Nifty levels to watch

Hi PK

I have no doubt about the Nifty going up. But the bone of contention is that whether we can steer clear of the influence of FII and world economies or not. With the FII holding is almost 27% of the nifty capitalization their influence is not going to vanish all of a sudden just because we go through a correction.. The FII play the market with their perception of the emerging markets, the economic status of the developed countries etc. Moreover the stock markets are highly influenced by the commodity market as evidenced by the recent crash of metal prices. The commodity prices are tightly interlinked with the global markets. So we cannot insulate our market from global economic status in the foreseeable future. If we want to see that happen in the current conditions we have to have a closed economy, which is impossible now.

Nothing but Stone Cold logic, I suppose. Hindsight .. in other words.. perception after the fact is very easy in market analysis. Foresight, perception or insight of the future is the difficult thing. If that was easy we would not be discussing so much and this forum may not exist.

I too wish that our markets could stand on their own and there is no external influence what so ever. But if wishes were horses beggars would ride…

One thing is for sure,when we will start making new highs,we might see corrections setting in,in other markets.Lets see.

Dear All,

I need your openion on Nifty opening price?? How the index can open at 100 points variation from the closing price?? It happens some time only ofcourse...but still I do not understand how & why??

(I have been in share market for about 2 years. Recently I have started looking at Futures & options very closely. Since then I start to look at Nifty index very closely.)

Best Regards
Suresh

Pankaj
With respect , I think you are over emphasising the FII factor.... to the point of a growing obsession

Granted that FIIs can steer the market generally, but I feel we should look more at the underlying factors which make them buy (when they do) and sell (when they do)

What inherently determines major market trends ... we all know ... is anticipated trends in corporate earnings, a vital pillar of FA

Let's also not forget that it is Fundamental factors/expectations that drive and shape Technical trends/patterns/stats. So maybe in this forum we should debate a little more on the reasons why (for example) SBI/TISCO showed declines in their last quarter earnings and what are the implications for them (and in turn for the market) in the quarters/years ahead. Perhaps that may give some (even if remotely possible) clues to why some FIIs may have started exiting India April onwards

Do I make sense ?

AGILENT

Hi Agilent

At least you talked about fundamental parameters which drive the share prices in the long run. That is the reason I say it will go up in most of the cases where development is taking place.

Fundamentals do not change overnight. Like one fine morning we decide that this company is no good and then dump the shares.I am seeing many concerns which are essentially same for many years now and we will have to live with it and grow or wither with it.
inflation,oil prices liquidity etc.

If you see the graph of sensex role of FII since 2003, stated to be start of bull run becomes clear.As long as there will be limited participation from reatil, I mean depth of the market and also perfunctory regulations, FIIs with money power will have hold. NO doubt they will look at the Fundamentals before investing long before we realise the potential. Also they will exit seeing the signs of trouble long before we do. Individuals have very limited access to informations. Sometime they don't know from where to get all the informations. jdm asked to find FII action is other markets and I found it quite tough and still scouring the net.So imagine what others have to face. Further not all have knowledge of Technical parameters and they depend on what others analyse and say. TIPS is byproduct of such inadequacies.
So if FIIs exit a counter and if we come to know do you think it would be worthwhile to stay invested. In many cases it may not be.

But these are not the issue at present. The issue is when there is nothing which changed on FA why prices drop suddenly. It is just because FIIs sell so much so quickly.There are host of other issues involved while appraising specific companies in relation to prices. And I mentioned abt two types of FIIs. That is a point worth considering. Why nomura finds market overvalued at 8500 yet quitely enters the market and then drives up its prices and equally quitely exits saying its fair value is 7600. Well at least their action had nothing to do with fundamentals but everything with price manipulations.


People are familiar with small brokers and operators who drive prices up and trap retail investors and them leave them high and dry. Do you know how many counters are actively traded. What is the average volume of trading in large numbers of counters traded on bse. Some FIIs did it on large scale.

