The Crash( 17.5.2006) and FII activities since then

[pkjha30]

Hi dada,
Is market will fall again? Because of following issues

1. BOJ unexpected intreset rate hike.
2. Reserve bank interest rate and FED next meeting for increasing the interest rate again.
3. Crude oil $78.
4. Inflation is increasing continuously.
4. FII are selling on every high. MF not buying.
5. volume is very very less. on less volume sensex and nifty going up.
6. opening of commodity market.( now investor money will be divided into commodity also). so less money in equity market.
7. Global factor (nikke and dow going down).
7. Cement price is going up.
8. commodity price will go up.

These -ve points are in my mind so i realize market is ready to fall again.

wrgrds
Ahmed

Hi Ahmed

In that case you should go for cement stocks and commodity stocks which would benefit.
If rupee ends weaker, software companies would gain. So go for infosys, tcs etc
If oil prices goes for cloud nine go for ongc reliance ,energy, HOEC ,may be Assam Company, as oil producer and exploration companies would benefit.

Retail sector is a developing story and it has nothing to do with BOJ or liquidity. When market is down you can catch early birds.

FMCG is already hyped up but great to catch HLL at lows.

Roads and infrastructure will grow as there is thrusts from Govt side.There is suppressed demand for that. So check if you can getLT or IVRCL or such other companies at bargain price.

I doubt if we will revisit lows formed earlier. But then you will find opportunities galore.


Pankaj

 

[pkjha30]

HI pankaj
i am really impressed by your understading of the market.
May god bless me with the same undrerstanding ...
AMEN

Best Regards
Coool.

Hi Coooool

Don't believe the words. Analyse for yourself. You have better insight into it then you think.

Markets have always seen ups and downs. The key is to protect your money, book your profit and identify opportunities well before others do it. If in trading follow the trend rather than going against the trend.

keep eyes on othe factors also including than what charts tell us. Sometimes they may give an early indication of what is happening.

BTW your contribution of COOLINTRA is appreciated.that's really coool!!!

Pankaj

 

[pkjha30]

Great efforts .
Keep it up .

Thanks

sachin

Hi sachin

Nice to see that you have visited this write up. For last two months it has been an effort to talk abt the market, which was a trend not in fashion.
Once mkt gets into trading mode it would be difficult to go into details as TA would take over the chart.

Pankaj

 

[pkjha30]

Hi

The week is dominated by oil and oil and more oil.
With oil ruling high at$78 and rate hike worries off the back of investors its again back to square one.

Israel extending its strikes well into this week there is no dign and sympotms of stopping this violence.

Iran has refursed the sale of gas at the rate demanded by India.Probably geopolitical pressure tectics on India Us Nuclear Cooperation and certain clauses mentioning Iran.

Inflation is not coming down so that may cause few rounds of fed rate hike. I think it may go up to 6% in three installments before decrease starts unless ofcourse US market collapses by 25% in a day leading Fed to take maket intervention operations.It might be a slow decline for US market.

The puzzle is when US return on equities will be low why investors would not fly to emerging markets for higher returns.The weakness is not related to US stock market alone. Its affecting all markets as the total impact of rising rates by various central banks would be to reduce liquidity in the system, reducing money even for development oriented projects, slowing consumer demads as savings would be more.People would flock to safer investment avenues, may be fixed deposits.The Central banks are hoping that it causes acceptable deflation of the highly inflated economies.

The problem with India is we are unable to inflate as much as China. Their growth is as much internal (development and consumption) as it is external(exports). So to say we are inflated economy would perhaps be a wrong statement.Indian economy has not yet reached the height where it would be called inflated on or cause any concerns in developed countries.

The contribution of our exports to world trade is somewhere around 1%. That's too insignificant. But our markets are lucrative as consumers have high taste for westerns things or good quality items , speaks english well and can generally be influenced by western culture.

Unlike China, where these foreign companies would be like sitting in a dark hole not much knowing language and generaly restricted movements to a few cities showcased for western worlds, India is a much bigger bet and also politically less risky. We are also unable to sell more to foreigners(exports) and are busy trumpeting our achievements rather than trying to achieve them. So as a market we are lucrative .There will be more imports .

Foriegn companies would keep coming to India for investment(along with China which has attracted bigger FDI). This will reduce pressure on margins for western companies. As infrastructure development takes place, indian market will further become easy to operate in. VC ,Planning Comm. has already hinted that even water could be privatised. What more commitment do we need to reform process. We are willing to privatise even essential items as our state is unable to provide for them.

The upshot of all the ramblings above is that if FDI flows keep up there may not be much of a problem on the growth of economy.The liquidity may be restricted but handfull of players would face no problems. By that I mean companies generally part of sensex and few of MID CAPs

As today market would respond to negative sentiments and starts lower , one must watch the game from the sidelines of the Roman arena .Victors are not yet decided. If history is any guide then it is always bull in the long term.But short term weakness will be seen as a part of consolidation.

Let us not miss the wood for trees.

Keep watch on your watch list.

Pankaj

 

[vinsu]

Very nice write up ,Pankaj , as always .. Always a delight to read your posts.
Your understanding of markets is good and of course you are a wonderful writer .
Wondering if you are a professional writer ..
Regards

 

[kuldeep49]

Pankaj,
As always, very well thought out & presented. Thank you, your comments help all of us.
Cheers
Kuldeep

 

[pkjha30]

Very nice write up ,Pankaj , as always .. Always a delight to read your posts.
Your understanding of markets is good and of course you are a wonderful writer .
Wondering if you are a professional writer ..
Regards

Hi vinsu

Traderji.com can do magical things to a member. Thanks for appreciating.

Well, I am not a professional writer but just putting my thoughts here. After I read again, I was horrified by typographical and punctuation omissions.I hope those reading would take it in their stride.

Its nobodies guess now to say that market will open lower and that it may drift down further. The question is shall we wait or invest? Whether there is any long term weaknesses?

The bottom of a river is not like a bed of rock but full of mud and sand and vision often gets clouded by debris moving around.There may be traps and opportunities both waiting around.So time to be carefull and check tour watch list( I am sure it would be ready by now) for any fundamental weaknesses in selected stocks. Avoid fundamentally weak stocks and news driven stocks and go for strong ones, when things settles.

That would be my advice.

Pankaj

 

[jraj]

Thanks Pankaj for all your excellent articles!

Jay Raj

 

[Saint]

Great going Pankaj for a fantastic 1000 posts..........looking fwd to the next 9000!

Saint

 

[Anupama Singh]

Great going Pankaj for a fantastic 1000 posts..........looking fwd to the next 9000!

Saint

Congrats,Pankaj!Thanks for all the excellent articles and posts!!

You are now a Super Senior with Saint and Amit.

Anu