I cant see todays bounceback any other way.
The stocks that had fallen the most - banks, realties - bounced up today.
Pharma kept leading up - Ranbaxy news showed up - which is very interesting and too much for a newbie like me to fathom. I own a lot of ranbaxy.
Too many people had told me that oil has topped - i dont like that view, yeah - that means - we are definitely in a bear mkt. Retail cant get it right so much on a top. :)
It will top someday soon - maybe another $10 single day gain will kill the rally.
My PMS - ASK and Religare - relationship managers told me that we are going to go up. No ways guys! I have asked for full redemption from ASK PMS now and not just the 70% cash I had there so far.
The bounce got perfect resistance at 4530-4550 - this area was a major support area and not being able to break it tells me bad things lie ahead.
More news have followed - RBI hiked repo rate ahead of scheduled meeting. Oil is back up 5$, so much for calling it a top. US indices are down 1.5%.
All this implies gap down and horrible day ahead. Looking forward to IIP data on thursday and Inflation data on friday - if we do bounce, and if we can break 4550 - highly unlikely with a gap down, we will meet resistance at 4620 and then at 4730. HIGHLY doubt the current rally to go past it.
Downside - I expect 4200 very soon - maybe even tomorrow or friday. Sorry for being such a sadistic guy, but too many people think they are smarter than the market and can ride agianst the trend. That is risky and injurious to your financial health.
The gap down will do no good to my order of redemption in ASK PMS, but I am going to force them to sell since they expect the "growth" folio of P/E of 4 (its not 4, but thats what they told me) to go up by 60% - ridiculuous!
I was going through a lot of charts and 90% (subjective ratio) of them are in horrible shape.
Short term target: 4200.
Intermediate term target: 4000 and then 3800-3850
Long term: 3500.
Wednesday, June 11, 2008
Monday, June 9, 2008
Jan and March lows broken! Mayhem!!!
US market tanked 3% on friday and euphoria set in over indian markets.
Views:
short-term: bearish, but expect (and hoping for) a small bounce back to 4650-4720 range.
intermediate-term: bearish, likely target 4000 in 1 month.
long-term: bearish, likely target 3500 (+/- 100) in 3-4 months.
Gold: bullish: might reach all time highs soon.
Oil: bull run is on, but looks toppy. may set in a climax top soon - this is not a level to enter long.
Sectors:
IT: I was very surprised to see NSE IT index down by 4%+. IT stocks were outperforming so far, but today profit-booking seemed to have happened. hoping for consolidation in IT, while the main indices fall further.
Pharma: bullish action continues.
FMCG:
Banks: Still bearish, but it seems banks are not falling much any more. They used to fall more than the indices, but have shown some resilience now - keep watching.
Oil: still bullish, but this might looks like it might top out anytime soon. It maybe that oil group continues its bullish run since too many people are also calling for a top here.
Realty: definitely bearish. infact, its so bearish that its not even giving a chance to short again after i covered my shorts mid last week. Damn!
Sectors to start tracking for me: Auto, Construction, Cement, Metals, Infrastructure sector overall
Stocks showing surprise dramatic weakness: IDFC
Disclaimer: I am 75% invested in debt and 25% in equity - my equity folio has not been modified yet to be overweight in the sectors on which my view is overweight on. Still learning!
Views:
short-term: bearish, but expect (and hoping for) a small bounce back to 4650-4720 range.
intermediate-term: bearish, likely target 4000 in 1 month.
long-term: bearish, likely target 3500 (+/- 100) in 3-4 months.
Gold: bullish: might reach all time highs soon.
Oil: bull run is on, but looks toppy. may set in a climax top soon - this is not a level to enter long.
Sectors:
IT: I was very surprised to see NSE IT index down by 4%+. IT stocks were outperforming so far, but today profit-booking seemed to have happened. hoping for consolidation in IT, while the main indices fall further.
Pharma: bullish action continues.
FMCG:
Banks: Still bearish, but it seems banks are not falling much any more. They used to fall more than the indices, but have shown some resilience now - keep watching.
Oil: still bullish, but this might looks like it might top out anytime soon. It maybe that oil group continues its bullish run since too many people are also calling for a top here.
Realty: definitely bearish. infact, its so bearish that its not even giving a chance to short again after i covered my shorts mid last week. Damn!
Sectors to start tracking for me: Auto, Construction, Cement, Metals, Infrastructure sector overall
Stocks showing surprise dramatic weakness: IDFC
Disclaimer: I am 75% invested in debt and 25% in equity - my equity folio has not been modified yet to be overweight in the sectors on which my view is overweight on. Still learning!
Friday, June 6, 2008
Bullish Reversals on thursday and follow through couldnt last long
Thursday's late rally in Indian stocks had me believe for a while that the previous lows of 4500-4550 nifty will provide some strong support and the downside will halt temporarily.
In addition, the follow through day in US S&P600 tempted me to think there is a glitter of hope in the markets.
However, in just 24 hours, both markets failed miserably and proved again how the best strategy in a bear market is 1) to be in cash and 2) to NOT cut the shorts too soon and not do any LONGs. It also proved how the 200 day averages are very strong resistances for the market indices and stocks.
