6 double dip warning signs
The recovery from the Great Recession has likely started. But many economists are worried about falling into another downturn. Here's what has them concerned.
Will recovery turn to recession?
Most economists agree the U.S. economy is in recovery. The question is whether it will stay that way.
The economy grew at a 3.5% annual rate in the third quarter. But even with that shot in the arm, there are plenty of worries about whether the economy could topple into another period of decline, or "double dip" recession, early next year.
These concerns have some economists calling for yet another round of economic stimulus early next year to try to jump start the still struggling labor market. The fear is that if the economy heads into another downturn, the Federal Reserve and Congress will have few, if any, tools left to address the new problems.
"If we do slide back into recession, it will be very difficult to get out," said Mark Zandi, chief economist for Moody's Economy.com.
So how can we tell if the economy is really at risk of double dipping? Here are six key economic indicators that bear watching. All have shown signs of improvement in recent months. But if they start moving in the wrong direction again, that could be bad news.
Jobs
Unemployment hit a 26-year high of 10.2% in October. Topping the 10% benchmark got a lot of attention from the public and the White House, but it wasn't the main story for economists. Instead, they look at the U.S. payrolls number, which is based on a survey of employers about how many people are on staff.
That number has steadily improved since 741,000 lost their jobs in January. But 190,000 more jobs were lost in October. That is still more than the average monthly loss during the 2001 recession.
Many economists are forecasting job growth by early 2010. But if job losses continue deep into next year, that could tip the economy back into recession. If job losses start to increase again, it would be a cause for even greater concern since that could lead to a bigger pullback in retail sales, home prices and auto purchases.
Retail sales
Retail sales have been showing signs of life in recent months. The government's seasonally adjusted retail sales reading, excluding autos, has risen in four of the last five months. Still, the National Retail Federation is forecasting that sales during the all important holiday shopping season will be down 1% from a year ago.
A better than expected Christmas season would do a lot to lift worries hanging over the economy. But with credit tight, unemployment high and consumers who have jobs saving more, some worry retail sales will disappoint. That could cause additional problems for retailers and companies that make the products they sell.
Since consumer spending accounts for about 70% of the nation's economic activity, healthy retail sales are the key to a strong rebound. "If consumers get unexpectedly scared of buying at Christmas, we could go back into recession," said David Wyss, chief economist at Standard & Poor's.
Oil
Few would argue that the chaos in the financial markets in the fall of 2008 helped send the economy into its worst period of decline since the Great Depression. But the oil price shock earlier that summer, which sent prices to a record high of more than $145 a barrel, may have had an even bigger impact on consumers.
However, as economic activity slowed around the globe, so did oil consumption, causing prices to plunge. So one positive byproduct of the recession for many Americans was a roughly 75% decline in oil prices that occurred between the July 2008 high and the end of last year.
Oil prices have been rising again this year though, due largely to hopes that the end of the global recession is in sight. While prices are not expected to test highs any time soon, there are forecasts that $100-a-barrel oil could return next year thanks to stronger demand.
Since many consumers have limited ability to cut the amount of gasoline they use, another oil shock would take away money they can spend on other goods and services. It can also raise costs for businesses, forcing them to cut back on investment and even staffing.
Autos
Few industries were hit harder by the recession than the auto industry. Some of the strongest companies, such as Toyota, lost money. Two of the industry's weakest players -- GM and Chrysler -- were forced into bankruptcy.
Auto sales have gotten better in recent months. Sales were essentially flat in October -- an encouraging sign since sales were not artificially boosted that month by the government's Cash for Clunkers program. Automakers are even ramping up production in the fourth quarter to replenish decreased supplies at dealerships.
Most forecasts are for modest improvement in sales across the industry in 2010. But that's contingent on an economic recovery taking hold. If job losses continue to mount and credit stays tight, the industry could be in for another year of weak sales and widespread losses. And that would likely mean more plant closings and layoffs, which in itself would be another blow to the overall economy.
Housing
The underlying cause of the Great Recession was a bursting of the housing bubble back in 2007. Home prices plunged, sparking significant financial losses that shook the globe's major financial institutions as well as the wealth of individual Americans. That's why a pickup in home sales and rising housing prices are critical for an economic recovery.
Fortunately, sales have steadily improved throughout much of this year and it appears that home prices may have finally hit bottom. Yet, some argue that housing prices remain too high in relation to income, suggesting there is still room for prices to decline. A federal tax credit for buyers and lower mortgage rates may also be helping the market -- and neither is certain to continue.
There are also worries about a so-called shadow inventory of homes that have gone into foreclosure that have yet to hit the market. Once they do, that could put further downward pressure on prices. That's why many think the housing market is still in a fragile state. And if the improvement in housing proves to be short-lived, so will the broader economic recovery.
Stocks
The stock market is often said to be a leading indicator of the economy, meaning that stocks move higher ahead of any upturn in the economy as investors bet on better times ahead.
Major U.S. stock indexes have had a strong run since hitting a low in March, recapturing much of the decline sparked by last fall's financial crisis. Still, stocks are well below their pre-recession levels.
There are plenty of market experts who worry that prices have gotten too far ahead of actual improvement in corporate sales and earnings. A market correction probably wouldn't raise fears of another recession. But a new bear market, with prices falling about 20% from current levels, would be another shock to the financial system that could cause broader problems for a still vulnerable economy.
"Post bubble credit collapses are generally fraught with fragility and general economic weakness," said David Rosenberg, chief economist and strategist for investment bank Gluskin Sheff. "I don't believe you can destroy trillions of dollars of wealth and believe we're back to normal."
By CNN MONEY.COM
Monday, November 16, 2009
Saturday, November 14, 2009
Sensex may drift down to 12500, -ve on RIL: Shankar Sharma
Shankar Sharma, Vice-Chairman and Joint Managing Director, First Global, says the Sensex can drift down to 12,000-12,500. He feels the next 3-4 months would to be challenging for equities. "We are looking at a 20% fall in global markets, so India would sell off more if they fall."Shankar advises investors to stay away from high beta stocks. He is negative on Reliance Industries
Q: It looked like global markets were getting ready for a deep correction last week, and then suddenly things have turned around and the S&P has gone right back to 1,100 again. Do you think the correction is over?
A: No. In fact, when the correction happened, I was of the view that we would get another bounce. Call it a sucker rally or whatever but I was personally of the view that we would see about 16,700–16,800 on the Sensex and US markets would probably go back to their highs or close to their highs. I think the Nasdaq 100 did get back to its highs yesterday.
What is interesting is that the emerging markets are still reasonably far away, good 2% on the aggregate from their highs whilst the US markets have made their highs. That is an interesting disconnect because usually emerging markets should have made their highs a lot earlier than the US markets ought to have but that has not happened this time.
Even today the follow through from the emerging markets (EMs) is far less vigorous than what one would have imagined given the size of the move yesterday on the US markets. Even yesterday, EMs were not that robust except the European and the Latin American end. But Asia was by and large quite tepid, and even today, I don’t see much sort of vigour in the move.
So that is beginning to, at least, surface a slight disconnect between what is happening on the EM side versus what is happening on the US equity side. My sense is that EMs will begin to lag significantly and that usually happens when markets fall rather than when markets rally because it is hard to imagine that EMs won’t participate in any big rally in global equity markets from hereon. So if EMs lag, that is usually a precursor to sell-offs rather than big rallies globally. My sense, therefore, is that over the next month or so, you are going to start seeing the reversal of what began in March this year and the next three–four–six months could be extremely challenging for equity markets globally be it India or be it the rest of the world.
Q: We are at that Sensex level you just talked about. So what seems the more likely move from here that we get into a trading range or that this market corrects faster than the others?
A: If markets do sell off India will sell off a lot more and my view is that markets globally will sell off rather than rally. They could do 1–2% here or there that’s fine but by and large I would on the side of the trade that I will wait for a chance to get shorts in rather than big longs round here globally.
If markets do well, which I think they will, India will sell off a lot more than that. I am looking at about 20% fall in global equities from hereon. India being typically at the high beta end of the market will probably fall a tad more than that and so will the other high beta emerging markets like Russia or Latin America.
Q: You are saying a 25% correction in the index in India is likely which would take it back to again that 12,500 kind of zone?
A: That wouldn’t surprise me in the least, absolutely not. I would definitely hold that view over the next six months that you could go all the way back to 12,000–12,500 and who knows as we always know overshoots happen on either side of the market. So on a bad day you could slide down 500 points even from there. Definitely, I do not think the upsides are there incrementally. You get a blast last rally, which could take you 200 points higher, that’s fine, that’s for a quick trader but not for any serious investor, definitely not.
Q: You would be very surprised if the year end saw a big move up for the markets because the counter argument is that liquidity is still comfortable and there may almost be a scramble to get something done by the end of the year by way of a performance?
A: These theories are very bad except that usually when they work, we say the theory works but there are enough number of times when they don’t work. Statistically, I am not a big believer in these easy, cozy theories because markets are all about destroying, precisely, those kind of theories.
If you think about the correction that happened in the last fifteen-twenty days globally, there was no apparent reason why it should have happened. That is the interesting bid that it was accompanied by pretty much good news globally. If you would look at the US gross domestic product (GDP) numbers, they were quite strong.
South Korea did blowout numbers on their GDP end. By and large, there was nothing that merited a sudden sharp fall of the kind that we saw. That makes you begin to think that is the market reading something which the headlines are not highlighting just yet? Go back to March when the rally started, there was still bad news. It continued for a good month to a month and a half, it was only around late May or June that you started to see real sequential growth coming in. However, I do remember the headlines in late March or mid-April and I was saying that the fundamentals have still not turned. The fact is that they did turn sequentially but it took a good two and a half months.
So sometimes market moves without reasons, you need to probably think a lot deeper that what is the market’s inner mind telling you. So my sense is it could well be that the market is beginning to read that in the next three–six months’ time, this whole easy liquidity and low interest rate and low inflation theory, which has made this move happen could go out the window because now you are going to see the ill-effect of a low inflation base this year begin to creep up from Q1 of 2010 and then again sequentially earnings may not be as strong as there has been because we were coming out of an absolute trough. So maybe the market’s mind is beginning to read those things that sequentially issues––be it on inflation or on rates or on earnings––may not be as robust as is necessary to propel this market higher.
Q: There has been a lot of talk about the dollar carry trade and how that’s fuelled asset prices and whether it will reverse in the next few months. What are your thoughts on the dollar and whether that might pan out?
A: When the dollar falls then you have a big rally in global equities, and particularly, in emerging markets. But I was looking at history and I was not able to find that this is a perfectly correlated situation and I am a big believer in that theory and I belong to the camp that the dollar has to strengthen for markets to fall and it could well do so.
However, there have been reasonable periods and even in the last three years in which it was counter to the conventional theory that the dollar actually strengthen while markets went up as well. So it is not always that this theory holds. My broad view is that the dollar might strengthen a tad but I do not see huge strengthening move. It may well be that the relationship may not hold in that. If the dollar actually does not strengthen what that does is, and let us say on the other hand it weakens, what that will probably do is it might push inflation argument back to the fore. Therefore, rates will follow in the whole reversal of the cycle. That is not going to be good news for the market. So the global economy is still very fragile and the last thing any country can afford is a resurgence of inflation.
Therefore, no economy in the world, that I can think of, can afford a move to tighten rates just now. Therefore, if the dollar actually weakens and rates begin to harden then you may see equity prices begin to tumble because the dollar is weakening rather than the relationship that the dollar weakens and because of that you end up having rallies in equity markets. So maybe this relationship is due for a break because all of us have become too cozy even in assuming that this is a way the trade actually works out.
Q: What do you think about this whole Reliance settlement issue, do you think it is likely? What is your own position in First Global on the Reliance stock?
A: We have been negative on Reliance Industries for quite a while now. I see no reason to change that view. These occasional spikes keep happening as there is hopeful talk that the settlement might be reached and I am not an insider on that trade for me to know whether there will be or not.
What I am more interested is knowing how the Supreme Court (SC) will interpret all the complexities around this and how will a court of law get into very detailed analysis of a business problem because typically courts are into issues of law rather than get into what is the cost of producing gas and stuff like that which even we analysts cannot figure out. So let us see how the SC takes this but I am no insider in this.
Q: What has gone a bit back of mind now is Q2’s performance by way of earnings, there were a lot of chinks over there. The only redeemed feature seemed to be the margin performance which as well maybe up for question in the next couple of quarters, what would your own earnings outlook be?
A: In light of what we have seen, it has been basically one big pack and that has been the auto pack that has truly been good. It has been outstanding in terms of numbers on an aggregate basis. Other than that, you are searching hard to justify a lot of their valuations, you are searching hard to see how incremental earnings growth will come through, if you look at the whole fund raising pie chart from the lows of March, it has gone to companies––infrastructure and realty pack––which have been at the poorest end of the market as far as business fundamental are concerned.
They have to my mind whatever little good news was there by way of their earning sequentially or whichever way you want to cut it, they just want to say that this is the only chance, let us put some numbers together, show the market that we are in good shape, let us get some capital and then we will figure out how to rework the numbers once you got money. It has been a little bit of a logic and reverse. However, companies that have not needed capital within that pack have been only the auto pack. So that has really gladdened the hearts but other than that the earnings picture was pretty relative to where the market is.
At 8,000 same earnings picture would have looked very different but at 17,000 where the markets were, this earnings number or these aggregate numbers are not going to take you to the highs. That has been my general view that the highs while tantalizingly close are unlikely to get reached or breached anytime soon even though for a brief moments, there have been moments that I doubt that is it really going to get there in November or December, etc. but on an aggregate basis, my view by and large has been that we would get a huge bear market rally which we got but it wouldn’t take us pass the highs simply because of the internals of the market by way of their marketcap weightages, hard to see which ones will take the markets higher because autos still don’t constitute much and that is the only area I feel comfortable about.
Q: What do you do with high beta now? Do you short that, do you stay away from it? How would you position yourself in that trade?
A: I never short anything at all, not in India anyway.
Q: Would you stay away from high beta names now?
A: Yes absolutely. If you see a lot of them have been struggling to take out their ranges. They have promised to take them out, threatened to take them out but they have somehow fallen short. The only stocks that have well on that front again have been in the auto pack or a few isolated stocks like Tech Mahindra here or Ranbaxy elsewhere.
By and large, stocks in the last 2–2.5 months actually have done what analyst keep talking about perennially, which is a trading range and the move from 15,500 to 17,500 was largely driven by some of the auto numbers and the auto names. I don’t know why Tata Steel rallied all the way from Rs 420 to Rs 570 maybe there was a short squeeze or maybe there was something else. However, clearly the numbers don’t bear out any such optimism what the stock display for a brief while when the markets went to 17,500 or 17,200–17,300
Q: The one you have recommended a short on is telecom. Is that trade done or is it still open?
A: It’s a utility short in the sense if you run short of ideas then you go and say, do this trade. I don’t think they are going to halve as of next weekend. But this sector is pretty much done with and I don’t know why it enjoyed its time in the sun in the last two years.
