The business channels and pink papers have been obsessive about high inflation in the Indian economy and the consequent rise in interest rates – and well they should be. The government doesn’t seem too perturbed about the deleterious effect that high inflation causes – not just to GDP growth, but also to the wallets of common citizens.
During such times, savings and investments may be farthest from people’s minds as they struggle to make both ends meet. However, there are some comparatively less risky investment opportunities that smart investors can avail of.
Continue Reading my guest post in Subhankar's blog:
http://investmentsfordummieslikeme.blogspot.com/2011/11/business-channels-and-pink-papers-have.html
Friday, November 18, 2011
Sunday, November 13, 2011
Gloom and Doom Ahead
If one goes by the headlines, there is doom and gloom ahead. Airlines are going bust, people are being laid off, bond yields have crossed 9 pc and Italy tethers on the brink of a collapse. Lets us look at things in detail and try and find a silver lining to the cloud.
1. For any medium term upside, 5390 - 5400 remains the key resistance. There are a confluence of resistances here. The previous high comes at 5399, the 200 DMA comes at 5390 as also the lines joining previous tops from 6339 comes at this value. Prudence suggests that one should not go long before 5400 is breached.
2. On the downside, fresh shorts could be taken below 5072 and 5011, the previous significant bottom. We are in some kind of consolidation move right now. This expiry is 9 trading sessions away and we wait and watch. In this series it is only the Option writers who have made money.
3. Fundamentally, Kingfisher is in trouble. The problem is not as simple as an airline going bust. It has a cascading effect. Several banks have a very high exposure to the airlines and their NPAs will go up. The Power sector also has NPAs rising and banks will be wary of lending to the power sector as well.
4. The government bonds are trading at an yield of almost 9 pc. The Repo Rate is at 8.5 pc and will raise further in the month of December. The high yields imply that government bond supply is not being absorbed by the market. In simple language, government is borrowing big time from the markets.
5. Gold is also trading in a range. The previous top needs to be taken out for investments to be made in gold. The rupee has breached the psychological Rs 50 mark. Weak rupee means the companies which import are in trouble. India is an economy which is a net importer and hence the fiscal deficit target of 4.6 % is not likely to be met.
6. With elections in the key states of UP and Punjab round the corner expect no fiscally prudent measures from the government at least till March 2012.
Now, is the time to start nibbling at stocks, systematically picking the good companies. Those interested in stocks and gold investment advice, there is Lakshmi's Cherry Picks available.
Finally, a tailpiece on Austerity in these tough times by Sanil Sonalkar.
Financial year 2011-12 has truly marked the dawn of a new era of austerity measures being adopted by countries worldwide, caught in the midst of a recession which seems to be spreading by the day. The developed world, particularly the USA & the Eurozone countries, are grappling with huge debts and failure to pay sovereign obligations is becoming a stark reality. To tide over the crisis, these countries are resorting to unprecedented austerity measures in a ferocious bid to salvage pride and credit ratings (no pun intended).
Back home, the common man is increasingly feeling the burden of high prices and household budgets have taken a hit like never before - austerity begins at home too. The government,
almost belatedly, has tried to offer some respite by increasing the interest rate on the popular savings schemes - PPF, NSC, etc, etc. This may seem too little, too late.
A judicious mix of savings and investments is the order of the day in these troubled times.
1. For any medium term upside, 5390 - 5400 remains the key resistance. There are a confluence of resistances here. The previous high comes at 5399, the 200 DMA comes at 5390 as also the lines joining previous tops from 6339 comes at this value. Prudence suggests that one should not go long before 5400 is breached.
2. On the downside, fresh shorts could be taken below 5072 and 5011, the previous significant bottom. We are in some kind of consolidation move right now. This expiry is 9 trading sessions away and we wait and watch. In this series it is only the Option writers who have made money.
3. Fundamentally, Kingfisher is in trouble. The problem is not as simple as an airline going bust. It has a cascading effect. Several banks have a very high exposure to the airlines and their NPAs will go up. The Power sector also has NPAs rising and banks will be wary of lending to the power sector as well.
