Sebi vs Atlanta Chinese market crash budget 2007 insider trading issue rocking US markets dollar yen carry trade ......FIIs net selling in all emerging marketsrising interest rates . Congress govt reeling under defeats due to inflation govt decides Cement pricing all pointing towards global and domestic crisis and this forms a perfect recipe for bears to takeover from where they left last may 2006.
In such situations we have to know what stocks to enter and at what prices. For this we have to combine technical analysis with fundamentals and we should note that system is always better than hope
Some ways to make money in this market
1.Make bonus count
I have studied the historical data of bonus issues of large cap companies and all of them have one thing in common. They all fall on the ex-date and that fall happens to be the biggest fall around the record date. Please find enclosed excel of previous bonus issues of L and T, DR Reddys and Dabur . In the enc. Sheet you will find that dabur has fallen nearly 6 %, L and T has fallen nearly 2.4 % and Dr reddys has fallen nearly 1% on the ex-date . Is it time to take a margin call and go short on HCL on 15th of this month ..i think history has given us the answer.
2.Be informed and make every opportunity count
IPCL shares appreciated when news came out that it is likely to be taken over by reliance, cement stocks were beaten heavily when the government announced that the prices will remain unchanged for an year immaterial of the input cost and we all know what happened to sugar last year. Always be alert and make the most of these opportunities. Never hesitate to take intra-day calls or swing calls when the opportunity presents itself but know the resistance and support levels of these stocks and also stick to your stop-loss points.
3.IPOs
Investing in quality IPOs is always a good option. So even if we have missed the bus we can still catch it in the secondary market. The number of times an IPO has been over-subscribed Is an important indicator and ,if recent good listings are any thing to go by, ( idea , mindtree , Indian bank etc.) intra day trading on the day the stock hits the secondary market is an option that can be explored. But, as always ,remember this applies only for quality stocks .
4.Take long term calls in a short term bear market
There are enough value bets available in the market right now and if we dont make the most of it someone else will. Some important points to be noted :
P/E ratios of any company has to be compared with its benchmark industry to know whether they are a value buy or not and also with its main rival . For e.g. ICICI Banks p/e has to compared with p/e ratios of private banking players but also has to be benchmarked with that of HDFC bank.
Growth in operating profits , competition , asset size , market share and management efficiency will play a key role in identifying companies with strong fundamentals.
Please note : dont pick a commodity stock even if it matches all the above criteria ( not again ) . They are so prone to political , global and industry uncertainties . Even otherwise there are better value picks outside the commodities basket.
I strongly believe that the market will break any support levels when it is bearish and will penetrate any resistance levels when it is bullish. So playing with the technical levels alone will not work in this market and the same applies to fundamentals aswell. Hence the solution lies in combining both to make the most of the given market condition.
IF nothing works for you then its time to take that well deserved vacation (Im already on my way!)
In such situations we have to know what stocks to enter and at what prices. For this we have to combine technical analysis with fundamentals and we should note that system is always better than hope
Some ways to make money in this market
1.Make bonus count
I have studied the historical data of bonus issues of large cap companies and all of them have one thing in common. They all fall on the ex-date and that fall happens to be the biggest fall around the record date. Please find enclosed excel of previous bonus issues of L and T, DR Reddys and Dabur . In the enc. Sheet you will find that dabur has fallen nearly 6 %, L and T has fallen nearly 2.4 % and Dr reddys has fallen nearly 1% on the ex-date . Is it time to take a margin call and go short on HCL on 15th of this month ..i think history has given us the answer.
2.Be informed and make every opportunity count
IPCL shares appreciated when news came out that it is likely to be taken over by reliance, cement stocks were beaten heavily when the government announced that the prices will remain unchanged for an year immaterial of the input cost and we all know what happened to sugar last year. Always be alert and make the most of these opportunities. Never hesitate to take intra-day calls or swing calls when the opportunity presents itself but know the resistance and support levels of these stocks and also stick to your stop-loss points.
3.IPOs
Investing in quality IPOs is always a good option. So even if we have missed the bus we can still catch it in the secondary market. The number of times an IPO has been over-subscribed Is an important indicator and ,if recent good listings are any thing to go by, ( idea , mindtree , Indian bank etc.) intra day trading on the day the stock hits the secondary market is an option that can be explored. But, as always ,remember this applies only for quality stocks .
4.Take long term calls in a short term bear market
There are enough value bets available in the market right now and if we dont make the most of it someone else will. Some important points to be noted :
P/E ratios of any company has to be compared with its benchmark industry to know whether they are a value buy or not and also with its main rival . For e.g. ICICI Banks p/e has to compared with p/e ratios of private banking players but also has to be benchmarked with that of HDFC bank.
Growth in operating profits , competition , asset size , market share and management efficiency will play a key role in identifying companies with strong fundamentals.
Please note : dont pick a commodity stock even if it matches all the above criteria ( not again ) . They are so prone to political , global and industry uncertainties . Even otherwise there are better value picks outside the commodities basket.
I strongly believe that the market will break any support levels when it is bearish and will penetrate any resistance levels when it is bullish. So playing with the technical levels alone will not work in this market and the same applies to fundamentals aswell. Hence the solution lies in combining both to make the most of the given market condition.
IF nothing works for you then its time to take that well deserved vacation (Im already on my way!)