Pankaj

One more thing to add

There are obviously many factors in analysing a situation. I have just pointed out one of them but without underestimating or undermining other factors. The holistic view will emerge only after a debate on all aspect takes place,the reason why I urged amitbe to continue posting.Others also as it is good for members.I suggest you start a discussion on fundamental aspects. May be nkp and supratik and karthik can do it again to explain why prices are justified in April and not so after 12th May .What changed so much fundamentally that drove many poor investors to despair.

hai pankaj, the primary objective of any fund is to make money, FII's particularly want to make a lot of money, at the expense of the Indian Investor.In a stock market , for every money earned, there will be a loser. But why is it that the indian investor is always a loser?.all of know that fundamentally indian companies are doing really well.but are'nt the valuations really stretched?. How did the finance minister allow our mutual funds(LIC/UTI) to invest when the markets where falling. was that intervention necessary.Is'nt it a scam when our funds where buying at high rates. if they had not bought, then the fall would have been steep and our mutual funds could have entered at low rates and trapped FII's. it is certainly a scam at the poor man's expense.Most of the small investor's had exposer through mutual funds and now see the NAV's.Compared with rise of sensex after fall, NAV's will take long time to recover. Only God can save Indian markets. When the ADR's were being quoted at premium , Economic Times will splash a headline that INFY in USA is at premium.But when it is at Discount, the news is not published. Will SEBI probe the investments of Economic Times in Indian Stock markets?.( Substitute 'Economic Times' with TV channels and other Business publications).
bye
ravi

hai all, when the market moves above 10500, buy JULY 2900 puts and watch.
happy trading
bye
ravi

Hi Pankaj and all.
My contention is very pure and simple,the fundamentals of Indian Economy hve not changed.If we ask ourselves,why and why this correction took place,repeatedly,not in jan not in feb,not until the 1st 4 months.Because in hindsight now we know,that global economy and slowdown in US are reasons.Besides Inflation etc.
But I think,markets are barometer,not thermometer,they react on future,what we witnessed was due to market seeing this activity of future and reactin to it.I feel the market is mature enuff to shake it and move ahead.
And BY God,u also know what kinds of length we can go and we will go,so can in foresight see what beauty lies ahead in the future.
Regards
Amit

Hi Ravi

When expectations from the market are high and fear of being left out of the binge is so great , one shows no respect to the market.When market is giving four times the returns should we not pause and think about valuations. I don't remember many telling that valuations were stretched. Now of course everybody would talk about that. When Amitbe warned about tips how many took it seriously.

I am perfectly happy when I see myportfolio giveing a 40% return anuualised without Money managers. I would still be happy if it drops to 25%. Still higher than most instruments. But some are taking hits, do I go and dump them. I would be stupid to think that what I got now has no chance of going up. You have to be patient to get returns.
What FIIs aim for ? A return of 10% annualised, with less risk. Their money is so huge that if they start selling on tips and buying on tips, they will end up impacting the prices so much as to hurt their own profitability. They might have wanted to sell at 9500 levels but then they would have ended in loss at 7600(1900 point fall) So they drove it up to 12600 and then made profit.Think of the IMPACT COST of Fund Operations. How much sold, just 4%. When we get our price by end of week what do we do. Sell everything and book profit. How much time do we to our portfolio to mature. Most of the members want to make money over the weekend. And they get burned.Can FII do that?

When someone talks of dividend, all of us snigger. Why can't we ask companies to increase dividend and declare them in relation to CMP on ex-date. That will really reflect it. 100% dividend means 1 rupee for a share of face value of one rupee and CMP of 500.

It is taken as axiom that if someone profits then necessarily someone has to loose money. Did you ever examine the fundamental principal behind growth of a stock. It is because Companies grow so its prices increse. The relation does not work other way around. That is manipulation. That is why one needs to study fundamentals.


As regards market intervention. It is nothing new. You have to think larger than the market. If market tanked more it would have disastrous consequences for the economy. The damage it would have casued is much more then its real impact on the economy.

In 2003, GreenSpan had such operation going to prop up the market.So don't worry about LIC and UTI buying at higher prices. The prices are going to be still higher in future. If MF holders have no patience or risk appetite or faith in growing economy, they should invest in FDs

Those who want to make money in three months should also be prepared to follow certain discipline or risk loosing all.
Pankaj