I can understand from the early 2002, 2006 or 2007, when the big move upwards there by way of subscriber ads and not much competition––remember that was the key that people hoard its spectrum, the raw material was scarce in supply and the incumbents, therefore, made out like band-aids. But once the cap on operators was removed, once spectrum became reasonably available then why these stocks survive for this period of time? I don’t know.
So my sense is markets will not go down to their March lows. My sense is worst case 11,500–12,000 is where I see the markets going down to. However, a lot of stocks will break their March lows. Conversely, markets are not going to go to their highs but a lot of stocks have made all time as we discussed Maruti or Punjab National Bank (PNB), etc.
So that’s going to be the nature of this beast that markets will sell off but not sell off enough to take them to the March lows but a lot of stocks will break their March lows. There are quite a few big names might break their March lows.
Q: A few weeks back I read a few buy reports from First Global on stocks like Educomp then a subscribe note on Indiabulls Power. Were you just flagging along or playing along with momentum at that point, and therefore, you recommended a subscribe and has that changed?
A: I don’t have a view on a lot of the research reports that go especially on initial public offering (IPO) subscriptions. The fact of the matter is that Educomp is a very strange company and I don’t like the financials of that company although there was some news a week back or something that they are going to fix the free cash flow problem which is what my concern on the stock has been for many months.
I just think that education space in the next two years will have more positive surprises than negative. So there is going to be a good tailwind of positive information flow, feedback loop from that space.
Other than that, don’t start taking an Indiabulls Power subscription note too seriously because we can only say that it is relative to Adani Power a better one not that I am saying that it is a great buy because now after Reliance Power a whole new method of investing has opened up in which 2014–2015–2016 numbers are banded around as if it is the next quarter’s numbers.
But like I said that in the IPO market, somebody wants to put in money at that valuation, it is not the company’s problem or not the merchant banker’s problem, their job is to get the highest possible price. It is a pure zero-sum game unlike the secondary markets. So I hold nothing against Indiabulls Power or Adani Power or even Reliance Power.
Q: What has seen as the other unique positive for India is the divestment plans and the talk of so much policy change, paper hitting the market, would you see that as reason to keep the market buoyant or do you think so much supply might actually choke the secondary market?
A: Governments have typically never been able to time markets well by way of their divestment plans and almost 70–80% of the time we have gotten it wrong. Videsh Sanchar Nigam Ltd (VSNL) going for multiple road shows back in early 90s and coming back empty handed because the government used to say that look at this price we will not do it and we want Rs 20 higher or something like that.
So governments might get lucky, we might get a few away but it will still pressure markets rather than make markets buoyant because you are still going to divert money supply coming into the markets directly versus going into the primary market. So while it is good for the government of India, I don’t think that necessarily will be good for the secondary market. That is assuming that they do happen in the first place because markets can be very fickle and as we saw within two months of March, everything changed, we could easily change on the other side as well.
Q: A quick update on the proceedings of your case. Where does it stand right now with now the Securities Appellate Tribunal (SAT) ruling out of the way?
A: It is not out of the way, it’s still pretty much in the way and I can tell you nothing shocks me anymore. I have seen a lot, but this one did. This was an absolute bolt out of the blue because you go to the court of law expecting that you will get justice on counts of merit and counts of law but when you do not get it because if you didn’t think there was merit in your case, you wouldn’t have in fact appealed it in the first place. You would simply say, I will take it and I will just sit back at home and read a book or something. But you just go there thinking that these are the points of law on which the regulator is absolutely at fault and on 5,000 shares of Reliance and 10,000 shares of Infosys and 2,000 shares of Wipro, how on earth can somebody say that these trades have been manipulative when they have been done at market price and there is not even a rupee is changed after the trade has been done.
So you go there expecting justice and you don’t get it, it is not just disappointing, it’s shocking but be that as it may you have to respect the decision of the court and you have to move the battlefield elsewhere. So we are in the process of filing our appeal in the Supreme Court and hopefully in the next two weeks’ time or something we should be in there and then we will see what happens there of course in the Supreme Court matters of law gains precedence over matters of fact. So it’s a different approach that you take then what happened to the Tribunal. But the fact of the matter is that I am pretty fed up with this because to keep defending against rubbish charges like this for nine years is a bit much for even a man of my patience. So it only makes you think that instead of retiring at the age of 50 maybe 46 is a right age to retire.
Q: The one thing which the SAT ruling pointed out, your point about number of shares is taken, is that they kept harping on the fact that you took opposing trades and on that point they dismissed your plea, what is your response to that?
A: It is a straight forward thing. First and foremost there is no rule; there is no law in Sebi that you cannot be on both sides of the trade. Any number of trades be it a block deal, intrapromoter transfer, transfer from one P-note provider to another P-note provider with the hedge fund being on both sides of the trade. Intrafund transfers by mutual funds, any number of trades I can tell you in which unofficial ownership doesn’t change, and no Sebi regulation prevents that. But more importantly what we told SAT was very straight forward for that matter we told Sebi as well that what happens when you have a position at a certain broker, whose margin limits are getting full even today that happens. So the broker tells you, “please square up your positions here, take it elsewhere because my terminals are going to get shut off in the next few minutes or hours”, or he will simply do offsetting trade if you are 10,000 shares long in Reliance this here or 10,000 futures if that would be the case today. You would simply square it up here and you have an account with another broker, you simply offset that trade there by buying the same stock there. That is it. There is nothing more. It is simply a transfer of position from a broker to another on an isolated day when that particular broker’s margin limits are getting full and we have shown to the SAT as well as to SEBI, nine years back as well that these are the exact dates, these are isolated trades in a single stock. This is very clearly shown to have done at a market price, there is this insignificant volumes, all the stocks, each and every one of them trades in crore of shares and 5,000 and 2,000 shares don’t make or mar any price discovery in these stocks. More importantly, if you don’t agree with me then you tell me what I was attempting to do by doing this trade. You tell me, what is the benefit to me by doing this trade other than what I had simply told you that if margin limits are getting over here and you have to necessarily move the position or simply square it up but I want to hold on to my 10,000 Reliance long, what am I supposed to do?
I simply move it to another broker and these happened on very isolated instances, the volume here is insignificant. The price discovery is absolutely identical pre- and post-trend. What manipulation is this? If this is manipulation then everything I do today also is probably manipulation. It is absolutely absurd.
The beauty of this business is a regulator can spin out a charge out of thin air, it can simply say these are large transactions. Unfortunately, courts here look at law more than merits because of the fact that ultimately these are things that are decided by experts, people who are in the business or analyzing stock markets if you get a high court judge or supreme court judge, which is what I was thinking even in the Reliance matter, they are not equipped to get into the absolute the minutiae of a business transaction that is not there core competence. That is the competence of a regulator but when a regulator has the premeritated stance on this, there is very little you can do. So that is the simple fact that we told the court or we told the SEBI that what benefit is it accrue to us. We have done it transparently; it is in my personal name. Does anybody in the world do manipulation in his personal name? My account is open in the name of Shankar Sharma, it is not open in the name of some front entity sitting in Mauritius.
You telling me I am that stupid, I might be stupid but not that stupid that if I have to commit a crime I will do it in my personal name and with a fully disclosed member client agreement, which is known to the stock exchange and to the regulators.
So the fact of the matter is you can spin a fictitious charge out of nothing and I am supposed to defend it for the next twenty-five years. Fine, I will do it because I am supposed to do it and I will fight it but ultimately this is something that I don’t wake up all night thinking about. It doesn’t concern me in the least. All that matters to me is the next morning when you wake up, all your friends are still your friends.
Q: Where does it stand now? The last we heard the order was in abeyance till the end of November. By that time you would have filed an appeal in the Supreme Court?
A: Yes exactly.
article by moneycontrol.com
Q: It looked like global markets were getting ready for a deep correction last week, and then suddenly things have turned around and the S&P has gone right back to 1,100 again. Do you think the correction is over?
A: No. In fact, when the correction happened, I was of the view that we would get another bounce. Call it a sucker rally or whatever but I was personally of the view that we would see about 16,700–16,800 on the Sensex and US markets would probably go back to their highs or close to their highs. I think the Nasdaq 100 did get back to its highs yesterday.
What is interesting is that the emerging markets are still reasonably far away, good 2% on the aggregate from their highs whilst the US markets have made their highs. That is an interesting disconnect because usually emerging markets should have made their highs a lot earlier than the US markets ought to have but that has not happened this time.
Even today the follow through from the emerging markets (EMs) is far less vigorous than what one would have imagined given the size of the move yesterday on the US markets. Even yesterday, EMs were not that robust except the European and the Latin American end. But Asia was by and large quite tepid, and even today, I don’t see much sort of vigour in the move.
So that is beginning to, at least, surface a slight disconnect between what is happening on the EM side versus what is happening on the US equity side. My sense is that EMs will begin to lag significantly and that usually happens when markets fall rather than when markets rally because it is hard to imagine that EMs won’t participate in any big rally in global equity markets from hereon. So if EMs lag, that is usually a precursor to sell-offs rather than big rallies globally. My sense, therefore, is that over the next month or so, you are going to start seeing the reversal of what began in March this year and the next three–four–six months could be extremely challenging for equity markets globally be it India or be it the rest of the world.
Q: We are at that Sensex level you just talked about. So what seems the more likely move from here that we get into a trading range or that this market corrects faster than the others?
A: If markets do sell off India will sell off a lot more and my view is that markets globally will sell off rather than rally. They could do 1–2% here or there that’s fine but by and large I would on the side of the trade that I will wait for a chance to get shorts in rather than big longs round here globally.
If markets do well, which I think they will, India will sell off a lot more than that. I am looking at about 20% fall in global equities from hereon. India being typically at the high beta end of the market will probably fall a tad more than that and so will the other high beta emerging markets like Russia or Latin America.
Q: You are saying a 25% correction in the index in India is likely which would take it back to again that 12,500 kind of zone?
A: That wouldn’t surprise me in the least, absolutely not. I would definitely hold that view over the next six months that you could go all the way back to 12,000–12,500 and who knows as we always know overshoots happen on either side of the market. So on a bad day you could slide down 500 points even from there. Definitely, I do not think the upsides are there incrementally. You get a blast last rally, which could take you 200 points higher, that’s fine, that’s for a quick trader but not for any serious investor, definitely not.
Q: You would be very surprised if the year end saw a big move up for the markets because the counter argument is that liquidity is still comfortable and there may almost be a scramble to get something done by the end of the year by way of a performance?
A: These theories are very bad except that usually when they work, we say the theory works but there are enough number of times when they don’t work. Statistically, I am not a big believer in these easy, cozy theories because markets are all about destroying, precisely, those kind of theories.
If you think about the correction that happened in the last fifteen-twenty days globally, there was no apparent reason why it should have happened. That is the interesting bid that it was accompanied by pretty much good news globally. If you would look at the US gross domestic product (GDP) numbers, they were quite strong.
South Korea did blowout numbers on their GDP end. By and large, there was nothing that merited a sudden sharp fall of the kind that we saw. That makes you begin to think that is the market reading something which the headlines are not highlighting just yet? Go back to March when the rally started, there was still bad news. It continued for a good month to a month and a half, it was only around late May or June that you started to see real sequential growth coming in. However, I do remember the headlines in late March or mid-April and I was saying that the fundamentals have still not turned. The fact is that they did turn sequentially but it took a good two and a half months.
So sometimes market moves without reasons, you need to probably think a lot deeper that what is the market’s inner mind telling you. So my sense is it could well be that the market is beginning to read that in the next three–six months’ time, this whole easy liquidity and low interest rate and low inflation theory, which has made this move happen could go out the window because now you are going to see the ill-effect of a low inflation base this year begin to creep up from Q1 of 2010 and then again sequentially earnings may not be as strong as there has been because we were coming out of an absolute trough. So maybe the market’s mind is beginning to read those things that sequentially issues––be it on inflation or on rates or on earnings––may not be as robust as is necessary to propel this market higher.
Q: There has been a lot of talk about the dollar carry trade and how that’s fuelled asset prices and whether it will reverse in the next few months. What are your thoughts on the dollar and whether that might pan out?
A: When the dollar falls then you have a big rally in global equities, and particularly, in emerging markets. But I was looking at history and I was not able to find that this is a perfectly correlated situation and I am a big believer in that theory and I belong to the camp that the dollar has to strengthen for markets to fall and it could well do so.
However, there have been reasonable periods and even in the last three years in which it was counter to the conventional theory that the dollar actually strengthen while markets went up as well. So it is not always that this theory holds. My broad view is that the dollar might strengthen a tad but I do not see huge strengthening move. It may well be that the relationship may not hold in that. If the dollar actually does not strengthen what that does is, and let us say on the other hand it weakens, what that will probably do is it might push inflation argument back to the fore. Therefore, rates will follow in the whole reversal of the cycle. That is not going to be good news for the market. So the global economy is still very fragile and the last thing any country can afford is a resurgence of inflation.
Therefore, no economy in the world, that I can think of, can afford a move to tighten rates just now. Therefore, if the dollar actually weakens and rates begin to harden then you may see equity prices begin to tumble because the dollar is weakening rather than the relationship that the dollar weakens and because of that you end up having rallies in equity markets. So maybe this relationship is due for a break because all of us have become too cozy even in assuming that this is a way the trade actually works out.
Q: What do you think about this whole Reliance settlement issue, do you think it is likely? What is your own position in First Global on the Reliance stock?
A: We have been negative on Reliance Industries for quite a while now. I see no reason to change that view. These occasional spikes keep happening as there is hopeful talk that the settlement might be reached and I am not an insider on that trade for me to know whether there will be or not.
What I am more interested is knowing how the Supreme Court (SC) will interpret all the complexities around this and how will a court of law get into very detailed analysis of a business problem because typically courts are into issues of law rather than get into what is the cost of producing gas and stuff like that which even we analysts cannot figure out. So let us see how the SC takes this but I am no insider in this.
Q: What has gone a bit back of mind now is Q2’s performance by way of earnings, there were a lot of chinks over there. The only redeemed feature seemed to be the margin performance which as well maybe up for question in the next couple of quarters, what would your own earnings outlook be?
A: In light of what we have seen, it has been basically one big pack and that has been the auto pack that has truly been good. It has been outstanding in terms of numbers on an aggregate basis. Other than that, you are searching hard to justify a lot of their valuations, you are searching hard to see how incremental earnings growth will come through, if you look at the whole fund raising pie chart from the lows of March, it has gone to companies––infrastructure and realty pack––which have been at the poorest end of the market as far as business fundamental are concerned.
They have to my mind whatever little good news was there by way of their earning sequentially or whichever way you want to cut it, they just want to say that this is the only chance, let us put some numbers together, show the market that we are in good shape, let us get some capital and then we will figure out how to rework the numbers once you got money. It has been a little bit of a logic and reverse. However, companies that have not needed capital within that pack have been only the auto pack. So that has really gladdened the hearts but other than that the earnings picture was pretty relative to where the market is.
