Sensex outlook Nov, Dec 2011

Tough international political, financial problems prevailed above the Sensex over the last 3 months resulting in severe volatility....

Dull period ahead of the year end.... hence, expect the following... Support levels 16500, 15750; Resistance 18200, 18900;

Avoid trading in huge positions in Futures... Indian trading mood is bit if low key due to low IIPs, bad corporate governance news like Kingfisher airlines, inflation and higher interest rates. Currency volatility would impact the profit margins over this quarter too.

USA - AAA gone

Finally., the inevitable happened over Friday night.

USA, the super power, dream land which has been screwing up its finances over last 20 years... lost its credit rating from AAA to AA+ by S & P Rating.

As our china friends puts it "The US government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,"

I have no faith in rating agencies... they react after the numbers are out... which are bit late and fair ... but no use to retail investors as the stock market speculators kill the prices anyway before it actually happens !!!

But I believe in one thing - One cant keep borrowing to survive. A country has to live within its means. No one can escape that over a period of time... But the biggest difficult for US is its near zero interest rates... it would be interesting to see how they recover from the part 2 of 2008 toxic cocktail crisis...

I also believe that Italy would never default during this crisis. Let us wait and see abt my prediction.

21st Century would rightfully belong to BRIC ! (Bric - Brazil, Russia, India and China) South Korea, Singapore would give accompany them in this sweet journey !!!

Sensex outlook - April 2011

I rightly predicted a credible pull back. It happened by fag end of March. Sensex recovered from 18200 levels to 19200 levels and Nifty to 5800 levels from 5300.

What is in store during April 2011 ?

Q4 and full year numbers, FX volatility impact on margins to watch out for. I expect moderate sideways movement as we have pulled up considerable in March.

Range could be 5650 to 6100. Sintex, Bajaj Holding could gain this month.

Sensex Outlook - Mar 2011

As i predicted, Nifty did not break 5250 levels and recovered smartly after Budget presentation during Feb.

What is in store for March ?

I only one big -ve factor - Crude prices due to political uncertainty. Barring that Nifty should trade in the range of 5450 - 5850 range. As Nifty has fallen quite steeply post October., it is natural time for some credible pull back.

I feel 5250 levels are unlikely to be broken during March.

Sensex outlook Feb 2011

Nifty is trading around 5465 levels as I write this post. Nifty has come down significantly in January and touched a low of 5400-5410 levels.

Outlook for Feb:

Don't think it will fall significantly from here. Tepid or narrow movement trading to follow until budget. 5250 to 5750 could be the range until Budget.

If the budget is bad or cant be presented due to 2G JPC issue., Nifty might crack to 5050-5125 levels and Sensex could hit 16500-650 levels.

Avoid trading and go for delivery based buying in dips in Nifty stocks.

IBS Article on banking applications

Interesting article on Banking applications

http://www.ibsintelligence.com/index.php?option=com_content&view=article&id=15490:end-of-year-review-2010&catid=255:end-of-year-reviews&Itemid=125

Stock Market outlook - Dec 2010

Markets fell to 5765 levels from 6250 levels and recovered in the first two sessions of December to hover back at 6000 levels.

The strong support for Nifty would remain as 5800-5850 and resistance would be 6165-6185. The trading range could be between 5900 to 6150 for Nifty.

Focus would return to Mid-cap stocks and they could witness hectic buying activity. Polaris, Mphasis could outperform in December.

Sensex outlook - November 2010

Nifty was getting support bwn 5950 - 6000 levels and unable to cross 6175 levels thru Oct. Nifty might break out 6150 range and could move to 6250 - 6350 range in November due to continuing strong inflows.

Sugar stocks could be the surprise package in November. I would also recommend IFCI, Lakshvi Vilas Bank for short term gains.

Update on Nov 15: Nifty broke the 6165 and touched 6325 levels and then had a violent drop to 6050 levels. Weakness likely to presist and Nifty is likely to test 5937 - 5955 range. Need to wait and see whether it can hold. 6150 - 6185 will be the stiff resistance for November.

