Are We Readying For A Sustainable Rally?
It was a chance conversation with my stockbroker the other day that set the alarm bells ringing. Quite suprisingly even as the Sensex ripped in a 1000 point rally in four days flat most retail clients ran credit balances with zero holdings in demat accounts. This suggests that the bear market of the past 18-19 months has either reduced everyone to penury, with zero cash to buy but worse not much of the Retail fraternity holds on to any stock.
So how can the market continue to fall, when one section of the investing community is no longer a participant. The real sources of supply of equities are now coming in from leveraged investors or the hedge fund/FII variety from overseas.
Most of these investors are selling as they need bail-out in their own markets and not for any fundamental reason. Fortunately, the domestic FIs and Insurers are picking up the slack being left behind by the exiting FIIs and Retail investors. I think sentiment is at the worst possible level and we have an opportunity being made available to us..so go long top quality names in the business with little or zero debt.
The New York Times reports that the Conference Board's consumer expectation index recently hit its second-lowest level ever. "The amount of optimism that things will get better is as low as it has been in the four decades that the Conference Board has been asking questions." -- The New York Times
It was a chance conversation with my stockbroker the other day that set the alarm bells ringing. Quite suprisingly even as the Sensex ripped in a 1000 point rally in four days flat most retail clients ran credit balances with zero holdings in demat accounts. This suggests that the bear market of the past 18-19 months has either reduced everyone to penury, with zero cash to buy but worse not much of the Retail fraternity holds on to any stock.
So how can the market continue to fall, when one section of the investing community is no longer a participant. The real sources of supply of equities are now coming in from leveraged investors or the hedge fund/FII variety from overseas.
Most of these investors are selling as they need bail-out in their own markets and not for any fundamental reason. Fortunately, the domestic FIs and Insurers are picking up the slack being left behind by the exiting FIIs and Retail investors. I think sentiment is at the worst possible level and we have an opportunity being made available to us..so go long top quality names in the business with little or zero debt.
The New York Times reports that the Conference Board's consumer expectation index recently hit its second-lowest level ever. "The amount of optimism that things will get better is as low as it has been in the four decades that the Conference Board has been asking questions." -- The New York Times
Even worse -- a staggering 70% of respondents said they expected the market to continue its slide in the coming year. Only six times in the history of the Conference Board's survey have investors been so uniformly down on the market. And that's no surprise really, given the never-ending stream of negativity blaring from our televisions and spewing out of Washington. So, just how much worse did the market get for U.S. investors in the years following those past moments of extreme market pessimism?
The answer may shock -- even anger -- you.
Before I lay out the hard-and-fast numbers... along with what I think you'll agree is a reasoned plan of action for right now... let's consider how we got to this moment of extreme despair in the first place. An unprecedented crisis... of confidence
By that, I don't mean to imply that the damage inflicted on the credit markets and the resulting blow to the broader global economy are imagined. They are real. So, too, are the devastating hits that even prudent U.S. investors have taken to their personal net worths over the past 18 months. Me included. I won't lie to you...I underestimated the severity and duration of the U.S. financial crisis and ensuing stock market sell-off. On paper, at least, I paid a stiff price. Even worse...
My confidence in U.S. stocks was severely tested. And because of that, I almost made a tragic mistake. In short, I was afraid. As I imagine you may be, too. Truth be told, it took some stern words -- from the lips of three of the world's most successful investors -- to set me straight. For this I owe a sincere debt of gratitude I'd like to pay forward to you right now.
In return, I ask simply that you repeat after me: "What's done is done." Please, indulge me this once. Say it out loud, What's done is done. All that matters now is what we do now. It can mean the difference between looking back on this historic moment in anguish -- and seizing the once-in-a-generation opportunity standing before us. Are you with me? Great!
"People say they're afraid of a stock market crash. Well, we've already had a crash. Look at the numbers." Those are the words of Peter Lynch, legendary former manager of Fidelity Magellan Fund. Lynch, you may recall, earned his shareholders life-changing returns of 29% per year over more than a decade running Fidelity Magellan.
Returns like that essentially double your money every 2.5 years. So you'll forgive Lynch for coming off a bit glib when he declares that stock market bargains are so plentiful now, "you feel like a mosquito in a nudist colony."
And by no means should we underestimate the urgency and wisdom of what Lynch is telling us. Namely, that a market crash is NOT the REAL THREAT to our wealth right now. Peter Lynch is one of the three investors I mentioned earlier whose words got me through my own crisis of confidence. The others are John Bogle, founder of Vanguard, and none other than Warren Buffett, arguably the most successful investor in history.
(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)
Strong & Weak futures
This is list of 10 strong futures:
This is list of 10 strong futures:
Rolta, Essar Oil, Housing Dev, JSW Steel, Tata Motors, Hind Oil, Gitanjali Gems, Tata Steel, Suzlon Energy & Kpit.
And this is list of 10 Weak Futures:
Hind Petrol, Hind Unilvr, PFC, Sterling Bio, Educomp, BPCL, Divi'S Lab, Power Grid, Colpal & Glaxo.
Nifty is in Up Trend.
Nifty is in Up Trend.
NIFTY & SENSEX SPOT LEVELS FOR 15TH APRIL
 | 3382.60 | ( 1.21 %) | 40.55 |  |
| 1 | 2 | 3 | ||
| Resistance | 3422.22 | 3461.83 | 3505.87 | |
| Support | 3338.57 | 3294.53 | 3254.92 | |
 | 10967.22 | ( 1.51 %) | 163.36 | | |
| 1 | 2 | 3 | |||
| Resistance | 11090.89 | 11214.57 | 11359.59 | ||
| Support | 10822.19 | 10677.17 | 10553.49 | ||
FII DATA
| FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| FII | 13-Apr-2009 | 2041.24 | 1460.75 | +580.49 |
| DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) | ||||
| Category | Date | Buy Value | Sell Value | Net Value |
| DII | 13-Apr-2009 | 844.73 | 996.98 | -152.25 |
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Arvind Parekh
VP - Coimbatore Online
Phone:+91 98432 32381
