In March when markets trading at I came with my views that markets are going to test the year lows but most of the boarders not willing accept the report. But the markets gone in the same direction as I expected most importantly for the reasons what I mentioned. Now, it is the time to re-think about the fundamentals which might affect in markets in the upcoming months.
Please go through the past thread at here or at my home page:
Posted by: Be and Make on (04-Apr-08 11:13 )
dear kI - The most succesful person and i admire to your intelectual powers. I strongly believe in the short term (in this month), market will test the 14000+ level.There is no such 'positive news' for the market in the near-term even evaluating ourselves, basing the following points:
1. Industrial growth slows - down
2. Inflation is at 6month high
3.Raising Crude prices
4.Drop in GDP growth
5.Budget favored to public not to the market
6.US recession signals
7.FIIs turning net sellers in Markets (inc. India) till now in this year.
8.Govt to face elections within a year, means subsidies cost will grow.
9.Raising rupee hitting the exporters
10.Nuclear deal in the bumpy road
The following will be the triggers for the market:
1.Quarterly results may be below the expected.
2.New problem in the pregnant stage i.e., Mid-term elections issue to be born in the near term
KINDLY SHARE YOUR VIEWS
with thanks
be and make
As I expected markets gone down and dropped below the 4000 level.
1. What do right now?
2. Is it is the time to invest or to go short?
3. At what point markets will get support?
4. At what time markets starts bouncing?
5. Up to what level it may go up if such bounce happens?
These are the immediate questions that we are facing right now. For to answer these questions I will made a attempt to analyze the things which change from the march to till now.
Out of my above said points for the market grinding Inflation, rising in crude
FIIs hugely dumping (liquidity) are the major concerns right now.
Drop in Industrial growth, GDP are been rightly digested the market right now. Finally rise in rupee and improvement in chances for Nuke deal are the positive signals right now.
Case no.1: Bear markets are generally gets trend reversal around the 50% fall from its peak; if we consider our peak then it is around the 11200.
Case no.2: Whenever dividend yield of the broader indices reaches around 3% markets starts rallying means from here we may wish to see another 10-15% fall. For this either companies should post good numbers or the prices should fall.(In my sense earlier may not possible in the near term so prices should fall another 10-15% from the current level)
Case no.3: FIIs should march towards Emerging markets like india. I don’t think so, In the near term they may not push much money to India. They are facing their own problems at their home, so whenever any problem arises in the parent company it starts to get the support from its subsidiaries in the same passion FIIs are selling hugely in Ems to survive at their home. Means in the near term they may not pump the money as they done from last couple of years.
So, we are in a time based correction, which will sustain another three months and fall of 10-15% from the current levels. But, any fundamental change happen in the above discussed then markets suddenly change the direction suddenly and sharply. We may have another 10-15% cut from here means very less down side risk, when compared with the chances of potential upside if viewed for 12-18 month.
So, I conclude this issue by saying that we are going to see some dip in stock prices from here and is the great chance to buy.
With thanks
Be and make
K a l y a n
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