– 101003 – We are glad to inform you that Mr.Vivek Karwa has been co-opted into the Council of Management (as a Director under rules applying for a Section 25 company) of Hindustan Chamber of Commerce, Chennai on 1/10/2010 and also has simultaneously been appointed as a Co-Chairman of the “Capital Markets” committee for the year 2010-2011. We wish to do justice to the faith shown by the chamber in Mr.Vivek Karwa by conducting as many programs as possible during the period. We are scaling into new heights only due to the motivation we get from all of you by emails and when many of you appreciate us when we usually meet.
– The market finally has broken out from the upper range of the resistance which we had first mentioned way back in Jan’10. 20200 was the target by the end of the year which has already been taken off with Sensex closing almost at 20450 on Friday. The rally is purely driven by the liquidity which is just pouring into the system.
– Today at an Investors forum investors at large were discussing that retails and domestic investors this time are showing lot of maturity and are not exuberant this time as they are cautious. The fact is, having taken the brunt last time investors this time have become extra cautious and thus exited markets at 18000 levels itself and even now everyday we find FII’s buying and the domestic institutions selling. We will discuss the strategy which could be adopted later in this page.
– The credit of last two days rally can easily be attributed to the maturity shown by the public of our country after the Ayodhya verdict. Not even single incident of violence was reported from anywhere and that really was given a thumbs up by the market. Infact majority of politicians have also shown a lot of maturity by not expressing their joy or dismay. Minority of them like Mulayam Singh Yadav and Ram Vilas Paswan (Iam sure Laloo will also join soon) tried to play vote bank politics again and didn’t find a supporter from anyone! I think they should really write themselves off from the balance sheet of Indian politics and take self retirement.
– Hence, the above factor is definitely a big positive for India, since the peace after the verdict has really sent out the positive signals to the investors across the world. Since 20200 has been broken the next natural resistance for Sensex comes at 21207 which is the all time peak. The acceleration with which Sensex is marching right now sends a signal that it may break the level very soon. But we also need to be careful.
– At the current P/E the index looks extremelyyy… costly! But the fact also remains that though the index has rallied the portfolios have not performed the same way. Even out of the 30 Sensex companies not all have gone up hence the rally has been a very narrow and concentrated one. Hence we either may see a time correction or a price correction at some point of time.
– Hence if a time correction happens then we may see catch up action by stocks which have underperformed till now and even if a price correction happens then these stocks may not fall as much since they have been under performing till now.
– Thus one can easily draw a conclusion that we should definitely be in some amount of cash and even if we want to remain invested be in good quality stocks which have not been performing.
– One such stock which we thought was good and had not performed and also had recommended here and on TV channels was Sterlite. The stock after recommending had gone up and then fell on Madras HC order for TN plant closure and again has rallied after SC has stayed the order. The stock is trading above our recommended price and we would at this point would like to recommend that investors those who bought the stock can sell. This call is only to avoid the risks which may crop up when the hearing comes in SC on 18th.
– We also would be selling on Monday only as always we practice what we preach or simply put in Warren Buffets words… We do with your Money, what we do with our Own!
– Stay connected with MarketFastFood
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(Try to always Execute calls after 10-15 mins of Market Opening)