4. The government bonds are trading at an yield of almost 9 pc. The Repo Rate is at 8.5 pc and will raise further in the month of December. The high yields imply that government bond supply is not being absorbed by the market. In simple language, government is borrowing big time from the markets.
5. Gold is also trading in a range. The previous top needs to be taken out for investments to be made in gold. The rupee has breached the psychological Rs 50 mark. Weak rupee means the companies which import are in trouble. India is an economy which is a net importer and hence the fiscal deficit target of 4.6 % is not likely to be met.
6. With elections in the key states of UP and Punjab round the corner expect no fiscally prudent measures from the government at least till March 2012.
Now, is the time to start nibbling at stocks, systematically picking the good companies. Those interested in stocks and gold investment advice, there is Lakshmi's Cherry Picks available.
Finally, a tailpiece on Austerity in these tough times by Sanil Sonalkar.
Financial year 2011-12 has truly marked the dawn of a new era of austerity measures being adopted by countries worldwide, caught in the midst of a recession which seems to be spreading by the day. The developed world, particularly the USA & the Eurozone countries, are grappling with huge debts and failure to pay sovereign obligations is becoming a stark reality. To tide over the crisis, these countries are resorting to unprecedented austerity measures in a ferocious bid to salvage pride and credit ratings (no pun intended).
Back home, the common man is increasingly feeling the burden of high prices and household budgets have taken a hit like never before - austerity begins at home too. The government,
almost belatedly, has tried to offer some respite by increasing the interest rate on the popular savings schemes - PPF, NSC, etc, etc. This may seem too little, too late.
A judicious mix of savings and investments is the order of the day in these troubled times.
Sunday, November 6, 2011
A Party at Crossroads
There comes a time in every individual's or a nation's life where they stand at crossroads. Similarly, the Congress party has come to a point where they are at a crossroad. The next 24 months will decide where the party goes, and consequently where India goes. Our stock markets will be a reflection of where India is headed to.
In 1998, Sonia Gandhi took over as the Congress President. The Congress Party was in shambles. The BJP was riding a wave of Vajpayee induced euphoria, the Congress tally was plunging and no one gave the party a chance. Under Sonia, the party was losing election after election and no one gave the Congress much of a chance. Elections in May 2004 shook the nation and also shook the stock markets when Congress with the Left Front support came to power.
Sonia's masterstroke was yet to come. She stepped out of the race for the Prime Minister when the seat of power was hers to take. In one swift move she took the wind out of the sails of all those baying for her foreign origins. Manmohan Singh, an apolitical person, world renowned economist and more importantly a person with no political power took over as PM.
UPA - 1 was all about reforms. The Right to Information bill, the NREGA and the Nuclear bill being passed. In May 2009, the Congress came back to power minus the baggage of the Left Front. With great expectations come great responsibilities. It has been downhill after that with scams breaking out, inflation pinching the pockets of the Aam Aadmi and Congress being bruised in the by-elections.
Now, the news is Rahul Gandhi will become the Congress President, the 6th member of the Nehru Gandhi family to take over the reins of India's most influential party.
We have the elections in Uttar Pradesh in early 2012. The Congress has tied up an alliance with Ajit Singh who is powerful in Western UP. The Congress may emerge as the kingmaker as there seems to be no clear winner in UP. The Samajwadi Party, BSP, BJP and the Congress seem more or less equally placed with Mayawati edging ahead at the moment.
The real test of Rahul Gandhi will come in 2014. The Congress at the present moment is badly placed and is vulnerable to a defeat.
It is a real possibility that Manmohan Singh would be replaced in early 2012 after the elections in Punjab and Uttar Pradesh are out of the way. The most likely candidates to replace him are Pranab Mukherjee and P Chidambaram. The joker in the pack is someone like Kamal Nath.