At 8,000 same earnings picture would have looked very different but at 17,000 where the markets were, this earnings number or these aggregate numbers are not going to take you to the highs. That has been my general view that the highs while tantalizingly close are unlikely to get reached or breached anytime soon even though for a brief moments, there have been moments that I doubt that is it really going to get there in November or December, etc. but on an aggregate basis, my view by and large has been that we would get a huge bear market rally which we got but it wouldn’t take us pass the highs simply because of the internals of the market by way of their marketcap weightages, hard to see which ones will take the markets higher because autos still don’t constitute much and that is the only area I feel comfortable about.
Q: What do you do with high beta now? Do you short that, do you stay away from it? How would you position yourself in that trade?
A: I never short anything at all, not in India anyway.
Q: Would you stay away from high beta names now?
A: Yes absolutely. If you see a lot of them have been struggling to take out their ranges. They have promised to take them out, threatened to take them out but they have somehow fallen short. The only stocks that have well on that front again have been in the auto pack or a few isolated stocks like Tech Mahindra here or Ranbaxy elsewhere.
By and large, stocks in the last 2–2.5 months actually have done what analyst keep talking about perennially, which is a trading range and the move from 15,500 to 17,500 was largely driven by some of the auto numbers and the auto names. I don’t know why Tata Steel rallied all the way from Rs 420 to Rs 570 maybe there was a short squeeze or maybe there was something else. However, clearly the numbers don’t bear out any such optimism what the stock display for a brief while when the markets went to 17,500 or 17,200–17,300
Q: The one you have recommended a short on is telecom. Is that trade done or is it still open?
A: It’s a utility short in the sense if you run short of ideas then you go and say, do this trade. I don’t think they are going to halve as of next weekend. But this sector is pretty much done with and I don’t know why it enjoyed its time in the sun in the last two years.
I can understand from the early 2002, 2006 or 2007, when the big move upwards there by way of subscriber ads and not much competition––remember that was the key that people hoard its spectrum, the raw material was scarce in supply and the incumbents, therefore, made out like band-aids. But once the cap on operators was removed, once spectrum became reasonably available then why these stocks survive for this period of time? I don’t know.
So my sense is markets will not go down to their March lows. My sense is worst case 11,500–12,000 is where I see the markets going down to. However, a lot of stocks will break their March lows. Conversely, markets are not going to go to their highs but a lot of stocks have made all time as we discussed Maruti or Punjab National Bank (PNB), etc.
So that’s going to be the nature of this beast that markets will sell off but not sell off enough to take them to the March lows but a lot of stocks will break their March lows. There are quite a few big names might break their March lows.
Q: A few weeks back I read a few buy reports from First Global on stocks like Educomp then a subscribe note on Indiabulls Power. Were you just flagging along or playing along with momentum at that point, and therefore, you recommended a subscribe and has that changed?
A: I don’t have a view on a lot of the research reports that go especially on initial public offering (IPO) subscriptions. The fact of the matter is that Educomp is a very strange company and I don’t like the financials of that company although there was some news a week back or something that they are going to fix the free cash flow problem which is what my concern on the stock has been for many months.
I just think that education space in the next two years will have more positive surprises than negative. So there is going to be a good tailwind of positive information flow, feedback loop from that space.
Other than that, don’t start taking an Indiabulls Power subscription note too seriously because we can only say that it is relative to Adani Power a better one not that I am saying that it is a great buy because now after Reliance Power a whole new method of investing has opened up in which 2014–2015–2016 numbers are banded around as if it is the next quarter’s numbers.
But like I said that in the IPO market, somebody wants to put in money at that valuation, it is not the company’s problem or not the merchant banker’s problem, their job is to get the highest possible price. It is a pure zero-sum game unlike the secondary markets. So I hold nothing against Indiabulls Power or Adani Power or even Reliance Power.
Q: What has seen as the other unique positive for India is the divestment plans and the talk of so much policy change, paper hitting the market, would you see that as reason to keep the market buoyant or do you think so much supply might actually choke the secondary market?
A: Governments have typically never been able to time markets well by way of their divestment plans and almost 70–80% of the time we have gotten it wrong. Videsh Sanchar Nigam Ltd (VSNL) going for multiple road shows back in early 90s and coming back empty handed because the government used to say that look at this price we will not do it and we want Rs 20 higher or something like that.
So governments might get lucky, we might get a few away but it will still pressure markets rather than make markets buoyant because you are still going to divert money supply coming into the markets directly versus going into the primary market. So while it is good for the government of India, I don’t think that necessarily will be good for the secondary market. That is assuming that they do happen in the first place because markets can be very fickle and as we saw within two months of March, everything changed, we could easily change on the other side as well.
Q: A quick update on the proceedings of your case. Where does it stand right now with now the Securities Appellate Tribunal (SAT) ruling out of the way?
A: It is not out of the way, it’s still pretty much in the way and I can tell you nothing shocks me anymore. I have seen a lot, but this one did. This was an absolute bolt out of the blue because you go to the court of law expecting that you will get justice on counts of merit and counts of law but when you do not get it because if you didn’t think there was merit in your case, you wouldn’t have in fact appealed it in the first place. You would simply say, I will take it and I will just sit back at home and read a book or something. But you just go there thinking that these are the points of law on which the regulator is absolutely at fault and on 5,000 shares of Reliance and 10,000 shares of Infosys and 2,000 shares of Wipro, how on earth can somebody say that these trades have been manipulative when they have been done at market price and there is not even a rupee is changed after the trade has been done.
So you go there expecting justice and you don’t get it, it is not just disappointing, it’s shocking but be that as it may you have to respect the decision of the court and you have to move the battlefield elsewhere. So we are in the process of filing our appeal in the Supreme Court and hopefully in the next two weeks’ time or something we should be in there and then we will see what happens there of course in the Supreme Court matters of law gains precedence over matters of fact. So it’s a different approach that you take then what happened to the Tribunal. But the fact of the matter is that I am pretty fed up with this because to keep defending against rubbish charges like this for nine years is a bit much for even a man of my patience. So it only makes you think that instead of retiring at the age of 50 maybe 46 is a right age to retire.
Q: The one thing which the SAT ruling pointed out, your point about number of shares is taken, is that they kept harping on the fact that you took opposing trades and on that point they dismissed your plea, what is your response to that?
A: It is a straight forward thing. First and foremost there is no rule; there is no law in Sebi that you cannot be on both sides of the trade. Any number of trades be it a block deal, intrapromoter transfer, transfer from one P-note provider to another P-note provider with the hedge fund being on both sides of the trade. Intrafund transfers by mutual funds, any number of trades I can tell you in which unofficial ownership doesn’t change, and no Sebi regulation prevents that. But more importantly what we told SAT was very straight forward for that matter we told Sebi as well that what happens when you have a position at a certain broker, whose margin limits are getting full even today that happens. So the broker tells you, “please square up your positions here, take it elsewhere because my terminals are going to get shut off in the next few minutes or hours”, or he will simply do offsetting trade if you are 10,000 shares long in Reliance this here or 10,000 futures if that would be the case today. You would simply square it up here and you have an account with another broker, you simply offset that trade there by buying the same stock there. That is it. There is nothing more. It is simply a transfer of position from a broker to another on an isolated day when that particular broker’s margin limits are getting full and we have shown to the SAT as well as to SEBI, nine years back as well that these are the exact dates, these are isolated trades in a single stock. This is very clearly shown to have done at a market price, there is this insignificant volumes, all the stocks, each and every one of them trades in crore of shares and 5,000 and 2,000 shares don’t make or mar any price discovery in these stocks. More importantly, if you don’t agree with me then you tell me what I was attempting to do by doing this trade. You tell me, what is the benefit to me by doing this trade other than what I had simply told you that if margin limits are getting over here and you have to necessarily move the position or simply square it up but I want to hold on to my 10,000 Reliance long, what am I supposed to do?
I simply move it to another broker and these happened on very isolated instances, the volume here is insignificant. The price discovery is absolutely identical pre- and post-trend. What manipulation is this? If this is manipulation then everything I do today also is probably manipulation. It is absolutely absurd.
The beauty of this business is a regulator can spin out a charge out of thin air, it can simply say these are large transactions. Unfortunately, courts here look at law more than merits because of the fact that ultimately these are things that are decided by experts, people who are in the business or analyzing stock markets if you get a high court judge or supreme court judge, which is what I was thinking even in the Reliance matter, they are not equipped to get into the absolute the minutiae of a business transaction that is not there core competence. That is the competence of a regulator but when a regulator has the premeritated stance on this, there is very little you can do. So that is the simple fact that we told the court or we told the SEBI that what benefit is it accrue to us. We have done it transparently; it is in my personal name. Does anybody in the world do manipulation in his personal name? My account is open in the name of Shankar Sharma, it is not open in the name of some front entity sitting in Mauritius.
You telling me I am that stupid, I might be stupid but not that stupid that if I have to commit a crime I will do it in my personal name and with a fully disclosed member client agreement, which is known to the stock exchange and to the regulators.
So the fact of the matter is you can spin a fictitious charge out of nothing and I am supposed to defend it for the next twenty-five years. Fine, I will do it because I am supposed to do it and I will fight it but ultimately this is something that I don’t wake up all night thinking about. It doesn’t concern me in the least. All that matters to me is the next morning when you wake up, all your friends are still your friends.
Q: Where does it stand now? The last we heard the order was in abeyance till the end of November. By that time you would have filed an appeal in the Supreme Court?
A: Yes exactly.
article by moneycontrol.com
Friday, August 28, 2009
Don't be tricked by market optimism, cautions First Global
The risks for the stock market are building up and the markets are still being in an optimistic mode, so one could see a correction ahead, believes Devina Mehra of First Global. “That’s the market’s way of tricking you.”
“It’s a situation when the finance minister comes on the channel and says the drought situation is worrying but the markets continue to go up. It’s a situation where people say global markets may go down so money will be diverted into India and it will do well. Or if global markets fare well, India will anyway do well,” Mehra said in an interview to CNBC-TV18.
Heavyweights like Bharti, Reliance Communication, Reliance Industries and NTPC would weigh on index’s upside, she said, adding that the various risks that the markets faced were the government borrowing and high inflation.
Stocks-wise, Mehra said midcaps were looking good but the midcap may last only for a few more weeks. She was negative on metals and mining stocks. “The commodity boom is over for now. The China buying story is over for now,” she said.
Power stocks were fully valued, Mehra said, and added that there may not be more upside in the sector.
Q: What is your sense, where is the market heading next from where we have reached in the last three months, essentially trapped in a bit of a trading range?
A: The risks are building up; we are still in a very optimistic mode. So we are still in a mode where the Finance Minister comes on the channel and talks about drought and market goes up. So for a while we can keep saying that the drought doesn’t matter, that the global commodity sell-off doesn’t matter, that China coming down doesn’t matter — that is always the market’s way that it will trick you into believing that none of that matters but overtime it builds up and it starts to show.
It is a reverse of what was happening very early in this calendar year where your mind was refusing to accept some of the good numbers that were coming through on cement and later on auto and so on. Right now, we are bit on the other side and it’s not as if it is going to happen tomorrow. But if you look at a week to a month’s perspective, the risks are definitely building up and not just for India, if you look at the emerging market and particularly the Brazil, Russia, India and China (BRIC) set you are going to be impacted.
Right now you are in a mode where if global markets are not doing well, India should do well because the money will come here or if the global markets are doing, well, then India will anyway do well. The mind is set towards taking the positives but those are the risks. If you look at just at our market, particularly the largecaps, there are risks in many of them because most of them never did become that very cheap and from there the index doubled. So right now you will have a lot of heavyweights, which will weigh down on the index in terms of not having a tremendous upside whether it is telecom stocks — Bharti, RComm, RIL, ONGC, NTPC — none of those we see as making huge moves on the upside or for that matter banks, cement space are also tiring out, so those are the risks.
Midcaps would now look slightly better because they were impacted negatively when the market just dried out, particularly for the primary markets and the qualified institutional placement
(QIP) because a lot of them became heavily capital constrained. So the capital coming through has meant positive things on the fundamentals for some of them, so that has been relatively slightly better space.
article by moneycontrol.com
“It’s a situation when the finance minister comes on the channel and says the drought situation is worrying but the markets continue to go up. It’s a situation where people say global markets may go down so money will be diverted into India and it will do well. Or if global markets fare well, India will anyway do well,” Mehra said in an interview to CNBC-TV18.
Heavyweights like Bharti, Reliance Communication, Reliance Industries and NTPC would weigh on index’s upside, she said, adding that the various risks that the markets faced were the government borrowing and high inflation.
Stocks-wise, Mehra said midcaps were looking good but the midcap may last only for a few more weeks. She was negative on metals and mining stocks. “The commodity boom is over for now. The China buying story is over for now,” she said.
Power stocks were fully valued, Mehra said, and added that there may not be more upside in the sector.
Q: What is your sense, where is the market heading next from where we have reached in the last three months, essentially trapped in a bit of a trading range?
A: The risks are building up; we are still in a very optimistic mode. So we are still in a mode where the Finance Minister comes on the channel and talks about drought and market goes up. So for a while we can keep saying that the drought doesn’t matter, that the global commodity sell-off doesn’t matter, that China coming down doesn’t matter — that is always the market’s way that it will trick you into believing that none of that matters but overtime it builds up and it starts to show.
It is a reverse of what was happening very early in this calendar year where your mind was refusing to accept some of the good numbers that were coming through on cement and later on auto and so on. Right now, we are bit on the other side and it’s not as if it is going to happen tomorrow. But if you look at a week to a month’s perspective, the risks are definitely building up and not just for India, if you look at the emerging market and particularly the Brazil, Russia, India and China (BRIC) set you are going to be impacted.
Right now you are in a mode where if global markets are not doing well, India should do well because the money will come here or if the global markets are doing, well, then India will anyway do well. The mind is set towards taking the positives but those are the risks. If you look at just at our market, particularly the largecaps, there are risks in many of them because most of them never did become that very cheap and from there the index doubled. So right now you will have a lot of heavyweights, which will weigh down on the index in terms of not having a tremendous upside whether it is telecom stocks — Bharti, RComm, RIL, ONGC, NTPC — none of those we see as making huge moves on the upside or for that matter banks, cement space are also tiring out, so those are the risks.
Midcaps would now look slightly better because they were impacted negatively when the market just dried out, particularly for the primary markets and the qualified institutional placement
(QIP) because a lot of them became heavily capital constrained. So the capital coming through has meant positive things on the fundamentals for some of them, so that has been relatively slightly better space.
article by moneycontrol.com
Saturday, July 18, 2009
Week Ahead
Updated: Jul 17, 2009 at 23:15
WEEK AHEAD
The market may extend gains after a more than 9% surge in the week ended 17 July 2009. The undertone remains bullish as analysts expect a turnaround in the economy the near future as government stimulus packages take effect. Revival of the monsoon rains and initiatives on divestment may support stocks. With earnings season in progress, companies unveiling their June 2009 quarterly results will be in the spotlight.