Sensex Outlook - Oct 2010

Sensex zoomed in September despite the global concerns, yen outlook or retail shareholder selling of 13,000 crores.

My prediction for october - Downward bias.

High range 21650 - 21850 range; strong resistance at 20850-950 range.
Downside of 3 to 5% can be expected if FIIs turn as sellers., then we can test 18500 to 19200 range.

My pick for the month - Buy Century Textiles - Entry 500 to 508 - upside 535 to 548; SL 492-495;

Sell Bank of India 540 to 548 range for a target of 503-511 range SL 565.

Update on Oct 6 - BoI stop loss triggered.

Yen

The Japanese currency Yen is quoting at dangerous levels of 85.3 against USD. My opinion that stock markets are over priced and next the fall could be triggered by Currency crisis. I had written about it some time back.

The level between 83 to 89 is very crucial for Yen. The fall of Yen will trigger a major crisis of exports to Japan manufacturing units and it will have a side effect to other supporting economies.

I reiterate once again, caution is the buzz word. Dont be one sided, that too, long sided.

Sensex outlook - Aug 2010

Nifty is hovering in the range of 5350 to 5425 for the past 10 days. Nifty will make attempt to break the resistance of 5465 - 5485 during Aug and can touch 5525-5545. If there is any correction, 5350, 5285, 5250 would act as support.

Last month's prediction of Opto and Bank of India worked out well. Bank of india touched 410 in and Opto touched 270 levels in July.

Kotak bank could be the dark horse for the month of Aug. CMP 780. If it violates 805 convincingly, it could touch 835 - 848 range. Support can be seen in 750 -762 range.

Even though market is holding on at higher levels, tread cautiously.

Update on Aug 5: Kotak recorded Rs.837. book partial profits.

Sensex outlook July 2010

Sensex has gone up from 5100 levels to 5300 levels bwn June to July first week.

In my opinion, markets are unlikely to fall and could go up and test the resistance of 5385 levels in July and it could even hit 5450 levels. Support for Nifty would be 5250 for July.

As per my last month's prediction, bank of india performed very well and hit 365 levels. If it violates 385 levels, it can go upto 410-425 levels in July.

Another prediction would be to track Opto Cirtuit. CMP is 240 levels. It can go upto 255-262 levels in July.

Update on July 15 - CMP of Opto 270. Hold on for a target of 278-285

Senxex Outlook - June 2010

Nifty has recovered after touching 4850 levels and back at 5100 levels.

Emerging markets are holding strong. India's GDP is stable and rising and a strong economic condition has postponed some selling pressure in May. Despite that, FIIs were net sellers to the tune of 9200 odd crores.

Markets will not fall if it does not violate 5000, 4850 levels for time being. Nifty will face resistance at 5245,5285,5350.

Bank of India (CMP 335) can go upto 365, 385 in this month.

Sensex outlook

Time for i told you so....

In march 2010, i predicted tha the best possibility is 18500 and we touched 18000 for a day after that around april second week.... I also said, that fall is more probable....

Now what?

The bearish tone has set in place with greece fall out, Euro issues... which got missed out in dubai debt crisis. Bearish factors could take Nifty below 5000 and next support will be 4850, 4735... The biggest support will come into play when nifty hits 4500 - 4550 zone.

Currency factors could play a crucial balancing as well as triggers to set the trend. Euro weakening is not good for over all health of world markets.

Buy at every dips - Banking, Pharma with a long term view.

Reproduced from mar 2010 blog post

As for as Sensex concerned, probability of fall is more visible than considerable rise from current levels of 17k. The best of possibility of 18,500 levels and worst of prediction can be to 14500 for the rest of year.

Sensex outlook

One year has gone since the world markets made record lows and made "V" shaped recovery against everyone's prediction. Zero interest rates, easy liquidity, lack of other investment options made the stocks to surge over last one year.

What will happen for rest of 2010 ?

As for as Sensex concerned, probability of fall is more visible than considerable rise from current levels of 17k. The best of possibility of 18,500 levels and worst of prediction can be to 14500 for the rest of year. Sensex could top out only after further rise and is unlikely to fall heavily from current levels.