It makes very real sense to replace Manmohan Singh. The scams and inflation have taken a toll on his image. It will be almost 7.5 years of him being in power. Time to have some old wine in new bottle.
The 3 leaders mentioned above have the same characteristics of Manmohan Singh. None of them are mass based leader and can never pose a threat to the Gandhi family.
Rahul Gandhi taking over as Prime Minister is the Ace in the Congress Pack ad I do not think, they will deploy that so early in the game.
What happens if Congress does not win in 2014?
There can be 2 alternatives. A NDA coalition coming to be power led by someone like Nitesh Kumar who has the credibility for good governance or a hotch potch Third Front government riding on the crutches of the Congress Party. This would lead to a repeat of the uncertainty of 1996-1998 period where the markets went no where basically.
Sonia Gandhi has left her footprints on the sands of Indian Political history. Let us wait and watch what Rahul Gandhi does.
Now, we come to our markets. Keeping all this in mind, I do not see the markets running away anywhere in a hurry. The crystal ball will become clear only sometime in mid 2012- 2014 period.
Now is the time to pick up blue chip stocks at good valuations. Invest in companies which will do well, keep 2015 as the target in mind.
For those interested in a selection of good stocks, Lakshmi has a pretty good collection very reasonably priced. One may contact her for her Investment Cherry Picks.
In 1998, Sonia Gandhi took over as the Congress President. The Congress Party was in shambles. The BJP was riding a wave of Vajpayee induced euphoria, the Congress tally was plunging and no one gave the party a chance. Under Sonia, the party was losing election after election and no one gave the Congress much of a chance. Elections in May 2004 shook the nation and also shook the stock markets when Congress with the Left Front support came to power.
Sonia's masterstroke was yet to come. She stepped out of the race for the Prime Minister when the seat of power was hers to take. In one swift move she took the wind out of the sails of all those baying for her foreign origins. Manmohan Singh, an apolitical person, world renowned economist and more importantly a person with no political power took over as PM.
UPA - 1 was all about reforms. The Right to Information bill, the NREGA and the Nuclear bill being passed. In May 2009, the Congress came back to power minus the baggage of the Left Front. With great expectations come great responsibilities. It has been downhill after that with scams breaking out, inflation pinching the pockets of the Aam Aadmi and Congress being bruised in the by-elections.
Now, the news is Rahul Gandhi will become the Congress President, the 6th member of the Nehru Gandhi family to take over the reins of India's most influential party.
We have the elections in Uttar Pradesh in early 2012. The Congress has tied up an alliance with Ajit Singh who is powerful in Western UP. The Congress may emerge as the kingmaker as there seems to be no clear winner in UP. The Samajwadi Party, BSP, BJP and the Congress seem more or less equally placed with Mayawati edging ahead at the moment.
The real test of Rahul Gandhi will come in 2014. The Congress at the present moment is badly placed and is vulnerable to a defeat.
It is a real possibility that Manmohan Singh would be replaced in early 2012 after the elections in Punjab and Uttar Pradesh are out of the way. The most likely candidates to replace him are Pranab Mukherjee and P Chidambaram. The joker in the pack is someone like Kamal Nath.
It makes very real sense to replace Manmohan Singh. The scams and inflation have taken a toll on his image. It will be almost 7.5 years of him being in power. Time to have some old wine in new bottle.
The 3 leaders mentioned above have the same characteristics of Manmohan Singh. None of them are mass based leader and can never pose a threat to the Gandhi family.
Rahul Gandhi taking over as Prime Minister is the Ace in the Congress Pack ad I do not think, they will deploy that so early in the game.
What happens if Congress does not win in 2014?
There can be 2 alternatives. A NDA coalition coming to be power led by someone like Nitesh Kumar who has the credibility for good governance or a hotch potch Third Front government riding on the crutches of the Congress Party. This would lead to a repeat of the uncertainty of 1996-1998 period where the markets went no where basically.
Sonia Gandhi has left her footprints on the sands of Indian Political history. Let us wait and watch what Rahul Gandhi does.
