morning thoughts...
Once again the markets traded strong and as said and expected continued its journey upwards.
Technically the trend hasnt been compromised yet but calls for volatility and consolidation
However,Not a day goes by when there isn't a news item talking about how rosy the future of Indian stock market looks. Take for instance this article in a leading business daily. Its headline reads that India's stock markets can easily double over the next 3-4 years. Well, if you ask us, this is well within the realms of possibility. Even if the PE multiples don't expand from here, all it will need for the markets to double say in the next four years is earnings growth of around 18%-19% per year. And given how profit margins have been at a low in recent years, a small expansion here will take us to our Sensex target.
Extrapolating still further, a level of 1,00,000 on the Sensex in the next 10 years also looks quite likely. After all, a sustained earnings growth of 15% over the next 10 years is certainly possible. Therefore, if one hasn't invested in the markets one can certainly go ahead and take the plunge provided a strictly long term view is taken. But will all stocks benefit from this trend? Perhaps not. Only the ones with the required management depth and a strong business model will be able to capitalise on the trend we believe.
US$ 2 bn or Rs 120 bn every month. That is the kind of fresh investment Indian markets need to sustain the current rally. Thus, investors who are hoping that the current stock market rally will sustain, they should ask themselves if this kind of an assumption is realistic. An analysis of data from the past several months shows the constant pumping of funds by FIIs at such a massive scale has been the fuel for markets. The rally in August saw FIIs withdrawing and mutual funds staging the rescue act. Thus domestic investors have the proverbial double edged sword hanging over them, if they go overboard with stock investments at the current stage. Investing in expensive stocks at the last leg of the rally could be very risky if the FIIs stage a major withdrawal. Domestic funds can make up for them only to an extent. Secondly, if the fundamentals of the companies fail to live up to the expectations, correction in valuations is a given. Thus, without blindly buying into Sensex projections, investors would do well to assess their stock investments selectively.
Astrologically jupiter out of combustion and change of mars in scorpio will bring surprises in coming sessions.
Coming to the commodity markets bullions looks volatile and range bound , whereas base metals and energy looks strong and remains a buy on dips
www.astroeyes.blogspot.in
Yesterdays calls sent
Gold Mcx - sell at cmp 27335 sl 27390 targets 27150 - booked profits at 27215
Silver Mcx - sell at cmp 41990 sl 42100 targets 41750 - booked profits at 41810
Natural gas Mcx - buy at cmp 231 sl 229 targets 237 - booked profits at 235
Nifty - buy at cmp 8145 sl 8130 targets 8200 - booked profits at 8195
Bank Nifty - buy at cmp 16120 sl 16078 targets 16300 - booked profits at 16277
Double Bumper Hexaware 180 ca - buy at cmp 3.50 sl 2.65 targets 7.50 - booked profits at 7
Fii Ceat - booked profits at 770 - long from 630
Hpcl 460 ca - booked profits at 43 - long from 25
Nifty 8200 ca - booked profits at 72 - long from 38
Dlf - sell at cmp 174 sl 176 targets 167 - hit stoploss
Allahabad bank - sell at cmp 117 sl 118 targets 114 - hit stoploss
Once again the markets traded strong and as said and expected continued its journey upwards.
Technically the trend hasnt been compromised yet but calls for volatility and consolidation
However,Not a day goes by when there isn't a news item talking about how rosy the future of Indian stock market looks. Take for instance this article in a leading business daily. Its headline reads that India's stock markets can easily double over the next 3-4 years. Well, if you ask us, this is well within the realms of possibility. Even if the PE multiples don't expand from here, all it will need for the markets to double say in the next four years is earnings growth of around 18%-19% per year. And given how profit margins have been at a low in recent years, a small expansion here will take us to our Sensex target.
Extrapolating still further, a level of 1,00,000 on the Sensex in the next 10 years also looks quite likely. After all, a sustained earnings growth of 15% over the next 10 years is certainly possible. Therefore, if one hasn't invested in the markets one can certainly go ahead and take the plunge provided a strictly long term view is taken. But will all stocks benefit from this trend? Perhaps not. Only the ones with the required management depth and a strong business model will be able to capitalise on the trend we believe.
US$ 2 bn or Rs 120 bn every month. That is the kind of fresh investment Indian markets need to sustain the current rally. Thus, investors who are hoping that the current stock market rally will sustain, they should ask themselves if this kind of an assumption is realistic. An analysis of data from the past several months shows the constant pumping of funds by FIIs at such a massive scale has been the fuel for markets. The rally in August saw FIIs withdrawing and mutual funds staging the rescue act. Thus domestic investors have the proverbial double edged sword hanging over them, if they go overboard with stock investments at the current stage. Investing in expensive stocks at the last leg of the rally could be very risky if the FIIs stage a major withdrawal. Domestic funds can make up for them only to an extent. Secondly, if the fundamentals of the companies fail to live up to the expectations, correction in valuations is a given. Thus, without blindly buying into Sensex projections, investors would do well to assess their stock investments selectively.
Astrologically jupiter out of combustion and change of mars in scorpio will bring surprises in coming sessions.
Coming to the commodity markets bullions looks volatile and range bound , whereas base metals and energy looks strong and remains a buy on dips
www.astroeyes.blogspot.in
Yesterdays calls sent
Gold Mcx - sell at cmp 27335 sl 27390 targets 27150 - booked profits at 27215
Silver Mcx - sell at cmp 41990 sl 42100 targets 41750 - booked profits at 41810
Natural gas Mcx - buy at cmp 231 sl 229 targets 237 - booked profits at 235
Nifty - buy at cmp 8145 sl 8130 targets 8200 - booked profits at 8195
Bank Nifty - buy at cmp 16120 sl 16078 targets 16300 - booked profits at 16277
Double Bumper Hexaware 180 ca - buy at cmp 3.50 sl 2.65 targets 7.50 - booked profits at 7
Fii Ceat - booked profits at 770 - long from 630
Hpcl 460 ca - booked profits at 43 - long from 25
Nifty 8200 ca - booked profits at 72 - long from 38
Dlf - sell at cmp 174 sl 176 targets 167 - hit stoploss
Allahabad bank - sell at cmp 117 sl 118 targets 114 - hit stoploss