Rising inflation, hardening interest rates, excess capacity of real estate, lack of infrastructure spending could dampen sentiments. Disinvestment could suck further liquidity away from secondary markets to primary markets. So tread cautiously.

Bad news will find its way

Despite not so really strong fundamentals, markets rallied heavily over past 9 months due to excessive liquidity, low interest rates. Stocks were in favour because lack of other opportunities in other instruments.

Finally, Dubai credit crunch would trigger the much awaited correction in equities. Let us see, how far this new story would develop and affect the prices.

As i say, in good bull markets, bad news will get ignored. In uncertainty, even a little bit of bad news would cause havoc to stock prices. We rallied heavily and were waiting for some excuse. Here it comes !!!

Senxex outlook - Nov 09

Much awaited correction, sell off happened by oct end. Sensex fell close to 10% in 10 days or so. Correction was quite heavy in metal, steel, realty and almost very less in IT, Pharma, auto stocks.

I feel, we can go up to 16500 levels and then fall again to test 14500 levels in November. Traders are advised caution while buying in gap-ups and instead buy in gap downs.

I would recommend buying pharma stocks, auto and auto ancillary stocks at every dips.

Update on Nov 27: who would have the much awaited correction in stock prices would come by the way of dubai uncertainities? Anyway, we went upto 17250 and started correcting. Let us see how far it goes....

Abt Q2 - 2009 Result

Q2 results are coming out in full swing. Sales has increased bwn 4-6%, net profit has increased by 13-17% so far.

It is neither giving great comfort nor pushing the analysts into confusion. It can be read as "flat" as the stock prices raised significantly over past 6 months.

Pharma, IT, Auto, PSU bank sector stocks have managed to beat the street expectatations broadly when compared to other sectors.

Indiaearnings.com's quality of updation of result flow failed miserably this quarter. Example some 150 companies have given their result today and you look at the site... hardly 50 updates so far. They better do something productive.

Nifty at crossroads

Nifty is seemingly at crossroads. Most of the sectors barring Oil, Refinery, Power have moved up and no one is clear which sector would take the Nifty to 5500 levels at this point.

Q2 Results is on the way and next next 10 days would decide where the Nifty would go. Be patient is the word for intra day traders as Stop Loss is getting regularly triggered over past 5 days.

Pause is the buzz word now than Push !

Impact of per second billing to Indian Telecom Industry

My own analysis on Tata Docomo's per second billing impact on indian telecom industry detailed below:

Background: Tata Docomo launched per second billing across country and it is proving to be a hit. This resulted in rate war and RCOM followed it up with 50p billing last week. Bharti, IDEA and vodafone are yet to react to it.

What does this mean to consumers: India is filled with pre paid customers like 80:20 ration to postpaid. People are price sensitive and can easily shift loyalties.

What does this mean to Industry: ARPUs are stagnating for the past 18 months and is around Rs.230-270 range. This could crash to 140-180 range if everyone follows suit on pricing.

What does this mean to vendors: Call center handles Rs.10 per call for telecom industry. Telecom players might ask the vendors to cut the price to Rs.2 to Rs.4 and can result in movement of call centers from metros to tier II cities.

IVR usage penetration might be made more user friendly. Managed services players will feel the heat as telecom majors might ask the vendors to handle calls at as low as 6paise to 11 paise.

Fresh capital expenditure will be put on hold and can impact switch players like CISCO, Avaya and vendors like Firstsource, Onmobile.

What does this mean to Employees: 12plus year experienced people segment was majorly active in telecom, realty, engineering. This segment is expected to feel the heat and salary cuts might happen shortly.

What does this mean to investors: Avoid telecom stocks until industry stabilises. Watch only ARPU as data point and not subscriber base.

Over all industry outlook: 2010 / 2011 will witness the character test of the industry. Some 3-4 Niche players might get wiped out and strong players would emerge as winners from the first ever major challenge of indian telecom industry.