Now, we come to our markets. Keeping all this in mind, I do not see the markets running away anywhere in a hurry. The crystal ball will become clear only sometime in mid 2012- 2014 period.
Now is the time to pick up blue chip stocks at good valuations. Invest in companies which will do well, keep 2015 as the target in mind.
For those interested in a selection of good stocks, Lakshmi has a pretty good collection very reasonably priced. One may contact her for her Investment Cherry Picks.
Sunday, October 30, 2011
Markets: Have they given a breakout?
It was a news filled truncated Diwali week. Diwali is over and now is the time to look ahead. Lets try and see what possible road the market takes ahead.
1. The RBI policy as expected hiked rates by 25 basis points. The fine print was that Savings Bank Interest Rates have been de-regulated. This has potential to erode the profit margins especially of large private banks. Yes Bank immediately offered 6 pc Interest rates on Savings Account. This is a drag on the private sector banks.
2. Europe crisis has been averted by the Private Banks taking a 50 pc haircut on their loans. If it was Greece alone, then crisis would have been averted. What happens when Italy and Spain default. Politically it is a master stroke by China. They have agreed to give funds but the first losses would be borne by the European governments. China's role as a World power has gone up several notches. This development heralds the shift of political power towards Asia. Earlier, China was an economic power, now political influence follows.
3. Our markets have filled the gap at 5350 - 5215 and this was broken by a gap up. This is also known as Island reversal provided there is follow up buying. We now run into a wall of resistances around 5400 - 5500 with 5470 being a key resistance on multiple parameters.
4. The crisis has not been solved, its only delayed. 5450-5500 also represents the trend line joining the tops from 6339. This should be taken out on a weekly basis, to herald a fresh bull market.
To Summarize, we are in a powerful bear market rally. Only a close above 5500 on a sustainable basis would foretell a fresh bull market. We are just 150 points away from a breakout. We wait and we watch on the sidelines.
For those interested in Stocks Picks and Gold, Lakshmi has her Investment Cherry Picks and Gold Rush on offer.
1. The RBI policy as expected hiked rates by 25 basis points. The fine print was that Savings Bank Interest Rates have been de-regulated. This has potential to erode the profit margins especially of large private banks. Yes Bank immediately offered 6 pc Interest rates on Savings Account. This is a drag on the private sector banks.
2. Europe crisis has been averted by the Private Banks taking a 50 pc haircut on their loans. If it was Greece alone, then crisis would have been averted. What happens when Italy and Spain default. Politically it is a master stroke by China. They have agreed to give funds but the first losses would be borne by the European governments. China's role as a World power has gone up several notches. This development heralds the shift of political power towards Asia. Earlier, China was an economic power, now political influence follows.
3. Our markets have filled the gap at 5350 - 5215 and this was broken by a gap up. This is also known as Island reversal provided there is follow up buying. We now run into a wall of resistances around 5400 - 5500 with 5470 being a key resistance on multiple parameters.
4. The crisis has not been solved, its only delayed. 5450-5500 also represents the trend line joining the tops from 6339. This should be taken out on a weekly basis, to herald a fresh bull market.
To Summarize, we are in a powerful bear market rally. Only a close above 5500 on a sustainable basis would foretell a fresh bull market. We are just 150 points away from a breakout. We wait and we watch on the sidelines.
For those interested in Stocks Picks and Gold, Lakshmi has her Investment Cherry Picks and Gold Rush on offer.
Wednesday, October 26, 2011
Diwali Musings
Today on the day of a new Mahurat it is time to take stock. In the last 1 year, the markets have gone down about 16 pc. What does the road ahead hold for us?
1. Now is the time to start building your portfolio gradually. Think with a horizon of 5-10 years and look for companies which will power the new economy, the new world order.
2. Once identified, start adding in installments. Every 200 points lower on Nifty say add 10 pc.
3. Look at locking in NCDs and fixed income instruments at the current high rates of interest.
4. Buy Gold strictly in dips or on breakout above previous highs.
Its important to come up with a financial plan and follow it to closure.