NIFTY RANGE
4100-4700
CRUCIAL
SUPPORT 4180 & RESISTANCE 4480
APPROACH
One should be on the long side and not look at levels
STRATEGY
Book profit in Rally & wait for Correction to enter fresh.
MARKET TREND
It is difficult to make a call but the short-term trend is up.
MARKET OUTLOOK
Right now, what we are pricing in is a fair value plus about 15-20% growth in earnings which is not out of whack with our markets.
SECTOR TO WATCH
Banking & Infrastructure
FACTORS
Revival of the monsoon rains, Initiatives on divestment & Earning
IMPORTANT
Big move is coming. But we would like to see really what will trigger the move.
· TECHNICAL:
Nifty is on its way back to above 4600, But it will test the resistance levels seen earlier on June 12. The market has been trading in a fairly wide trading band and that kind of position remains as of now. It should go and test 4600.and maybe one could see a correction from there. In all likelihood it will go and test the earlier highs of about 4600.
Don't see too much downside. But if Nifty goes seriously above 4600 level, it will be advisable to exit and wait because at that point there would be a mismatch between the valuation and the pricing. Right now, what we are pricing in is a fair value plus about 15-20% growth in earnings which is not out of whack with our markets.
We may have a target of close to 4600-4700 so one needs to keep that in perspective and plan a trading strategy accordingly. There could be a flutter from 4350 levels. In the near term right now, if there is any immediate downside 4180 around is likely to be a strong support. We can have one sharp intraday dip or a one-day crack but very near-term 4180 around should hold. The next resistance is at 4480 and the later target is towards 4620.
· MOMENTUM:
What a terrific day this is turning out to be. Two fantastic days; one day for pause, yesterday and the markets ready to fly once again that’s the message on the screen; no volatility, its been doing strong. It did not open with a massive gap up just about 30 odd points higher on the Nifty but now is up 130 points, so it’s been a gradually upwards climbing graph during the course of the day. The Sensex is up 430 points, this is about to cap up one of the best weeks we have seen recently. Last week there was a big sell off in the market and now the market seems to be getting right back to where it fell off from. So it was 8-9% down week and now its 8-9% up week that we are headed for a close. So the budget disappointment or the sell off is been unwound almost completely over the last few sessions. Last four sessions has taken to unwind most of it, another 100 odd points and we will be there at pretty much the pre budget level, now at more than 4350.
It is difficult to make a call but the short-term trend is up. As far as it remains up, we never know. The fact remains that a downtrend was stemmed almost exactly at support. We were talking of 3800 and just 100 points short of that, that decline is over now.
The momentum favors the bulls. The key here is you should be on the long side and not look at levels. 4480 is the first resistance and if that is crossed we think quite easily we will reach 4620.
· DISINVESTMENT:
A progress on disinvestment will lift sentiment. On 14 July 2009, the Union Finance Minister, Pranab Mukherjee, told Lok Sabha that the Finance Ministry has initiated discussions with other ministries and departments for identifying the state run firms where a portion of Government shareholding can be sold.
Earlier in his budget speech on 6 July 2009, the Finance Minister had pegged the revenue estimates from disinvestment at Rs 1,120 crore for 2009-10, lower than the Rs 1,165 crore garnered in 2008-09.
The government is reportedly considering to divest stake in four PSUs -- National Minerals Development Corporation (NMDC), Kudremukh Iron Ore Company (KIOCL), Manganese Ore (India) (MOIL) and Rashtriya Ispat Nigam (RINL) - administered by the steel ministry, as part of a broader plan to mobilise resources to meet their funding needs.
· ECONOMY:
Meanwhile, analysts expect a turnaround in the economy the near future as government stimulus packages take effect. As per government data released on 11 July 2009, India's industrial output rose by a higher-than-expected 2.7% in May 2009, indicating interest-rate cuts and stimulus measures are helping revive demand. This is significantly more than the downwardly revised 1.2% growth in April 2009.
· GLOBAL FRONT:
At the global level, sentiment has been improving with the US Federal Reserve on 15 July 2009 lifting its forecast for the recession-hit American economy. It now forecasts that the economy will shrink between 1% to 1.5% in 2009 from its earlier forecast of a 1.3% to 2% contraction.
Renowned economist Nouriel Roubini said on 16 July 2009 said the worst of the financial crisis is over and the US economy was no longer in a free fall.
US retail sales grew for the second consecutive month, rising 0.6% in June 2009 as compared with 0.5% gain in May 2009. Eurozone industrial production rose for the first time in nine months in May 2009. Production in the 16 countries that use the euro recorded a monthly growth of 0.5% in May 2009, compared to a revised 1.4% fall in April 2009.
· RIL-RNRL CASE:
Closer home, the Supreme Court hearing on the Reliance Industries (RIL)-Reliance Natural Resources (RNRL) due on 20 July 2009 will be closely watched. RIL said on 17 July 2009 it has no unfettered rights to Krishna Godavari (KG) Gas. The company told the Supreme Court that it is bound by government policies on the pricing and sale of gas produced at the KG-D6 field, following a petition filed by Reliance Natural Resources (RNRL) seeking enforcement of a lower court order on supplying gas for less than the price set by the government.
The SC is scheduled to hear the dispute on 20 July 2009 in what could be the final stage of a wrangle sparked by the breakup of the Ambani family empire in 2005. The Bombay High Court ruled that RIL must honor a 2005 agreement to sell gas from the Bay of Bengal field to estranged brother Anil's company.
· EARNING:
Earnings unveiled by Indian companies so far have been encouraging. The combined net profit of 122 firms rose 60% on 18% rise in sales in Q1 June 2009 over Q1 June 2008.
Wipro, Housing Development Finance Corporation, Bharat Heavy Electricals, ACC, Oil & Natural Gas Corporation, Maruti Suzuki India and Ranbaxy Laboratories will declare their June 2009 quarterly results in the forthcoming week.
Others companies that will unveil their June 2009 quarterly results next week include Petronet LNG, JSW Steel, Infrastructure Development Finance Company, Chambal Fertilizers & Chemicals, Dr Reddy's Laboratories, Thermax, Ultratech Cement, Mastek, Canara Bank, Siemens, Ambuja Cements, Biocon and Hindustan Construction Company.
· MONSOON:
Investor will also monitor the progress of India's annual monsoon. India's monsoon has revived this month after a dismal start last month. Rainfall in the week to 10 July was 6% more than the long-term average. For the 1 June-15 July period it was 27% below normal, improving from a deficit of 36% up to 8 July.
The weather office has also forecast widespread rainfall in the next five days in most regions of India where more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
The June-September monsoon rains are a major influence on the economy, as two-thirds of Indians depend on agriculture and large areas of the vast south Asian country suffer from a lack of modern irrigation facilities. Poor monsoon rains could dent rural demand, hurt corporate profitability and undermine sentiment in financial markets.
IN-A-NUTSHEL:
We had already a big rally and now we think is the time to stand aside a little and look how the markets will move. We think a big move is coming. But we would like to see really what will trigger the move.
It is difficult to make a call but the short-term trend is up. As far as it remains up, we never know. The fact remains that a downtrend was stemmed almost exactly at support. We were talking of 3,800 and just 100 points short of that, that decline is over now.
The momentum favors the bulls. The key here is you should be on the long side and not look at levels. 4480 is the first resistance and if that is crossed we think quite easily we will reach 4620.
THE WEEK THAT WAS
For the week, BSE Sensex surged 9.5% and the NSE Nifty added 9.3%.
The key stock indices recorded its biggest weekly gain since May 24. The FM’s clarifications in parliament on disinvestment and the borrowing programme, coupled with reports of encouraging progress in monsoon led the recovery after last week’s sharp decline. Strong global cues also helped. Finally, the BSE Sensex surged 9.5% and the NSE Nifty added 9.3%.
The BSE Sensex hit an intra-week high of 14,801 and low of 13,220. While, the NSE Nifty hit an intra-week high of 4,390 and low of 3,918.
The Foreign Institutional Investors bought stocks worth Rs7.59bn during the week and the Domestic Institutional Investors also purchased stocks worth Rs9.61bn during the week.
· The top gainers:
The top gainers in the Sensex were DLF (up 19.4%), ICICI Bank (up 18.1%), Reliance Capital (up 16.9%), Tata Motors (up 16.7%) and Hindalco (up 15.8%).
· The Top Losers:
HUL was the only loser among the 30-components of the BSE Sensex. The stock was down 0.22%.
Disclosures/Disclaimers:The Calls/materials contained/made herein are for information purpose and are not recommendation to any person to buy or sell any securities. The information is derived from sources, that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their action. We may or may not have any position in given stock. If any other entity, individual or service provider also giving the same script and recommendation than we are not responsible for that. By continuing to read or referring to material contained, you have read and agreed to the disclosure & disclaimers mentioned & published.
WEEK AHEAD
The market may extend gains after a more than 9% surge in the week ended 17 July 2009. The undertone remains bullish as analysts expect a turnaround in the economy the near future as government stimulus packages take effect. Revival of the monsoon rains and initiatives on divestment may support stocks. With earnings season in progress, companies unveiling their June 2009 quarterly results will be in the spotlight.
NIFTY RANGE
4100-4700
CRUCIAL
SUPPORT 4180 & RESISTANCE 4480
APPROACH
One should be on the long side and not look at levels
STRATEGY
Book profit in Rally & wait for Correction to enter fresh.
MARKET TREND
It is difficult to make a call but the short-term trend is up.
MARKET OUTLOOK
Right now, what we are pricing in is a fair value plus about 15-20% growth in earnings which is not out of whack with our markets.
SECTOR TO WATCH
Banking & Infrastructure
FACTORS
Revival of the monsoon rains, Initiatives on divestment & Earning
IMPORTANT
Big move is coming. But we would like to see really what will trigger the move.
· TECHNICAL:
Nifty is on its way back to above 4600, But it will test the resistance levels seen earlier on June 12. The market has been trading in a fairly wide trading band and that kind of position remains as of now. It should go and test 4600.and maybe one could see a correction from there. In all likelihood it will go and test the earlier highs of about 4600.
Don't see too much downside. But if Nifty goes seriously above 4600 level, it will be advisable to exit and wait because at that point there would be a mismatch between the valuation and the pricing. Right now, what we are pricing in is a fair value plus about 15-20% growth in earnings which is not out of whack with our markets.
We may have a target of close to 4600-4700 so one needs to keep that in perspective and plan a trading strategy accordingly. There could be a flutter from 4350 levels. In the near term right now, if there is any immediate downside 4180 around is likely to be a strong support. We can have one sharp intraday dip or a one-day crack but very near-term 4180 around should hold. The next resistance is at 4480 and the later target is towards 4620.
· MOMENTUM:
What a terrific day this is turning out to be. Two fantastic days; one day for pause, yesterday and the markets ready to fly once again that’s the message on the screen; no volatility, its been doing strong. It did not open with a massive gap up just about 30 odd points higher on the Nifty but now is up 130 points, so it’s been a gradually upwards climbing graph during the course of the day. The Sensex is up 430 points, this is about to cap up one of the best weeks we have seen recently. Last week there was a big sell off in the market and now the market seems to be getting right back to where it fell off from. So it was 8-9% down week and now its 8-9% up week that we are headed for a close. So the budget disappointment or the sell off is been unwound almost completely over the last few sessions. Last four sessions has taken to unwind most of it, another 100 odd points and we will be there at pretty much the pre budget level, now at more than 4350.
It is difficult to make a call but the short-term trend is up. As far as it remains up, we never know. The fact remains that a downtrend was stemmed almost exactly at support. We were talking of 3800 and just 100 points short of that, that decline is over now.
The momentum favors the bulls. The key here is you should be on the long side and not look at levels. 4480 is the first resistance and if that is crossed we think quite easily we will reach 4620.
· DISINVESTMENT:
A progress on disinvestment will lift sentiment. On 14 July 2009, the Union Finance Minister, Pranab Mukherjee, told Lok Sabha that the Finance Ministry has initiated discussions with other ministries and departments for identifying the state run firms where a portion of Government shareholding can be sold.
Earlier in his budget speech on 6 July 2009, the Finance Minister had pegged the revenue estimates from disinvestment at Rs 1,120 crore for 2009-10, lower than the Rs 1,165 crore garnered in 2008-09.
The government is reportedly considering to divest stake in four PSUs -- National Minerals Development Corporation (NMDC), Kudremukh Iron Ore Company (KIOCL), Manganese Ore (India) (MOIL) and Rashtriya Ispat Nigam (RINL) - administered by the steel ministry, as part of a broader plan to mobilise resources to meet their funding needs.
· ECONOMY:
Meanwhile, analysts expect a turnaround in the economy the near future as government stimulus packages take effect. As per government data released on 11 July 2009, India's industrial output rose by a higher-than-expected 2.7% in May 2009, indicating interest-rate cuts and stimulus measures are helping revive demand. This is significantly more than the downwardly revised 1.2% growth in April 2009.
· GLOBAL FRONT:
At the global level, sentiment has been improving with the US Federal Reserve on 15 July 2009 lifting its forecast for the recession-hit American economy. It now forecasts that the economy will shrink between 1% to 1.5% in 2009 from its earlier forecast of a 1.3% to 2% contraction.
Renowned economist Nouriel Roubini said on 16 July 2009 said the worst of the financial crisis is over and the US economy was no longer in a free fall.
US retail sales grew for the second consecutive month, rising 0.6% in June 2009 as compared with 0.5% gain in May 2009. Eurozone industrial production rose for the first time in nine months in May 2009. Production in the 16 countries that use the euro recorded a monthly growth of 0.5% in May 2009, compared to a revised 1.4% fall in April 2009.
· RIL-RNRL CASE:
Closer home, the Supreme Court hearing on the Reliance Industries (RIL)-Reliance Natural Resources (RNRL) due on 20 July 2009 will be closely watched. RIL said on 17 July 2009 it has no unfettered rights to Krishna Godavari (KG) Gas. The company told the Supreme Court that it is bound by government policies on the pricing and sale of gas produced at the KG-D6 field, following a petition filed by Reliance Natural Resources (RNRL) seeking enforcement of a lower court order on supplying gas for less than the price set by the government.
The SC is scheduled to hear the dispute on 20 July 2009 in what could be the final stage of a wrangle sparked by the breakup of the Ambani family empire in 2005. The Bombay High Court ruled that RIL must honor a 2005 agreement to sell gas from the Bay of Bengal field to estranged brother Anil's company.
· EARNING:
Earnings unveiled by Indian companies so far have been encouraging. The combined net profit of 122 firms rose 60% on 18% rise in sales in Q1 June 2009 over Q1 June 2008.
Wipro, Housing Development Finance Corporation, Bharat Heavy Electricals, ACC, Oil & Natural Gas Corporation, Maruti Suzuki India and Ranbaxy Laboratories will declare their June 2009 quarterly results in the forthcoming week.