I had cut most of my shorts yesterday seeing the powerful short-covering rally end-of-day - in DLF, HDIL, Kotak, REL, RELCAP and I was quite sad today to see the hammering they got again today - the sadder thing would be I don't get a chance to short these again at those levels.
The only bullish signs are: extremely high short interest ratios and advisory reports, supposedly high cash levels in investors in US. (not 100% sure about these things either!)
I think the US follow through has been nullified by todays BIG downturn.
My view on OIL and GOLD (based on the support they were getting at lower levels) has proved out to be damn accurate - as in 36 hours, OIL is $15 up and GOLD is $25-$30 up. I wish I had acted on my views more boldly.
For Indian market - I still think 4450-4550 nifty range will not be breached in a hurry - primarily since most advisors and people believe that they will break and lot of people are short already (I have no indicators, so this is just my view!). A rally to 4730 and maybe (small possibility) even 4820 might happen next week. This could be due to gains in OIL stocks, IT stocks and Pharma stocks - along with possible bounces in heavily oversold sectors of realties and banks. Playing for this bounce will however be very difficult and not advisable.
It would be better, instead, to let the market rally and accumulate shorting positions.
Outperforming groups: IT, Pharma, Chemicals
Underperforming groups: Realties, PSU Banks, Private Banks,
Long-Term view: bearish
Intermediate-Term: bearish
Short-Term: neutral to bearish
In addition, the follow through day in US S&P600 tempted me to think there is a glitter of hope in the markets.
However, in just 24 hours, both markets failed miserably and proved again how the best strategy in a bear market is 1) to be in cash and 2) to NOT cut the shorts too soon and not do any LONGs. It also proved how the 200 day averages are very strong resistances for the market indices and stocks.
I had cut most of my shorts yesterday seeing the powerful short-covering rally end-of-day - in DLF, HDIL, Kotak, REL, RELCAP and I was quite sad today to see the hammering they got again today - the sadder thing would be I don't get a chance to short these again at those levels.
The only bullish signs are: extremely high short interest ratios and advisory reports, supposedly high cash levels in investors in US. (not 100% sure about these things either!)
I think the US follow through has been nullified by todays BIG downturn.
My view on OIL and GOLD (based on the support they were getting at lower levels) has proved out to be damn accurate - as in 36 hours, OIL is $15 up and GOLD is $25-$30 up. I wish I had acted on my views more boldly.
For Indian market - I still think 4450-4550 nifty range will not be breached in a hurry - primarily since most advisors and people believe that they will break and lot of people are short already (I have no indicators, so this is just my view!). A rally to 4730 and maybe (small possibility) even 4820 might happen next week. This could be due to gains in OIL stocks, IT stocks and Pharma stocks - along with possible bounces in heavily oversold sectors of realties and banks. Playing for this bounce will however be very difficult and not advisable.
It would be better, instead, to let the market rally and accumulate shorting positions.
Outperforming groups: IT, Pharma, Chemicals
Underperforming groups: Realties, PSU Banks, Private Banks,
Long-Term view: bearish
Intermediate-Term: bearish
Short-Term: neutral to bearish
Thursday, June 5, 2008
View on Market as on 5th June 2008
Today was quite an interesting day in the market - just like the past 10 odd sessions after the intermediate top.
Long Term view (6 months+) - bearish. Needs to break above 5250 and sustain above it for this to change.
Intermediate Term view (1 month) - bearish. Needs to break 4930 for this to change. Or it needs to consolidate in a tight range for few weeks. 4450-4500 support is the last hope here.
Short Term view (1 week) - neutral to mildly bullish. Today's action (5th June) has changed this from neutral to mildly bullish - primarily because we are in oversold region and with everyone talking of market reaching lower levels. Also the big players need to sell off their stuff - and for this they need to take the stocks up.
4550 nifty spot support.
View on Gold: Bullish.
Buy around 1200 levels or lower with 1165 as trading SL and 1090 as investing SL.
View on Oil: Neutral. The last run up was parabolic and toppy in nature. If it consolidates for a few days in a range, it might resume its upward journey again. Downside likely to be until $120 only.
View on Interest Rates: Definitely UP for India. With rate of inflation hovering in 8-10% range, RBI will have to hike the rates sooner than later. Just keeping them at the current value may not prove to be enough.
Long Term view (6 months+) - bearish. Needs to break above 5250 and sustain above it for this to change.
Intermediate Term view (1 month) - bearish. Needs to break 4930 for this to change. Or it needs to consolidate in a tight range for few weeks. 4450-4500 support is the last hope here.
Short Term view (1 week) - neutral to mildly bullish. Today's action (5th June) has changed this from neutral to mildly bullish - primarily because we are in oversold region and with everyone talking of market reaching lower levels. Also the big players need to sell off their stuff - and for this they need to take the stocks up.
4550 nifty spot support.
View on Gold: Bullish.
Buy around 1200 levels or lower with 1165 as trading SL and 1090 as investing SL.
View on Oil: Neutral. The last run up was parabolic and toppy in nature. If it consolidates for a few days in a range, it might resume its upward journey again. Downside likely to be until $120 only.
View on Interest Rates: Definitely UP for India. With rate of inflation hovering in 8-10% range, RBI will have to hike the rates sooner than later. Just keeping them at the current value may not prove to be enough.
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