I came across this site Money Works 4 me
This site has several interesting things which i find are different from the other sites. It is an independent site only dedicated to stock research and has an interesting product Company X- Ray. Please do check it out.
For those interested in Stock Picks and Gold, do check out Lakshmi's offer. She may offer financial planning services on a selective basis too. Those interested can get in touch with her.
1. Now is the time to start building your portfolio gradually. Think with a horizon of 5-10 years and look for companies which will power the new economy, the new world order.
2. Once identified, start adding in installments. Every 200 points lower on Nifty say add 10 pc.
3. Look at locking in NCDs and fixed income instruments at the current high rates of interest.
4. Buy Gold strictly in dips or on breakout above previous highs.
Its important to come up with a financial plan and follow it to closure.
I came across this site Money Works 4 me
This site has several interesting things which i find are different from the other sites. It is an independent site only dedicated to stock research and has an interesting product Company X- Ray. Please do check it out.
For those interested in Stock Picks and Gold, do check out Lakshmi's offer. She may offer financial planning services on a selective basis too. Those interested can get in touch with her.
Sunday, October 23, 2011
Markets: The Week Ahead
It is a crucial week for the markets with the expiry on Tuesday and a curtailed trading week. TO complicate matters we have the RBI policy to boot on Tuesday. Let us see what the markets have to offer.
1. Expiry on Tuesday and RBI Credit policy on same day is potentially explosive cocktail. RBI should hike rates by 25 basis points. Anything less or more could trigger about 100 point moves on the Nifty.
2. The resistance of 5170 has held for 3 attempts now. Either we break it in the move or we tank to to test 4720. Above 5230, we can re-test the 5350-5400 zone.
3. If money is pumped in for Euro crisis and Greek gets a bailout, expect dollar index to go up, commodities to crash and gold to weaken in the short term.
4. One can look at investing in the Infrastructure Bonds of PFC covered in an earlier post.
5. The results are coming in and nothing spectacular to write home so far. The good results will be out and the ones declared later are usually nothing to write home about.
6. Infrastructure companies are bearing the brunt of the slowdown, like HCC and L&T.
I expect the markets to trade in a range in this truncated week. Have a safe, happy and prosperous Diwali.
Those interested in a package of Gold and Equity Picks investments can look at what Lakshmi has to offer.
Gold Rush and Investment Cherry Picks
1. Expiry on Tuesday and RBI Credit policy on same day is potentially explosive cocktail. RBI should hike rates by 25 basis points. Anything less or more could trigger about 100 point moves on the Nifty.
2. The resistance of 5170 has held for 3 attempts now. Either we break it in the move or we tank to to test 4720. Above 5230, we can re-test the 5350-5400 zone.
3. If money is pumped in for Euro crisis and Greek gets a bailout, expect dollar index to go up, commodities to crash and gold to weaken in the short term.
4. One can look at investing in the Infrastructure Bonds of PFC covered in an earlier post.
5. The results are coming in and nothing spectacular to write home so far. The good results will be out and the ones declared later are usually nothing to write home about.
6. Infrastructure companies are bearing the brunt of the slowdown, like HCC and L&T.
I expect the markets to trade in a range in this truncated week. Have a safe, happy and prosperous Diwali.
Those interested in a package of Gold and Equity Picks investments can look at what Lakshmi has to offer.
Gold Rush and Investment Cherry Picks
Thursday, October 20, 2011
Should one invest in Infrastructure Bonds
The season for tax saving is still some time away but it always pays to start soon. Infrastructure bonds is a new tax savings category introduced last year. Lets have a look at it. I had written a guest post for Subhankar's blog. It is accessible at:
Power Finance Infrastructure Bonds Review
Power Finance Infrastructure Bonds Review
Sunday, October 16, 2011
Markets: The Week Ahead
It was a rally on D-Street and the Nifty rallied about 5 pc to close the week at 5132. What will the coming week bring ahead. Will the rally continue or will it sputter. Let us try and find out.
