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.


  1. With Nifty at 7800 as on 21 Dec 2015, do you still see 7200 and if yes, by when ?

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