Others companies that will unveil their June 2009 quarterly results next week include Petronet LNG, JSW Steel, Infrastructure Development Finance Company, Chambal Fertilizers & Chemicals, Dr Reddy's Laboratories, Thermax, Ultratech Cement, Mastek, Canara Bank, Siemens, Ambuja Cements, Biocon and Hindustan Construction Company.
· MONSOON:
Investor will also monitor the progress of India's annual monsoon. India's monsoon has revived this month after a dismal start last month. Rainfall in the week to 10 July was 6% more than the long-term average. For the 1 June-15 July period it was 27% below normal, improving from a deficit of 36% up to 8 July.
The weather office has also forecast widespread rainfall in the next five days in most regions of India where more than two-thirds of the people live in villages and 60% of the farm land depends on the annual rains.
The June-September monsoon rains are a major influence on the economy, as two-thirds of Indians depend on agriculture and large areas of the vast south Asian country suffer from a lack of modern irrigation facilities. Poor monsoon rains could dent rural demand, hurt corporate profitability and undermine sentiment in financial markets.
IN-A-NUTSHEL:
We had already a big rally and now we think is the time to stand aside a little and look how the markets will move. We think a big move is coming. But we would like to see really what will trigger the move.
It is difficult to make a call but the short-term trend is up. As far as it remains up, we never know. The fact remains that a downtrend was stemmed almost exactly at support. We were talking of 3,800 and just 100 points short of that, that decline is over now.
The momentum favors the bulls. The key here is you should be on the long side and not look at levels. 4480 is the first resistance and if that is crossed we think quite easily we will reach 4620.
THE WEEK THAT WAS
For the week, BSE Sensex surged 9.5% and the NSE Nifty added 9.3%.
The key stock indices recorded its biggest weekly gain since May 24. The FM’s clarifications in parliament on disinvestment and the borrowing programme, coupled with reports of encouraging progress in monsoon led the recovery after last week’s sharp decline. Strong global cues also helped. Finally, the BSE Sensex surged 9.5% and the NSE Nifty added 9.3%.
The BSE Sensex hit an intra-week high of 14,801 and low of 13,220. While, the NSE Nifty hit an intra-week high of 4,390 and low of 3,918.
The Foreign Institutional Investors bought stocks worth Rs7.59bn during the week and the Domestic Institutional Investors also purchased stocks worth Rs9.61bn during the week.
· The top gainers:
The top gainers in the Sensex were DLF (up 19.4%), ICICI Bank (up 18.1%), Reliance Capital (up 16.9%), Tata Motors (up 16.7%) and Hindalco (up 15.8%).
· The Top Losers:
HUL was the only loser among the 30-components of the BSE Sensex. The stock was down 0.22%.
Disclosures/Disclaimers:The Calls/materials contained/made herein are for information purpose and are not recommendation to any person to buy or sell any securities. The information is derived from sources, that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their action. We may or may not have any position in given stock. If any other entity, individual or service provider also giving the same script and recommendation than we are not responsible for that. By continuing to read or referring to material contained, you have read and agreed to the disclosure & disclaimers mentioned & published.
Thursday, June 18, 2009
News-letter
Turning Point
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Aiming to create a smart n happy investor
We tell the turning point of the market. Whenever there is chance to make money we never let it go. Bull or Bear hardly make any difference; we will guide how to make wealth. Losing money is easier in this market; making money from this market is hard & tough. We at Turning Point like to make tough things easier for you.
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Morning Call
Daily Trend and Levels of Stock
Covers 60% Volumes in Nifty
June 19Yahoo Messenger turningpointind2000@yahoo.com
Join Us Online for Market QueriesFor One day Trail SMS Trail, Name Location to09329066969, 09425456785
A Very Good Morning to all Readers/Investors/Traders
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Over View for Today
A strong reversal on cards, we can see nifty bouncing to 4300-4350 levels. Nifty likely to be in a trading range of 4190-4380. Ambani group likely to lead the market. Most of the stocks are trading on there support level. Banking stocks are looking good and followed by IT pack. Volatility will be very high and one need to be careful. Reliance will be the stock to watch and also ONGC from the oil pack.
Major Indices Closing Resistance Support
R1 R2 S1 S2
Nifty 4251.40 4343.75 4436.10 4190.55 4129.75
Trend Decider: 4282.95
Buy Nifty on decline with Strict Stop loss 4180 tar 4280-4330-4380
Sensex 14265 14535 14800 14314.20 14106.12
Trend Decider: 14360
BHARTI 804.85 815.05 825.45 793.65 782.65
Trend Decide: 804.05
Sell below 788 Stoploss 796 Tar 776-765
Buy above 806 sl 800 tar 815-825
RELIANCE 2025.05 2068.30 2111.60 1985.90 1946.80
Trend Decider: 2029.20 Major Support: 1999
Buy with a SL of 1980 for Tar 2070-2110
TataSteel 388.30 412.70 437.10 371.60 354.90
Trend Decider: 396.00 Major Support 355
Relcapital 883.15 933.60 984.05 848.90 814.65
Trend Decider: 899.35 Major Support : 865
Bullish above 904
RNRL
90.30
95.55
100.90
86.50
82.15
Trend Decider: 91.55
LT
1415.75
1463.00
1510.30
1385.40
1355.10
Trend decider :1432.70 Major Support : 1380
DLF
321.55
338.65
355,80
306.50
291.55
Trend decider :323.70 Major Resistance: 355 Major Support:305
Punjlloyd
183.10
197.10
212.30
171.55
160.00
Trend decider :186.15
SBIN
1703.30
1735.00
1766.70
1665.30
1627.30
Trend decider :1697.00 Major Support: 1600
Buy above 1720 tar 1748-1772
RCOM
298.60
311.40
324.30
288.90
279.30
Trend Decider: 301.80 Major Support: 280
Nifty 4400 CA
47.9
Nifty 4400CA was the most active call and we saw tremendous volumes in this counter. Buy on decline with SL 30 Tar 75-90
Nifty 4300 PE
119
Nifty 4300PE was the most active put and we saw tremendous volumes in this counter.
Stocks to Watch
Market Outlook
It was another scary session for the markets led by huge profit booking in infrastructure, commodities and realty stocks. The sell-off was accompanied by huge volumes, which crossed the Rs 1-lakh crore mark. The broader largecap Index Nifty 50 closed just above the 4250 level after seeing an intraday low of 4222.15. Some largecaps saw more than 8% cut in today's trade. Fresh shorts build-up and follow-up unwinding were other reasons for the markets' downfall. ONGC, NTPC, SAIL, Tata Steel, BHEL, L&T, ICICI Bank and Reliance Communication were the negative contributors. However, there was some support seen from SBI, Bharti, Infosys, Hero Honda, Axis Bank, Sun Pharma, Tata Motors, BPCL and PNB. The 30-share BSE Sensex fell 1.77% or 257.31 points, to settle at 14,265.53, after seeing an intraday low of 14,188.25. The NSE Nifty 50 closed at 4251.40, down 2.4% or 104.75 points. Among the broader indices, the BSE Midcap Index slipped 144.21 points or 2.87%, to 4,876.86 and the Smallcap Index fell 3.7% or 214.10 points, to 5,572.44. The Nifty futures added about 35 lakh shares in open interest (OI) and saw a turnover of more than Rs 15,000 crore. Nifty Open Interest PCR (put-call ratio) declined further to 0.88; 4300 Call added 13 lakh shares and 4,400 Call added 10 lakh shares while 4,200 Put added 10 lakh shares in Open Interest.
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We at TurningPoint provide Full follow-up. We are not just giving you technical levels but a calls that anyone can understand with entry and exit levels. Our Market calls are given as per above based on the Research, Technical levels, Market Momentum of specific stock. Most of the call are above or below levels so that you can’t miss the calls…
Stock specific Calls Purely on Intraday 3-5
BTST/STBT Calls by Yahoo Messenger /SMS between 2.45pm – 3.15pm :- 1-2 calls
Daily Newsletter with Technical Levels for intraday and Stock Research.
Short Term Delivery calls with Deep research base.
Trading Methodology
All calls given by us are after a deep technical research and looking at market conditions.
Profit up to 20-50% Per month.
2 calls will be in position for intraday. Further calls will be given once the target is achieved.
We give both entry SMS and exit SMS. We follow up the call till exit.
All calls we given by us involves deep Research and accuracy level is above 85%
Fundamentally strong, Reliable business module, and adequate cash flow + Technical research call with short term delivery like 2-5 days [Accuracy 95%]
BTST/STBT calls through sms or Yahoo strong accuracy above 90% above.
Intraday, BTST, Equity Research Calls all are given with full of confidence and full research given in newsletter.
All calls are with Stoploss and target. And we update them time to time.
Package Details
Stock Future & Options
The Tips & Strategies for the Future & Options Market are provided in this Stock Futures Service.
Monthly: 5000/-
BTST/STBT
If you are looking for just one or two trade with a return of 3-4%, then this is the service. Everyday one or two (includes both Cash and F&O) recommendation will be sent through SMS around 3.00pm.
Monthly : 2500/-
Options Hedging
For Traders willing to risk less and invest less we have launched a service purely for Options (call & Put) players.
Monthly: 2500/-
Index Premium
For trader who are will to take calculated risk on investment. We have launched this service Nifty traders. Index Premium includes trading tips on Nifty Future, Bank Nifty & CNX IT.
Monthly: 3000/-
Real Time Trading
The services will be through Yahoo Messenger or SMS, where we will tell you to buy or sell . This scheme is mainly for skilled, Smart / Position and Volume Day Traders. Main feature of this scheme are as under:
Service Include:
o Pre market call and during the markets hrs call.
o BTST Call.
o Nifty future call.
o Option with Hedging Strategy .
o Long Position with Hedging Strategy
o Delivery based portfolio services.
o End of the day position follow up.
Monthly: 15000/-
For Franchisee Enquiry Contact Yashwant @ 09329066969
For Further DetailsVisit At Our Website : www.turningpoint.net.in
Mail At : turningpointind2000@yahoo.com
Call Us : 09329066969
PAYMENT DETAILS......
All Subscription fees payable in advance in Saving Account in the name of Yashwant
PNB BANK : Account No. 2206000100048838
BANK OF RAJASTHAN: Account No. 710101425049
IMP DISCLAIMER
DISCLOSURE: As an investment and trading consultant my clients may or may not have positions in above-mentioned stocks. I personally, my family, relatives and friends also may or may not have positions in above-mentioned stocks.DISCLAIMER: Contents of this web page have been given in good faith and purely with an independent view. Readers are strictly advised to use this information at their own risk. It is not an offer to act on this information or buy, sell or hold securities. Author would not be liable for any loss or profit arising out of readers acting on the information provided herein because trading in securities carries its inherent Risks. Readers are advice to take their positions on one's own judgment. Fees once paid shall not be returned.
The Total Solution
Aiming to create a smart n happy investor
We tell the turning point of the market. Whenever there is chance to make money we never let it go. Bull or Bear hardly make any difference; we will guide how to make wealth. Losing money is easier in this market; making money from this market is hard & tough. We at Turning Point like to make tough things easier for you.
Visit At: www.turningpoint.net.in
Morning Call
Daily Trend and Levels of Stock
Covers 60% Volumes in Nifty
June 19Yahoo Messenger turningpointind2000@yahoo.com
Join Us Online for Market QueriesFor One day Trail SMS Trail, Name Location to09329066969, 09425456785
A Very Good Morning to all Readers/Investors/Traders
MARKET RESPECTS OUR LEVELS
&
WE RESPECT YOUR TRUST ON US
Thanks for showing your trust on US. Lets make money together and enjoy the swings of the market.
We have a guarantied Return scheme, for details Contact : Yashwant @ 09425456785, 09329066969.
Over View for Today
A strong reversal on cards, we can see nifty bouncing to 4300-4350 levels. Nifty likely to be in a trading range of 4190-4380. Ambani group likely to lead the market. Most of the stocks are trading on there support level. Banking stocks are looking good and followed by IT pack. Volatility will be very high and one need to be careful. Reliance will be the stock to watch and also ONGC from the oil pack.
Major Indices Closing Resistance Support
R1 R2 S1 S2
Nifty 4251.40 4343.75 4436.10 4190.55 4129.75
Trend Decider: 4282.95
Buy Nifty on decline with Strict Stop loss 4180 tar 4280-4330-4380
Sensex 14265 14535 14800 14314.20 14106.12
Trend Decider: 14360
BHARTI 804.85 815.05 825.45 793.65 782.65
Trend Decide: 804.05
Sell below 788 Stoploss 796 Tar 776-765
Buy above 806 sl 800 tar 815-825
RELIANCE 2025.05 2068.30 2111.60 1985.90 1946.80
Trend Decider: 2029.20 Major Support: 1999
Buy with a SL of 1980 for Tar 2070-2110
TataSteel 388.30 412.70 437.10 371.60 354.90
Trend Decider: 396.00 Major Support 355
Relcapital 883.15 933.60 984.05 848.90 814.65
Trend Decider: 899.35 Major Support : 865
Bullish above 904
RNRL
90.30
95.55
100.90
86.50
82.15
Trend Decider: 91.55
LT
1415.75
1463.00
1510.30
1385.40
1355.10
Trend decider :1432.70 Major Support : 1380
DLF
321.55
338.65
355,80
306.50
291.55
Trend decider :323.70 Major Resistance: 355 Major Support:305
Punjlloyd
183.10
197.10
212.30
171.55
160.00
Trend decider :186.15
SBIN
1703.30
1735.00
1766.70
1665.30
1627.30
Trend decider :1697.00 Major Support: 1600
Buy above 1720 tar 1748-1772
RCOM
298.60
311.40
324.30
288.90
279.30
Trend Decider: 301.80 Major Support: 280
Nifty 4400 CA
47.9
Nifty 4400CA was the most active call and we saw tremendous volumes in this counter. Buy on decline with SL 30 Tar 75-90
Nifty 4300 PE
119
Nifty 4300PE was the most active put and we saw tremendous volumes in this counter.
Stocks to Watch
Market Outlook
It was another scary session for the markets led by huge profit booking in infrastructure, commodities and realty stocks. The sell-off was accompanied by huge volumes, which crossed the Rs 1-lakh crore mark. The broader largecap Index Nifty 50 closed just above the 4250 level after seeing an intraday low of 4222.15. Some largecaps saw more than 8% cut in today's trade. Fresh shorts build-up and follow-up unwinding were other reasons for the markets' downfall. ONGC, NTPC, SAIL, Tata Steel, BHEL, L&T, ICICI Bank and Reliance Communication were the negative contributors. However, there was some support seen from SBI, Bharti, Infosys, Hero Honda, Axis Bank, Sun Pharma, Tata Motors, BPCL and PNB. The 30-share BSE Sensex fell 1.77% or 257.31 points, to settle at 14,265.53, after seeing an intraday low of 14,188.25. The NSE Nifty 50 closed at 4251.40, down 2.4% or 104.75 points. Among the broader indices, the BSE Midcap Index slipped 144.21 points or 2.87%, to 4,876.86 and the Smallcap Index fell 3.7% or 214.10 points, to 5,572.44. The Nifty futures added about 35 lakh shares in open interest (OI) and saw a turnover of more than Rs 15,000 crore. Nifty Open Interest PCR (put-call ratio) declined further to 0.88; 4300 Call added 13 lakh shares and 4,400 Call added 10 lakh shares while 4,200 Put added 10 lakh shares in Open Interest.