1. The October Settlement is a truncated one. The expiry is happening on Tuesday, Oct 25th thanks to Diwali. This gives us about 7 sessions to expiry.
2. The RBI credit policy falls on Oct 25th. So, we will have action packed expiry this time. It will be like a lottery as a 100 point swings can happen.
3. The inflation is still not under control. I expect a 25 basis points hike the this policy meet.Interesting thing is that bond yields have moved significantly higher in the 8.7 - 8.8 pc band. This also implies that government borrowing is taking bond yields higher. Macros suggest a high interest regime to continue.
4. There are a slew of corporate results coming in this week. Usually the early results are the good ones. Reliance just about met expectations thanks to high refining margins,Infosys benefited from a weak rupee. The poorer results should come from the Banks (Treasury losses), Autos (poor sales) and Infrastructure companies.
5. The Nifty is moving towards the critical resistance of 5169 again. It has failed to move in past 2 attempts. After this we have the gaps from 5229 - 5331 to be closed. We are headed towards a cluster of resistances and it should be interesting to watch how the Nifty behaves at slightly higher levels.
6. This could be the 4th wave of C-3. refer earlier posts for exact wave counts. This wave can typically go up to 5350-5400 and then we have the last wave down which can last for 4 months.
7. The layoffs have started in financial institutions. The Petrol prices may be hiked again if the crude prices go up coupled with a weak rupee.
Do look at investing Infrastructure Bonds for tax savings. More in my guest post in Subhankar blog.
Tough times ahead and time to brace up.
Lakshmi has come up with a presentation on Gold to go with Equity Picks. I have helped her prepare both.
I am enclosing the link to her offer. I feel its a very attractive offer.
The Gold Rush starring Lakshmi Ramachandran
1. The October Settlement is a truncated one. The expiry is happening on Tuesday, Oct 25th thanks to Diwali. This gives us about 7 sessions to expiry.
2. The RBI credit policy falls on Oct 25th. So, we will have action packed expiry this time. It will be like a lottery as a 100 point swings can happen.
3. The inflation is still not under control. I expect a 25 basis points hike the this policy meet.Interesting thing is that bond yields have moved significantly higher in the 8.7 - 8.8 pc band. This also implies that government borrowing is taking bond yields higher. Macros suggest a high interest regime to continue.
4. There are a slew of corporate results coming in this week. Usually the early results are the good ones. Reliance just about met expectations thanks to high refining margins,Infosys benefited from a weak rupee. The poorer results should come from the Banks (Treasury losses), Autos (poor sales) and Infrastructure companies.
5. The Nifty is moving towards the critical resistance of 5169 again. It has failed to move in past 2 attempts. After this we have the gaps from 5229 - 5331 to be closed. We are headed towards a cluster of resistances and it should be interesting to watch how the Nifty behaves at slightly higher levels.
6. This could be the 4th wave of C-3. refer earlier posts for exact wave counts. This wave can typically go up to 5350-5400 and then we have the last wave down which can last for 4 months.
7. The layoffs have started in financial institutions. The Petrol prices may be hiked again if the crude prices go up coupled with a weak rupee.
Do look at investing Infrastructure Bonds for tax savings. More in my guest post in Subhankar blog.
Tough times ahead and time to brace up.
Lakshmi has come up with a presentation on Gold to go with Equity Picks. I have helped her prepare both.
I am enclosing the link to her offer. I feel its a very attractive offer.
The Gold Rush starring Lakshmi Ramachandran
Thursday, October 6, 2011
Double Top
We hit the tops at 6357 in January 2008 and 6339 in November 2010. The support levels cam at around 5100 which have decisively broken giving a target of 3700 to 3900 range.
Time elapsed between 2 peaks is 32 months, so it may be another 32 months from November 2010, which comes to June 2013 that we cross 6350 again. It could also mean the Bear Market could last 32 months out of which 11 months have elapsed. This is same scenario as 1992-2000 where the market was stuck in a range.
