed Rate hike and lot of news flow based events. Usually, it is a sell on news kind of market.