FOR ANY QUERY OR FREE TRIAL
MAIL US AT turningpointind2000@yahoo.com
Or Contact Us at 09329066969,09425456785
For Franchisee Contact Yashwant @ 09329066969
Why to join TurningPoint?
We at TurningPoint provide Full follow-up. We are not just giving you technical levels but a calls that anyone can understand with entry and exit levels. Our Market calls are given as per above based on the Research, Technical levels, Market Momentum of specific stock. Most of the call are above or below levels so that you can’t miss the calls…
Stock specific Calls Purely on Intraday 3-5
BTST/STBT Calls by Yahoo Messenger /SMS between 2.45pm – 3.15pm :- 1-2 calls
Daily Newsletter with Technical Levels for intraday and Stock Research.
Short Term Delivery calls with Deep research base.
Trading Methodology
All calls given by us are after a deep technical research and looking at market conditions.
Profit up to 20-50% Per month.
2 calls will be in position for intraday. Further calls will be given once the target is achieved.
We give both entry SMS and exit SMS. We follow up the call till exit.
All calls we given by us involves deep Research and accuracy level is above 85%
Fundamentally strong, Reliable business module, and adequate cash flow + Technical research call with short term delivery like 2-5 days [Accuracy 95%]
BTST/STBT calls through sms or Yahoo strong accuracy above 90% above.
Intraday, BTST, Equity Research Calls all are given with full of confidence and full research given in newsletter.
All calls are with Stoploss and target. And we update them time to time.
Package Details
Stock Future & Options
The Tips & Strategies for the Future & Options Market are provided in this Stock Futures Service.
Monthly: 5000/-
BTST/STBT
If you are looking for just one or two trade with a return of 3-4%, then this is the service. Everyday one or two (includes both Cash and F&O) recommendation will be sent through SMS around 3.00pm.
Monthly : 2500/-
Options Hedging
For Traders willing to risk less and invest less we have launched a service purely for Options (call & Put) players.
Monthly: 2500/-
Index Premium
For trader who are will to take calculated risk on investment. We have launched this service Nifty traders. Index Premium includes trading tips on Nifty Future, Bank Nifty & CNX IT.
Monthly: 3000/-
Real Time Trading
The services will be through Yahoo Messenger or SMS, where we will tell you to buy or sell . This scheme is mainly for skilled, Smart / Position and Volume Day Traders. Main feature of this scheme are as under:
Service Include:
o Pre market call and during the markets hrs call.
o BTST Call.
o Nifty future call.
o Option with Hedging Strategy .
o Long Position with Hedging Strategy
o Delivery based portfolio services.
o End of the day position follow up.
Monthly: 15000/-
For Franchisee Enquiry Contact Yashwant @ 09329066969
For Further DetailsVisit At Our Website : www.turningpoint.net.in
Mail At : turningpointind2000@yahoo.com
Call Us : 09329066969
PAYMENT DETAILS......
All Subscription fees payable in advance in Saving Account in the name of Yashwant
PNB BANK : Account No. 2206000100048838
BANK OF RAJASTHAN: Account No. 710101425049
IMP DISCLAIMER
DISCLOSURE: As an investment and trading consultant my clients may or may not have positions in above-mentioned stocks. I personally, my family, relatives and friends also may or may not have positions in above-mentioned stocks.DISCLAIMER: Contents of this web page have been given in good faith and purely with an independent view. Readers are strictly advised to use this information at their own risk. It is not an offer to act on this information or buy, sell or hold securities. Author would not be liable for any loss or profit arising out of readers acting on the information provided herein because trading in securities carries its inherent Risks. Readers are advice to take their positions on one's own judgment. Fees once paid shall not be returned.
The Fibonacci Sequence
The Fibonacci Sequence Purpose
To appreciate and investigate a numerical pattern; to look for evidence of mathematical patterns in nature.Context
In this lesson, students will explore the Fibonacci sequence. They will identify the pattern among the Fibonacci numbers, look for applications of these numbers, and explore the ways that this pattern can be related to objects and shapes in both the natural and designed world. Science and technology are rich and especially important contexts in which to learn the value of mathematics and to develop mathematical problem solving skills, but they are not the only ones. (Benchmarks for Science Literacy, p. 32.) This lesson uses examples from art and architecture, as well as nature, to reinforce the ideas in the central benchmarks. In grades 3-5, students should be encouraged to describe all sorts of things mathematically—in terms of numbers, shapes, and operations. In middle school, students should continue to have opportunities to reflect on the nature of patterns and relationships in a purely abstract way. Planning Ahead
Materials:
Fibonacci Sequence student E-Sheet
Fibonacci Sequence student sheet
Motivation
In a discussion, have students provide examples of patterns and some of the reasons why it might be helpful to study them. Tell students that they will investigate a numerical pattern and how it relates to the world around them.
Write the following number sequence on the blackboard: 0, 1, 1, 2, 3, 5, 8, _. Have students look at this series of numbers and allow them to guess the next number in the series. Ask students to explain the pattern or rule that they are following. You may wish to go on to the next activity before showing students the correct number. Development
Tell students that the Fibonacci sequence is a series of numbers developed by Leonardo Fibonacci as a means of solving a practical problem: Fibonacci wanted to determine the rate at which pairs of rabbits would reproduce. Refer students to the Fibonacci Sequence student E-Sheet, which will guide them through some online investigations of the Fibonacci sequence and it's appearance in nature. Some instructional suggestions regarding these resources are listed here:
Fibonacci's Rabbits, found on the Fibonacci Numbers and the Golden Section in Nature website, provides text and an illustration related to the Fibonacci sequence. You may wish to print out the page and use the text and illustration to create a student worksheet depicting the rabbit problem. Distribute the worksheet to students and have them work with a partner to draw the next 1-2 lines of rabbits. Ask students to record and share their method for solving the problem.
Honeybees and Family Trees is another example of the Fibonacci sequence.
Petals on Flowers shows how on many plants the number of petals is a Fibonacci number.
Now have students explore Solve the Puzzle of the Seashell Spiral. After students have explored the puzzle, ask them to work with a partner to generate the next two (or more) numbers in the series, allowing students to use calculators if desired. Share results as a class. Create a classroom chart of the first ten numbers in the Fibonacci sequence for future use.
Ask students to answer these questions on the student sheet:
How might knowing this number pattern be useful?
What kinds of things can the numbers in the Fibonacci sequence represent?
Tell students: Sometimes patterns and relationships are studied simply because they are interesting, and sometimes because they help solve practical problems. Number patterns also can be studied in relation to the world in which we live, in order to help us better understand it. For instance, many of the numbers in the Fibonacci sequence can be related to the things that we see around us.
Refer again to Solve the Puzzle of the Seashell Spiral. Challenge students to draw a "perfect" spiral on a blank sheet of paper. Allow students to post their drawings and explain the strategy that they used to create the spiral.
One example of the golden spiral can be found on a seashell. Have students look for other natural examples of the golden spiral in a seashell, pinecone, pineapple, or cauliflower. For more information on designing this activity, go to Fibonacci Numbers and the Golden Section in Nature. Allow students to explore the outside world to look for examples of Fibonacci numbers in seed and leaf arrangements, flowers, and other natural objects.
Ask students to revisit their answers to the following questions, adding or refining their responses based on what they have learned about patterns in nature:
How might knowing this number pattern be useful?
What kinds of things can the numbers in the Fibonacci sequence represent?
Assessment
The following activities can be used to assess student understanding:
Ask students to record their answer to the following: Why study patterns? Give an example of how understanding a numerical pattern might be useful.
Have students construct a golden spiral using the method of their choice. Then, have them write about the strategy that they used to construct the spiral and how this relates to Fibonacci numbers.
Sometimes mathematicians study patterns in shapes and numbers because they explain how the world works or because they help to solve practical problems. Can you think of how we can use the Fibonacci sequence in this way?
Collect a natural object that can be related to the Fibonacci sequence. Draw a sketch and write an explanation of how it relates to one or more of the Fibonacci numbers.
Extensions
For an additional Nature of Mathematics lesson for grades 6-8, go to the Science NetLinks lesson entitled Finding Satisfactory Solutions. In the Illuminations lesson Golden Rule, students explore the Fibonacci sequence, examine how the ratio of two consecutive Fibonacci numbers creates the Golden Ratio, and identify real-life examples of the Golden Ratio. In this lesson, students will use spreadsheet and geometry sketching programs to explore the numbers. For further examples of how the Fibonacci numbers can be related to objects in the designed world, go to the Golden Section in Art, Architecture and Music. Go to Easier Fibonacci Puzzles for activities in which students manipulate objects such as bricks (substitute blocks and conduct as a hands-on activity), dominoes, and chairs in order to find numerical patterns and solve the puzzles. All of the puzzles have Fibonacci numbers as their answer. Biographical information about Italian mathematician Leonardo Pisano, better known by his nickname, Fibonacci, can be found at the Leonardo Pisano Fibonacci page. The Fibonacci Sequence for Visual Layout, on the Art Studio Chalkboard site, explains how the Fibonacci sequence is used in composition.
Sourses www.sciencenetlinks.com
Created : 07/06/2000
To appreciate and investigate a numerical pattern; to look for evidence of mathematical patterns in nature.Context
In this lesson, students will explore the Fibonacci sequence. They will identify the pattern among the Fibonacci numbers, look for applications of these numbers, and explore the ways that this pattern can be related to objects and shapes in both the natural and designed world. Science and technology are rich and especially important contexts in which to learn the value of mathematics and to develop mathematical problem solving skills, but they are not the only ones. (Benchmarks for Science Literacy, p. 32.) This lesson uses examples from art and architecture, as well as nature, to reinforce the ideas in the central benchmarks. In grades 3-5, students should be encouraged to describe all sorts of things mathematically—in terms of numbers, shapes, and operations. In middle school, students should continue to have opportunities to reflect on the nature of patterns and relationships in a purely abstract way. Planning Ahead
Materials:
Fibonacci Sequence student E-Sheet
Fibonacci Sequence student sheet
Motivation
In a discussion, have students provide examples of patterns and some of the reasons why it might be helpful to study them. Tell students that they will investigate a numerical pattern and how it relates to the world around them.
Write the following number sequence on the blackboard: 0, 1, 1, 2, 3, 5, 8, _. Have students look at this series of numbers and allow them to guess the next number in the series. Ask students to explain the pattern or rule that they are following. You may wish to go on to the next activity before showing students the correct number. Development
Tell students that the Fibonacci sequence is a series of numbers developed by Leonardo Fibonacci as a means of solving a practical problem: Fibonacci wanted to determine the rate at which pairs of rabbits would reproduce. Refer students to the Fibonacci Sequence student E-Sheet, which will guide them through some online investigations of the Fibonacci sequence and it's appearance in nature. Some instructional suggestions regarding these resources are listed here:
Fibonacci's Rabbits, found on the Fibonacci Numbers and the Golden Section in Nature website, provides text and an illustration related to the Fibonacci sequence. You may wish to print out the page and use the text and illustration to create a student worksheet depicting the rabbit problem. Distribute the worksheet to students and have them work with a partner to draw the next 1-2 lines of rabbits. Ask students to record and share their method for solving the problem.
Honeybees and Family Trees is another example of the Fibonacci sequence.
Petals on Flowers shows how on many plants the number of petals is a Fibonacci number.
Now have students explore Solve the Puzzle of the Seashell Spiral. After students have explored the puzzle, ask them to work with a partner to generate the next two (or more) numbers in the series, allowing students to use calculators if desired. Share results as a class. Create a classroom chart of the first ten numbers in the Fibonacci sequence for future use.
Ask students to answer these questions on the student sheet:
How might knowing this number pattern be useful?
What kinds of things can the numbers in the Fibonacci sequence represent?
Tell students: Sometimes patterns and relationships are studied simply because they are interesting, and sometimes because they help solve practical problems. Number patterns also can be studied in relation to the world in which we live, in order to help us better understand it. For instance, many of the numbers in the Fibonacci sequence can be related to the things that we see around us.
Refer again to Solve the Puzzle of the Seashell Spiral. Challenge students to draw a "perfect" spiral on a blank sheet of paper. Allow students to post their drawings and explain the strategy that they used to create the spiral.
One example of the golden spiral can be found on a seashell. Have students look for other natural examples of the golden spiral in a seashell, pinecone, pineapple, or cauliflower. For more information on designing this activity, go to Fibonacci Numbers and the Golden Section in Nature. Allow students to explore the outside world to look for examples of Fibonacci numbers in seed and leaf arrangements, flowers, and other natural objects.
Ask students to revisit their answers to the following questions, adding or refining their responses based on what they have learned about patterns in nature:
How might knowing this number pattern be useful?
What kinds of things can the numbers in the Fibonacci sequence represent?
Assessment
The following activities can be used to assess student understanding:
Ask students to record their answer to the following: Why study patterns? Give an example of how understanding a numerical pattern might be useful.
Have students construct a golden spiral using the method of their choice. Then, have them write about the strategy that they used to construct the spiral and how this relates to Fibonacci numbers.
Sometimes mathematicians study patterns in shapes and numbers because they explain how the world works or because they help to solve practical problems. Can you think of how we can use the Fibonacci sequence in this way?
Collect a natural object that can be related to the Fibonacci sequence. Draw a sketch and write an explanation of how it relates to one or more of the Fibonacci numbers.
Extensions
For an additional Nature of Mathematics lesson for grades 6-8, go to the Science NetLinks lesson entitled Finding Satisfactory Solutions. In the Illuminations lesson Golden Rule, students explore the Fibonacci sequence, examine how the ratio of two consecutive Fibonacci numbers creates the Golden Ratio, and identify real-life examples of the Golden Ratio. In this lesson, students will use spreadsheet and geometry sketching programs to explore the numbers. For further examples of how the Fibonacci numbers can be related to objects in the designed world, go to the Golden Section in Art, Architecture and Music. Go to Easier Fibonacci Puzzles for activities in which students manipulate objects such as bricks (substitute blocks and conduct as a hands-on activity), dominoes, and chairs in order to find numerical patterns and solve the puzzles. All of the puzzles have Fibonacci numbers as their answer. Biographical information about Italian mathematician Leonardo Pisano, better known by his nickname, Fibonacci, can be found at the Leonardo Pisano Fibonacci page. The Fibonacci Sequence for Visual Layout, on the Art Studio Chalkboard site, explains how the Fibonacci sequence is used in composition.