For those interested in stock picking in the downturn, I am enclosing the link of Lakshmi.
She has come up with the updates for the month of October 2011. I have helped in identifying the stocks on the basis of fundamentals.
Investment Cherry Picks for the downturn
Time elapsed between 2 peaks is 32 months, so it may be another 32 months from November 2010, which comes to June 2013 that we cross 6350 again. It could also mean the Bear Market could last 32 months out of which 11 months have elapsed. This is same scenario as 1992-2000 where the market was stuck in a range.
For those interested in stock picking in the downturn, I am enclosing the link of Lakshmi.
She has come up with the updates for the month of October 2011. I have helped in identifying the stocks on the basis of fundamentals.
Investment Cherry Picks for the downturn
Sunday, October 2, 2011
Where does one hide now?
The last quarter has been bad for the equity markets. The Government borrowing is going through the roof and Gold prices are declining. What does an Investor do next? Lets try and work out the best investment avenues.
1. The Goverment has ended borrowing about 66 pc of their full year target in the first 6 months. This means in H2, they will borrow more. This means Rates will go up and Bonds yields have risen. Gilt funds will still have to wait for sometime or one can do a SIP in Gilt funds. Interest Rates are yet to peak out.
2. The US Dollar is strengthening due to safe haven status. This means all other currencies will weaken against the Dollar. The rupee may go down further and all commodities including Gold can correct 10 pc more. So, buying Gold doesnt make too much sense right now.
3. The Equity markets have been going down. There is fear and panic everywhere. Support levels are 4538, 4300, 4000 and 3700. One can start adding near each support level about 20 pc quantity.
4. Other Option is to invest in liquid funds or stay in cash. The inflation will eat away the value of Cash and liquid funds may give up 7-8 pc.
5. In the long term, if India has to do well, then the Equity markets have to do well. As Warren Buffet says, when markets fall the environment is so bad that no one ends up buying anything. Now is the time to build the future and start investing for the next 5 year horizon. SIP in Stocks which are of good quality.
The Nifty has support around 4900, 4840, 4720 and then 4538. upside resistance is the band of 5030 and a cluster of resistances around 5100 and 5200. Fresh shorts below 4840 and longs above 5169.
For those interested in stock picking in the downturn, I am enclosing the link of Lakshmi.
She has come up with the updates for the month of October 2011. I have helped in identifying the stocks on the basis of fundamentals.
Investment Cherry Picks
1. The Goverment has ended borrowing about 66 pc of their full year target in the first 6 months. This means in H2, they will borrow more. This means Rates will go up and Bonds yields have risen. Gilt funds will still have to wait for sometime or one can do a SIP in Gilt funds. Interest Rates are yet to peak out.
2. The US Dollar is strengthening due to safe haven status. This means all other currencies will weaken against the Dollar. The rupee may go down further and all commodities including Gold can correct 10 pc more. So, buying Gold doesnt make too much sense right now.
3. The Equity markets have been going down. There is fear and panic everywhere. Support levels are 4538, 4300, 4000 and 3700. One can start adding near each support level about 20 pc quantity.
4. Other Option is to invest in liquid funds or stay in cash. The inflation will eat away the value of Cash and liquid funds may give up 7-8 pc.
5. In the long term, if India has to do well, then the Equity markets have to do well. As Warren Buffet says, when markets fall the environment is so bad that no one ends up buying anything. Now is the time to build the future and start investing for the next 5 year horizon. SIP in Stocks which are of good quality.
The Nifty has support around 4900, 4840, 4720 and then 4538. upside resistance is the band of 5030 and a cluster of resistances around 5100 and 5200. Fresh shorts below 4840 and longs above 5169.
For those interested in stock picking in the downturn, I am enclosing the link of Lakshmi.
She has come up with the updates for the month of October 2011. I have helped in identifying the stocks on the basis of fundamentals.
Investment Cherry Picks
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