The Indian Stock Market: Analysis of last month, & Planning for next….
My article as published in “Vyaapaar Samachar”-The Business Newspaper, few days back.
Analysis for Last Month; and Planning for Next
Dated 21st Oct 2018
It is said that; the festival of Vijaya Dashmi, signifies ultimate victory of good over evil, or say green over red and bull over bear? Will we see this victory in near term? Well, even if we do, there’s big damage caused till date. Yes, victory always comes at a cost, and the cost can well be in terms of time, patience as well as faith. Every good story/stock will turn positive one day, but a player has to ask him/herself: Do I have that kind of time, risk appetite and holding capacity? And then play accordingly.
In my article dated 21st Sept 2018, I had mentioned that if you are an investor and are in profits currently, it is wise to book it out for once. If you are an investor and looking for fresh entry, let me be blunt to say that there isn’t any such entry visible as of now. If you are a trader; then instead of seeking and searching for a bottom, start making money on short side. And today, a month later, we can see these things play out, well as planned. Now let’s plan for coming month.
Right now the market is making efforts to stay above 10300. The retracement on upside had faced resistance from levels of around 10700. Market will make all efforts to protect the recent lows of around 10150/10000. If this stays sustained; we may see a bounce on the upside. Instead of assuming it a bottom; shorter term players must treat that as a bounce and play accordingly. Never get trapped assuming it as a support meant to last forever. Market may not show Brexit and Rexit type of recovery this time, because there are many headwinds and are macro in nature, both local and global. Longer term players can build portfolio in parts. If recent lows fail to sustain it-self, then we shall move towards 9100 giving more shorting opportunities. There could be many levels between that provide support to prices, and one must book out and stay aside at those levels, to see what happens next. Longer term players can keep adding in parts at those intermediate support levels below 10K.
What is interesting is that; currently many scrips are quoting at the price level of 2016 and even 2014, when Nifty was at 7500 approx. Bajaj Auto, Eicher, ACC, AshokLey, Asian paints….What this indicates is that; the extent of damage is much deeper than what is shown by the main index. These kind of sharp corrections in individual names signal that one can watch quality names from those, and build positions in those slowly, and as per one’s own risk appetite.
But just because you are in for longer term doesn’t mean you will ignore risk. Even heaven helps only those, who help themselves. You must also remember that there are scrips like BoB and DLF that are also quoting at levels same as those in 2008/9 when Nifty was at 4500. Now tell me how wise is that? Risk control and capital preservation must apply to one and all. Period.
At this juncture, I recall that old song from the movie Gumrah: Woh afsana, jise anjaam tak, lana nah ho mumkin….usse ek khoobsurat modd dekar….choddna achcha…..Chalo ek bar fir se….
Any relationship that turns sour and goes to an extent of turning poisonous, should be steered clear from….whether it is your Share….or Sherni
What say? Aye…..Kya bolti tu????