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.

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