Sourses www.sciencenetlinks.com
Created : 07/06/2000
Sunday, June 14, 2009
The Major Japanese Candlestick Patterns
The Major Japanese Candlestick Patterns
There are really only 12 major Candlestick patterns that need to be committed to memory. The Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All have credible probabilities of indicating correct future direction of a price move. The following dozen signals illustrate the major signals. The definition of "major" has two functions. Major in the sense that they occur in price movements often enough to be beneficial in producing a ready supply of profitable trades as well as clearly indicating price reversals with strength enough to warrant placing trades.Utilizing just the major Japanese Candlesticks trading signals will provide more than enough trade situations for most investors. They are the signals that investors should contribute most of their time and effort. However, this does not mean that the remaining patterns should not be considered. Those signals are extremely effective for producing profits. Reality demonstrates that some of them occur very rarely. Other formations, although they reveal high potential reversals, may not be considered as strong a signal as the major signals. Below is the summary of the major candlestick formations and their definitions. For free print version of signal, with pattern recognition and trading psychology - Click Here Additionally, clicking on any of the individual signals will take you to the specific trading criteria plus signal enhancements and pattern recognition for printout.
A Doji is formed when the open and the close are the same or very close. The length of the shadows are not important. The Japanese interpretation is that the bulls and the bears are conflicting. The appearance of a Doji should alert the investor of major indecision.
The Gravestone Doji is formed when the open and the close occur at the low of the day. It is found occasionally at market bottoms, but it's forte is calling market tops. The name, Gravestone Doji, is derived by the formation of the signal looking like a gravestone.
The Long-legged Doji has one or two very long shadows. Long-legged Doji's are often signs of market tops. If the open and the close are in the center of the session's trading range, the signal is referred to as a Rickshaw Man. . The Japanese believe these signals to mean that the trend has "lost it's sense of direction."
The Bullish Engulfing Pattern is formed at the end of a downtrend. A white body is formed that opens lower and closes higher than the black candle open and close from the previous day. This complete engulfing of the previous day's body represents overwhelming buying pressure dissipating the selling pressure.
The Bearish Engulfing Pattern is directly opposite to the bullish pattern. It is created at the end of an up-trending market. The black real body completely engulfs the previous day's white body. This shows that the bears are now overwhelming the bulls.
The Dark Cloud Cover is a two-day bearish pattern found at the end of an upturn or at the top of a congested trading area. The first day of the pattern is a strong white real body. The second day's price opens higher than any of the previous day's trading range.
The Piercing Pattern is a bottom reversal. It is a two candle pattern at the end of a declining market. The first day real body is black. The second day is a long white body. The white day opens sharply lower, under the trading range of the previous day. The price comes up to where it closes above the 50% level of the black body.
Hammer and Hanging-man are candlesticks with long lower shadows and small real bodies. The bodies are at the top of the trading session. This pattern at the bottom of the down-trend is called a Hammer. It is hammering out a base. The Japanese word is takuri, meaning "trying to gauge the depth".
The Morning Star is a bottom reversal signal. Like the morning star, the planet Mercury, it foretells the sunrise, or the rising prices. The pattern consists of a three day signal.
The Evening Star is the exact opposite of the morning star. The evening star, the planet Venus, occurs just before the darkness sets in. The evening star is found at the end of the uptrend.
A Shooting Star sends a warning that the top is near. It got its name by looking like a shooting star. The Shooting Star Formation, at the bottom of a trend, is a bullish signal. It is known as an inverted hammer. It is important to wait for the bullish verification. Now that we have seen some of the basic signals, let's take a look at the added power of some of the other formations.
There are really only 12 major Candlestick patterns that need to be committed to memory. The Japanese Candlestick trading signals consist of approximately 40 reversal and continuation patterns. All have credible probabilities of indicating correct future direction of a price move. The following dozen signals illustrate the major signals. The definition of "major" has two functions. Major in the sense that they occur in price movements often enough to be beneficial in producing a ready supply of profitable trades as well as clearly indicating price reversals with strength enough to warrant placing trades.Utilizing just the major Japanese Candlesticks trading signals will provide more than enough trade situations for most investors. They are the signals that investors should contribute most of their time and effort. However, this does not mean that the remaining patterns should not be considered. Those signals are extremely effective for producing profits. Reality demonstrates that some of them occur very rarely. Other formations, although they reveal high potential reversals, may not be considered as strong a signal as the major signals. Below is the summary of the major candlestick formations and their definitions. For free print version of signal, with pattern recognition and trading psychology - Click Here Additionally, clicking on any of the individual signals will take you to the specific trading criteria plus signal enhancements and pattern recognition for printout.
A Doji is formed when the open and the close are the same or very close. The length of the shadows are not important. The Japanese interpretation is that the bulls and the bears are conflicting. The appearance of a Doji should alert the investor of major indecision.
The Gravestone Doji is formed when the open and the close occur at the low of the day. It is found occasionally at market bottoms, but it's forte is calling market tops. The name, Gravestone Doji, is derived by the formation of the signal looking like a gravestone.
The Long-legged Doji has one or two very long shadows. Long-legged Doji's are often signs of market tops. If the open and the close are in the center of the session's trading range, the signal is referred to as a Rickshaw Man. . The Japanese believe these signals to mean that the trend has "lost it's sense of direction."
The Bullish Engulfing Pattern is formed at the end of a downtrend. A white body is formed that opens lower and closes higher than the black candle open and close from the previous day. This complete engulfing of the previous day's body represents overwhelming buying pressure dissipating the selling pressure.
The Bearish Engulfing Pattern is directly opposite to the bullish pattern. It is created at the end of an up-trending market. The black real body completely engulfs the previous day's white body. This shows that the bears are now overwhelming the bulls.
The Dark Cloud Cover is a two-day bearish pattern found at the end of an upturn or at the top of a congested trading area. The first day of the pattern is a strong white real body. The second day's price opens higher than any of the previous day's trading range.
The Piercing Pattern is a bottom reversal. It is a two candle pattern at the end of a declining market. The first day real body is black. The second day is a long white body. The white day opens sharply lower, under the trading range of the previous day. The price comes up to where it closes above the 50% level of the black body.
Hammer and Hanging-man are candlesticks with long lower shadows and small real bodies. The bodies are at the top of the trading session. This pattern at the bottom of the down-trend is called a Hammer. It is hammering out a base. The Japanese word is takuri, meaning "trying to gauge the depth".
The Morning Star is a bottom reversal signal. Like the morning star, the planet Mercury, it foretells the sunrise, or the rising prices. The pattern consists of a three day signal.
The Evening Star is the exact opposite of the morning star. The evening star, the planet Venus, occurs just before the darkness sets in. The evening star is found at the end of the uptrend.
A Shooting Star sends a warning that the top is near. It got its name by looking like a shooting star. The Shooting Star Formation, at the bottom of a trend, is a bullish signal. It is known as an inverted hammer. It is important to wait for the bullish verification. Now that we have seen some of the basic signals, let's take a look at the added power of some of the other formations.
Wednesday, June 10, 2009
S&P may downgrade India's rating
S&P may downgrade India's rating.....
Global rating agency Standard & Poor's said it may downgrade India's sovereign rating, if external liquidity condition weakens further and fiscal deficit worsens, which may dampen investors' confidence in Indian economy.
"Any further fiscal slippage, or a marked decline in external liquidity indicators, or policy measures that weaken economic growth prospects could lead to a downgrade of the ratings," S&P said in a report.
Currently, the agency assigns 'BBB-' to India, which is the lowest rung of investment grade.
The rating agency expects large fiscal deficits of 11.1 per cent of GDP this fiscal year, including oil and fertilizer bonds, which are not counted in fiscal deficit as of now.
In this context, the full budget for fiscal 2009-2010, which is expected to be announced by the end of July, will be a good indicator of the Government's near-term economic and fiscal policies, it added.
Indian Express news
Global rating agency Standard & Poor's said it may downgrade India's sovereign rating, if external liquidity condition weakens further and fiscal deficit worsens, which may dampen investors' confidence in Indian economy.
"Any further fiscal slippage, or a marked decline in external liquidity indicators, or policy measures that weaken economic growth prospects could lead to a downgrade of the ratings," S&P said in a report.
Currently, the agency assigns 'BBB-' to India, which is the lowest rung of investment grade.
The rating agency expects large fiscal deficits of 11.1 per cent of GDP this fiscal year, including oil and fertilizer bonds, which are not counted in fiscal deficit as of now.
In this context, the full budget for fiscal 2009-2010, which is expected to be announced by the end of July, will be a good indicator of the Government's near-term economic and fiscal policies, it added.
Indian Express news
Tuesday, June 9, 2009
India Stocks Rise to 10-Month High on Economic Outlook
India Stocks Rise to 10-Month High on Economic Outlook
BLOOMBERG NEWS
BLOOMBERG NEWS
By Rajhkumar K Shaaw
June 9 (Bloomberg) -- Indian stocks rose to a 10-month high, led by Larsen & Toubro Ltd., after Prime Minister Manmohan Singh said the economy can rebound to a 9 percent growth rate amid the global recession.
Larsen & Toubro, India’s biggest engineering company, surged 6.3 percent, while Jaiprakash Associates Ltd., the largest builder of dams, climbed 8.1 percent after Singh said there is “maneuverability” on roads and ports. Tata Consultancy Services Ltd. led software providers higher after Satyam Computer Services Ltd. said it was profitable before its former chairman disclosed a $1 billion fraud in January.
“People are betting on a good recovery and earnings growth,” said S. Krishnakumar, vice-president of equities at Sundaram BNP Paribas Asset Management Co. Ltd. in Chennai, who manages $420 million. “If that were to materialize, then markets would go higher.”
The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 461.08, or 3.1 percent, to 15,127, the highest since Aug. 12. The S&P CNX Nifty Index on the National Stock Exchange advanced 2.7 percent to 4,550.95. The BSE 200 Index added 3.1 percent to 1,836.78.
DLF Ltd., the nation’s largest developer, jumped 10 percent to 402.65 rupees, and Larsen & Toubro added 6.3 percent to 1,572.80 rupees. Jaiprakash advanced 8.1 percent to 224.20 rupees.
The economy grew at more than 9 percent in three of the past four years and may expand at 7 percent in the current fiscal year, Singh said. Gross domestic product expanded 5.8 percent in the three months to March 31, beating the 5 percent median forecast in a Bloomberg News survey of economists.
Satyam
Satyam surged by the 10 percent daily limit to 66.80 rupees after it reported 1.6 billion rupees ($33.6 million) profit for the quarter ended Dec. 31.
Hyderabad, India-based Satyam made the first public disclosure of earnings estimates since former Chairman Ramalinga Raju said in January he inflated the software provider’s assets by more than $1 billion, prompting India’s biggest corporate fraud probe.
The accuracy of the results cannot be guaranteed as the financial figures stretching back to 2000 have yet to be verified by an independent auditor, the company said in a statement to the National Stock Exchange.
Among other software companies, Tata Consultancy Services, the largest software services provider, jumped 5.4 percent to 782.15 rupees, Infosys Technologies Ltd., the second-biggest, rose 3 percent to 1,794.8, and Wipro Ltd., the No. 3, advanced 4.4 percent to 423.60.
The U.S. government’s plans to boost funding for banks will help software service providers and they are expected to do well over the next 12 months, Krishnakumar said.
Tech Mahindra Ltd., which bought a controlling stake in Satyam in April, soared 26 percent to 744 rupees.
The following were among the most active stocks on the exchange:
Refiners: Indian Oil Corp. (IOCL IN), the nation’s biggest state-owned refiner, declined 4.6 percent to 553.25 rupees. Bharat Petroleum Corp. (BPCL IN), the second-biggest, fell 3.3 percent to 448.30 rupees and Hindustan Petroleum Corp. (HPCL IN) tumbled 2.2 percent to 322.50 rupees.
Refiners fell after Economic Times reported that the government may defer lifting curbs on retail prices of gasoline and diesel. Removing the curbs will enable refiners to profit from crude’s 54 percent advance this year.
“The cabinet will take a decision,” Oil Secretary R.S. Pandey said by telephone from New Delhi today. “It is they who will decide if fuel prices can be freed with crude oil at these levels.”
Pantaloon Retail India Ltd. (PF IN) rose 3.7 percent to 310.55 after the Mint newspaper reported TPG is leading a race to buy less than 15 percent of India’s biggest publicly traded supermarket operator. Kishore Biyani, managing director of Pantaloon, didn’t immediately respond to a mobile-phone text message seeking comment. Spokesman Atul Takle couldn’t be contacted immediately.
Unitech Ltd. (UT IN), India’s second biggest developer, added 5.5 percent to 88.55 rupees after it was raised to “neutral” from “sell” at MF Global Sify Securities Pvt. in Mumbai, which cited an improvement in liquidity and demand.
To contact the reporters on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net
Monday, June 8, 2009
See high risk in entering equities now: Marc Faber
See high risk in entering equities now: Marc Faber
Marc Faber, Investment Guru, www.gloomboomdoom.com, sees a high risk in entering equities now. "This is not a good time to enter equities, except for traders."
He has booked some profits in Asia and finds valuations there reasonable.
According to Faber, India has good growth potential, but was quick to add that economic, political uncertainty remains.
He does not see attractive entry points for commodities currently.
Q: In the last few days, global markets have sort of been ranging. Do you see this as a consolidation before another leg of the upmove or is it just tiring out?
A: I would say that the entry point for people who want to buy equities around the world is a high risk entry point because the global economy has bottomed out. There is little potential to grow very strongly. So, there will be disappointments in terms of earnings in the second half of 2009. The gravy is a bit out of markets. India was below 8,000 on the Sensex and has gone up almost 100%. I don’t think it is a very good time to make an entry into the markets except for traders.
Q: Till Friday last week, the Dow had almost reversed all its losses in 2009. How would you map the second half of this year?
A: In the long-term, the dollar would be a weak currency. But we have a lot of volatility and can go either way. No paper currency is very desirable. That is the problem.
Q: If you had positions in Asian equities at this point, would you be taking profits or would you remain invested?
A: I have taken some money off the table. In Asia, we have lots of stock markets and lots of stocks that have reasonable valuation. I wouldn’t say very cheap, but reasonable valuation. If you have a long-term time horizon and have cash flow whereby you can buy more shares if they should go down, then I would say hold them. But as a trader, I think as of today I would rather sell than buy.
Q: Where does India fit-in in that valuation spectrum? Do you agree with the theory that has been put forth that India now deserves a premium to other emerging markets or maybe even Asian markets?
A: I think that India has of course good growth potential, but there are still lots of uncertainty, both political and economic. As a trader, I would rather sell India than buy it. But as a long-term investor, I would hold here in India.
Q: Do you think commodities are also about to top out? If you look at crude and even metals, would you be taking profits here if you had positions?
A: Yes, I have had positions. Many resource stocks have more than doubled from the lows. Some have even tripled. I don’t think that it is a very attractive entry point to buy these commodities and commodity-related stocks.
Oil is up almost 100% from the lows. The demand for oil is still rising but not as much as before. There is plenty of flight. So, I just don’t think it is a very good time to buy.
Published on Mon, Jun 08, 2009 at 09:42 , Updated at Mon, Jun 08, 2009 at 21:54 Source : CNBC-TV18
Saturday, June 6, 2009
Week Ahead..
