Biggest test for nascent bull market

[protrade]

Friday's leg down in Europe and America, plus a weak start in Asia make this the biggest test for this bull market.

Simex Nifty indicating a 1.5% drop, which is potentially a fantastic entry level for people who didn't get in earlier. Especially high beta plays like Sun Pharma and Tata Motors could be available at attractive levels despite run up over last 3 days.

I expect Reliance to stay relatively strong based on Friday's favorable meeting with TRAI, where incumbent operators agreed to honor their obligations. Also, over the weekend, robust demand for Jio SIM cards could support the stock.

I also expect ICICI to stay strong and help banking index - ICICI Pru IPO makes this a very attractive story; and this gain should allow the bank to make a serious dent in NPA levels.

 

[protrade]

Reliance seems to be holding as expected. ICICI bank is a spectacular buy because of its dip. IPru IPO is done deal at this point - typical overreaction by market.

Am surprised at the strength shown by TCS - and just realized how much valuations have come down in that stock. Sub-19 PE ratio is extremely cheap. Like they say, everything has a price, and looks like TCS has now found a price that makes sense.

Was hoping for a bigger fall in Sun Pharma, but I guess the strength is good to see.

But still early days, long way to go for the close. My sense is market could stun us with its strength from here.

 

[protrade]

Market takes a hit - but I am thrilled that outside of Tata Motors, the names I have been pushing have outperformed the market - Reliance up on the day, Sun Pharma was down, but outperformed the Nifty. Reiterate that markets are mispricong ICICI Bank.

 

[protrade]

Yesterday was the best chance anyone could have hoped for, to get in. Today the bull market resumes - and something tells me it is going to be a great day in the markets - unless you are caught short!!

 

[Aman1]

Yesterday was the best chance anyone could have hoped for, to get in. Today the bull market resumes - and something tells me it is going to be a great day in the markets - unless you are caught short!!

Except that it's holiday today

 

[protrade]

Except that it's holiday today

Ah - what a day to be a holiday!

 

[protrade]

India definitely missed out a potential recovery because of the holiday yesterday. But it is interesting to see markets down at the moment.

Firstly, Inflation numbers in India came in at good level. Overnight markets have fallen because of a drop in crude and a lower likelihood of a rate hike. These two are actually India positive factors, because they increase the possibility of Indian rate cut.

But market seems to be caught up in the global warp - and needs some triggers to break out of it. Where those triggers will come from is the question.

I am happy with Reliance and ICICI, and not so happy with Coal India and Sun Pharma. At this point, I would recommend selling some covered calls against Coal India and Sun Pharma. Don't do anything on Reliance and ICICI, with stocks showing decent strength. Especially ICICI is due a good pop post the IPru IPO. Expect a good move in Reliance over the next few days - stock is showing excellent strength.

 

[protrade]

This post was originally posted exactly 2 weeks back. And the bull market seems to have held its own, without major cracks.

But there is now stronger support coming for bull market. Current Account Deficit figures are the best in 9 years. And by next quarter, they will be in surplus. That should help Rupee to strengthen - and the impact of that will be additional returns for foreigners.

Urjit Patel's first interaction with economists has set a dovish tone. Chances of a Rate cut on October 4th are very high. Plus the new Monetary Policy Committee framework has clear focus on growth as well as inflation, instead of previously only inflation target. Thirdly, actions of other central banks give India a window of opportunity to lower rates - which might not be there post December.

GST is moving very well, and is actually ahead of schedule. And now the voices are coming out, including Urjit Patel, that GST is likely to lower inflation significantly. This is also a powerful positive in multiple ways.

Rupee strength over the last month has been exceptional. Pretty much every single market participant and analyst expected Rupee to weaken because they were looking in wrong direction of the FCNR maturity. I called this correctly way back, and said FCNR money is not going out, and on the contrary, those dollars will be converted to Rupees to buy equities. So it will actually boost Rupee. That has played out as predicted.

The market is poised for a big leg up. Question is, how many days will it take to make a new top above 9105? Will it happen in this expiry itself, or will it happen early in October. But clearly, all indicators point to this happening well before Diwali.

That being said, Simex is actually indicating a weaker open for Nifty. Again a brilliant buying opportunity! Don't miss this.

 

[protrade]

Yet another reason for market sentiment to improve. Last week, the money sucked out of markets for the ICICI Pru IPO will be coming back day after tomorrow.

And since this is ICICI Pru IPO, with significant special quotas for ICICI Shareholders in retail side, it stands to reason that many bids from ICICI Direct are also there. ICICI Direct and many other brokers, immediately block the entire amount of the bid in your account, based onASBA - that is Application Supported by Blocked Amount. Day after tomorrow, that Block will be released.

The same things that kept markets weak last week will be reversed day after tomorrow. That should have a positive impact on markets. I think we can safely consider that the total amount being reversed is of the order of Rs 10,000 crores at least because of the magnitude of the IPO!

 

[Happy_Singh]

With Green shades everything Looks . . . . . well . . . . . . . . . . . Green . . .


Anyway plz carry on

Happy