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Markets – What a pullback?

Thursday, November 22, 2007 Leave a comment Go to comments

In Indian markets,the bulls always manage to claw back in the end. So today also, the bulls managed to asset themselves after being on the back foot for most of the session. The closing was well above the 5470 levels and this might put a little doubt in the minds of the bears.

What is this market action telling us? It tells us that this market is still “long term bullish”. It also tells us that chasing performance in hot stocks might not be the best way to approach these markets. Also one needs to be mentally prepared for lot of volatility on the portfolios. It might be normal for stocks to go up 40-50% and then give back 10-20% in a quick time.

This is a good time to churn your portfolio and approach your investments in a more “systematic way”. Just doing “random” trades won’t lead you anywhere. So think about the annualized returns which you want from your investments in next 3 years and then plan accordingly. I am still finding many stocks which continue to do exceedingly well without hogging much limelight in the media. The journey onwards might be “stock specific”, so one needs to work even harder to be in the right stocks.

Short term trading has become extremely difficult and challenging. Those who don’t know “how to take losses” or live on a dose of “hope” are better off in avoiding short term trading on high leverage.The markets shall throw out such participants from time to time.

As US markets are closed on the eve of holiday, local guys might have a bigger role to play for next 1-2 sessions. I would be closely watching SBI,Reliance Capital and GMR infrastructure in the coming trading sessions.

Its next to impossible to take a call on NIFTY till this volatility persists. Till NIFTY gets back above 5700 levels, people might be reluctant to build aggressive longs again.

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  1. sagecapital
    Friday, November 23, 2007 at 10:05 pm

    Amit- The whole market is so volatile and trying to find its feet. Rather than sector moves, we are keeping an eye on stock specific moves.
    Banking sector though looks a little more stronger than the rest.

  2. sagecapital
    Friday, November 23, 2007 at 10:01 pm

    Manish-The stock was at 30 bucks in August 2006 and is currently at 18 bucks.
    if the stock is so good, why is it going down so badly?
    I’d avoid the stock and SELL on every rise.

  3. amit
    Friday, November 23, 2007 at 9:57 pm

    If power sector loosing stream then which one you suggest could/would be gaining!?

    thanks
    Amit

  4. Friday, November 23, 2007 at 7:32 pm

    what is the future of manali petro?will it cross RS30/- soon, within one month?it is a divident paying company.

  5. Rajesh Sharma
    Friday, November 23, 2007 at 4:44 pm

    Dear Sage,

    What is the future of IFCI,Aravali finance and Saamya Biotech.

    Regards

    Rajesh

  6. sagecapital
    Friday, November 23, 2007 at 9:03 am

    Power sector is losing steam-be it Tata Power or REL or CESC.

  7. Gautham
    Friday, November 23, 2007 at 8:38 am

    What’s your take on retail sector? Could Pantaloon be a good bet for the next quarter?

    And I saw a report on CESC. I wasn’t convinced. How about you?

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