GreatTips www.GreatTipsIndia.com
Updated: June 05, 2009 at 23:15
WEEK AHEAD
Market still have some steam left to take the Nifty to 4800 levels ahead.
NIFTY RANGE:4400-4800 CRUCIAL SUPPORT:4470 CRUCIAL RESISTANCE:4660
STRATEGY: Investors to be very stock-specific in their approach.
Sectors to stay away from:
Shipping & Metal Stocks
How to approach mid-caps:
Many mid-caps were still away from their 2008 highs. Stocks have corrected by anywhere from 70% to 90%, but if you look at the quantum of appreciation that has taken place over the past two-three months, that certainly causes a bit of a concern and does raise a red flag.
There were still many companies in the mid-cap and small-cap companies that still traded at 0.5–0.6 times price-to-earnings (PE) ratio. The valuations are still out of whack. If you stretch the imagination a little bit and see what the real earning capabilities of these companies is, valuations are still quite attractive.
Corporate events could be the key to in their fundamentals. If a mid-cap company is able to raise a qualified institutional placement (QIP) or get some capital into the company either by the promoters or by the foreign institutional investors (FIIs), it will make a big difference to what profitability it can post.
· TECHNICALLY:
Possibility of the Nifty breaching 4200–4300 was slim as there was enough money in the market chasing performance. We have seen the global emerging markets allocation having upped the India exposure. In the pervious year, they were neutral to negative and now they have upped the India exposure.
It is seen that, it is a natural pause. We are not getting any correction at all and we are seeing a situation where for a few days there is a sideways movement and again there is a bump-up in stocks, if you observe the broader indices: the Nifty and the Sensex. It appears to be a sideways movement on the broader indices but the undercurrent is extremely strong.
Trade will remain range-bound next week with sectoral rotation on the cards as investors churn their portfolio. The market is currently in an overbought zone so we would like to maintain a cautious approach. The market is expected to trade in the 4400-4800 range.
Trade was dictated by the technical on Friday even as the global markets looked firm. Nifty had a resistance of 4620 which it managed to cross but traders used the opportunity to close long positions pulling the indices lower. Outlook for the market is positive till budget is out but time-to-time correction cannot be ruled out.
Key benchmark indices are likely to consolidate as some profit booking might emerge after witnessing a stupendous rally in the past thirteen weeks. However a lot would also depend on global cues, foreign funds flows and the progress of monsoon.
· GLOBAL EVENTS:
On the overseas front, investors will keenly await the US non-farm payrolls data for May, which will be announced later Friday. Weekly jobless claims data Thursday raised hopes that the jobs figures will not be as bad sparking a rally across global markets ahead of the declaration.
· PSUs IN ACTION:
There are about a dozen listed PSUs in which the government’s stake is between 90 and 99%. The dilution of stakes in such PSUs will be one of the major initiatives of the new disinvestment policy expected to be announced in the Union Budget for 2009-10 in the first week of July.
· SENTIMENTS:
However the broad sentiment on the stock Market is likely to remain firm following upgrade in earnings of India Inc as thumping victory of the Congress-led United Progressive Alliance (UPA) in the 15th Lok Sabha elections means political stability for the next five years.
· PRE-BUDGET RALLY:
Market may even see a pre-budget rally on hopes of accelerated economic reforms and pro-reforms announcements. Finance Minister Pranab Mukherjee will present the Union Budget on 3 July 2009 while Railway Minister Mamata Banerjee will present the Rail Budget on 1 July 2009. The Economic Survey will be held on 2 July 2009. The Union Budget 2009 attains significant importance in the wake of the global financial crisis. Despite the country being relatively unharmed compared to the West, the UPA government will have many tasks on its to-do list, which includes boosting growth and demand, continuing to maintain liquidity, balancing inflation and also containing the country's worrying fiscal situation.
The Government has made its intention clear to push for reforms and pursue the disinvestment agenda, which was met with stiff opposition in the UPA's previous stint when the Left parties were members for a major part of the five-year tenure. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on backburner due to stiff opposition from the Left front.
Also the passage of the Bill to amend the Insurance Act, 1938 is likely to be touched upon in the full Budget likely to be announced in the first week of July 2009. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.
· PRESIDENTS ADDRESS:
While addressing to a joint session of both houses on 4 June 2009 President Pratibha Patil disclosing the agenda of the UPA coalition government said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list share of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.
Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.
On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.
· ECONOMIC REFORMS:
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years. The minister said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.
· INSTITUTIONAL ACTION:
Foreign institutional investors (FII) were the key drivers of the recent solid surge. After being heavy net sellers of Rs 4250.30 crore in January 2009 and to the tune of Rs 2707 crore in February 2009, foreign fund selling eased in March 2009, when they tuned net sellers of only Rs 1.1 crore. Their buying gathered steam in April 2009 when they pumped Rs 7384.50 crore. They continue their buying spree in May 2009 pouring Rs 20,606.80 in equities. Their inflow in calendar year 2009 stood at Rs 21,818.80 crore till 3 June 2009. Meanwhile, mutual funds, which are sitting on a large cash pile, are also likely to buy on dips.
· MONSOON:
Meanwhile annual monsoon rains may further advance to more parts during the next 48 hours, India Meteorological Department (IMD), said on its website late on Thursday, 4 June 2009. Monsoon rains, which hit the country's mainland on 23 May 2009 ahead of its normal schedule of 1 June 2009, encountered a weak phase in the last week of May 2009.
The IMD on 17 April 2009 forecast a near normal monsoon this year saying rainfall in the June-September 2009 monsoon season is expected to be 96% of the long-term average. The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.
· RESULTS:
Jaiprakash Associates, Divi's Laboratories, Indiabulls Financial Services, Sadbhav Engineering, CESC will unveil their March 2009 quarterly earnings in the forthcoming week. Aggregate results of 2157 firms showed net profit rose 27.90% on 0.7% rise in sales in q4 march 2009 over q4 march 2008.
IN-A-NUTSHEL:
The outlook still remains optimistic, but caution should be maintained at higher levels as huge profit booking cannot be ruled out. Nifty faces very strong resistance at 4660, which happens to be the top of Aug 12, 2008 from where markets witnessed a significant downfall. What we believe at this current juncture is that the upside is very limited and one should play along with trend with limited profile. The Nifty will remain in the range of 4400-4800.
Disclosures/Disclaimers:The Calls/materials contained/made herein are for information purpose and are not recommendation to any person to buy or sell any securities. The information is derived from sources, that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their action. We may or may not have any position in given stock. If any other entity, individual or service provider also giving the same script and recommendation than we are not responsible for that. By continuing to read or referring to material contained, you have read and agreed to the disclosure & disclaimers mentioned & published at :
Updated: June 05, 2009 at 23:15
WEEK AHEAD
Market still have some steam left to take the Nifty to 4800 levels ahead.
NIFTY RANGE:4400-4800 CRUCIAL SUPPORT:4470 CRUCIAL RESISTANCE:4660
STRATEGY: Investors to be very stock-specific in their approach.
Sectors to stay away from:
Shipping & Metal Stocks
How to approach mid-caps:
Many mid-caps were still away from their 2008 highs. Stocks have corrected by anywhere from 70% to 90%, but if you look at the quantum of appreciation that has taken place over the past two-three months, that certainly causes a bit of a concern and does raise a red flag.
There were still many companies in the mid-cap and small-cap companies that still traded at 0.5–0.6 times price-to-earnings (PE) ratio. The valuations are still out of whack. If you stretch the imagination a little bit and see what the real earning capabilities of these companies is, valuations are still quite attractive.
Corporate events could be the key to in their fundamentals. If a mid-cap company is able to raise a qualified institutional placement (QIP) or get some capital into the company either by the promoters or by the foreign institutional investors (FIIs), it will make a big difference to what profitability it can post.
· TECHNICALLY:
Possibility of the Nifty breaching 4200–4300 was slim as there was enough money in the market chasing performance. We have seen the global emerging markets allocation having upped the India exposure. In the pervious year, they were neutral to negative and now they have upped the India exposure.
It is seen that, it is a natural pause. We are not getting any correction at all and we are seeing a situation where for a few days there is a sideways movement and again there is a bump-up in stocks, if you observe the broader indices: the Nifty and the Sensex. It appears to be a sideways movement on the broader indices but the undercurrent is extremely strong.
Trade will remain range-bound next week with sectoral rotation on the cards as investors churn their portfolio. The market is currently in an overbought zone so we would like to maintain a cautious approach. The market is expected to trade in the 4400-4800 range.
Trade was dictated by the technical on Friday even as the global markets looked firm. Nifty had a resistance of 4620 which it managed to cross but traders used the opportunity to close long positions pulling the indices lower. Outlook for the market is positive till budget is out but time-to-time correction cannot be ruled out.
Key benchmark indices are likely to consolidate as some profit booking might emerge after witnessing a stupendous rally in the past thirteen weeks. However a lot would also depend on global cues, foreign funds flows and the progress of monsoon.
· GLOBAL EVENTS:
On the overseas front, investors will keenly await the US non-farm payrolls data for May, which will be announced later Friday. Weekly jobless claims data Thursday raised hopes that the jobs figures will not be as bad sparking a rally across global markets ahead of the declaration.
· PSUs IN ACTION:
There are about a dozen listed PSUs in which the government’s stake is between 90 and 99%. The dilution of stakes in such PSUs will be one of the major initiatives of the new disinvestment policy expected to be announced in the Union Budget for 2009-10 in the first week of July.
· SENTIMENTS:
However the broad sentiment on the stock Market is likely to remain firm following upgrade in earnings of India Inc as thumping victory of the Congress-led United Progressive Alliance (UPA) in the 15th Lok Sabha elections means political stability for the next five years.
· PRE-BUDGET RALLY:
Market may even see a pre-budget rally on hopes of accelerated economic reforms and pro-reforms announcements. Finance Minister Pranab Mukherjee will present the Union Budget on 3 July 2009 while Railway Minister Mamata Banerjee will present the Rail Budget on 1 July 2009. The Economic Survey will be held on 2 July 2009. The Union Budget 2009 attains significant importance in the wake of the global financial crisis. Despite the country being relatively unharmed compared to the West, the UPA government will have many tasks on its to-do list, which includes boosting growth and demand, continuing to maintain liquidity, balancing inflation and also containing the country's worrying fiscal situation.
The Government has made its intention clear to push for reforms and pursue the disinvestment agenda, which was met with stiff opposition in the UPA's previous stint when the Left parties were members for a major part of the five-year tenure. The Congress party had in its manifesto released before polls promised to go ahead with disinvestment while retaining a majority holding in the state-run companies. Disinvestment programme was earlier put on backburner due to stiff opposition from the Left front.
Also the passage of the Bill to amend the Insurance Act, 1938 is likely to be touched upon in the full Budget likely to be announced in the first week of July 2009. Apart from raising the foreign investment ceiling to 49%, from 26% at present, the Bill had proposed to do away with the stipulation on Indian promoters having to mandatorily sell a part of their holdings after 10 years of operation.
· PRESIDENTS ADDRESS:
While addressing to a joint session of both houses on 4 June 2009 President Pratibha Patil disclosing the agenda of the UPA coalition government said that the government would aim to revive economic growth with higher investments in sectors such as infrastructure, while adhering to fiscal prudence. Patil said steps would be taken to encourage foreign investment inflows, list share of state-run firms and infuse more capital in banks. The government's immediate priority must be to focus on management of the economy that will counter the effect of the global slowdown, she added.
Patil said the new regime will develop a roadmap for listing public sector units, co-ordinate with other countries to bring back illegal money stashed in secret bank accounts, recapitalise public sector banks, and bring in the pension reforms bill.
On the economic front, the government's immediate focus would be on sectors that are adversely hit, especially small and medium enterprises, exports, textiles, commercial vehicles, infrastructure and housing.
· ECONOMIC REFORMS:
Finance Minister Pranab Mukherjee on 26 May 2009 said that a sustained stimulus to economic growth is possible by next round of reforms. He said reviving growth momentum is a top priority for the government adding that fiscal prudence will also be kept in mind.
Mukherjee said the government will stick to fiscal deficit target of 5.5% of GDP in the current financial year that ends on March 2010 (FY 2010). He said the government is committed to fiscal consolidation in 2-3 years. The minister said he would be able to announce the full-budget for FY 2010 by the first week of July 2009 and try to get it approved by 31 July 2009. He said the common man will be the focus of the government policy.
· INSTITUTIONAL ACTION:
Foreign institutional investors (FII) were the key drivers of the recent solid surge. After being heavy net sellers of Rs 4250.30 crore in January 2009 and to the tune of Rs 2707 crore in February 2009, foreign fund selling eased in March 2009, when they tuned net sellers of only Rs 1.1 crore. Their buying gathered steam in April 2009 when they pumped Rs 7384.50 crore. They continue their buying spree in May 2009 pouring Rs 20,606.80 in equities. Their inflow in calendar year 2009 stood at Rs 21,818.80 crore till 3 June 2009. Meanwhile, mutual funds, which are sitting on a large cash pile, are also likely to buy on dips.
· MONSOON:
Meanwhile annual monsoon rains may further advance to more parts during the next 48 hours, India Meteorological Department (IMD), said on its website late on Thursday, 4 June 2009. Monsoon rains, which hit the country's mainland on 23 May 2009 ahead of its normal schedule of 1 June 2009, encountered a weak phase in the last week of May 2009.
The IMD on 17 April 2009 forecast a near normal monsoon this year saying rainfall in the June-September 2009 monsoon season is expected to be 96% of the long-term average. The outlook is among the nation's most widely watched indicator as monsoon rains are a major influence on output of key crops, economic activity and also affects sentiment in the country's financial markets.
· RESULTS:
Jaiprakash Associates, Divi's Laboratories, Indiabulls Financial Services, Sadbhav Engineering, CESC will unveil their March 2009 quarterly earnings in the forthcoming week. Aggregate results of 2157 firms showed net profit rose 27.90% on 0.7% rise in sales in q4 march 2009 over q4 march 2008.
IN-A-NUTSHEL:
The outlook still remains optimistic, but caution should be maintained at higher levels as huge profit booking cannot be ruled out. Nifty faces very strong resistance at 4660, which happens to be the top of Aug 12, 2008 from where markets witnessed a significant downfall. What we believe at this current juncture is that the upside is very limited and one should play along with trend with limited profile. The Nifty will remain in the range of 4400-4800.
Disclosures/Disclaimers:The Calls/materials contained/made herein are for information purpose and are not recommendation to any person to buy or sell any securities. The information is derived from sources, that are deemed to be reliable but its accuracy and completeness are not guaranteed. The author does not accept any liability for the use of this column. Readers of this column who buy or sell securities based on the information in this column are solely responsible for their action. We may or may not have any position in given stock. If any other entity, individual or service provider also giving the same script and recommendation than we are not responsible for that. By continuing to read or referring to material contained, you have read and agreed to the disclosure & disclaimers mentioned & published at :
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