Home > Market View > Is this becoming a stock specific market?

Is this becoming a stock specific market?

Wednesday, December 16, 2009 Leave a comment Go to comments

With the overall markets drifting sideways, this is indeed becoming a stock specific market. Take two stocks for instance- Wipro and BEL. While overall markets are doing nothing, such stocks are hitting new highs. When I had recommended BEL couple of weeks back on this blog it was around 1500 and I had a long term target of 2000 in mind. To my surprise, the stock has hit 1900 in less than a month!

Similarly, IT stocks continue to surge upwards. The primary reason for this upsurge seems to be some “certainity” about these stocks. The only uncertainity about the IT stocks are the currency moves. With dollar gaining strength and FII flows being muted, investors are more or less sure about rupee stability in the short to medium term. And with the news of US economy improving, traders are betting on these stocks and playing the short term momentum. Infact, I was myself neutral on IT stocks but the market moves force me to change my opinion.

On the other hand, banking and auto stocks are facing some uncertainty due to an imminent interest rate hike by the RBI. This might be one of the factors for loss of momentum in these sectors.

Although I am still playing the market on the long side but things are now becoming very much sector and stock specific. One negative thing is that more and more sectors are losing short term momentum. On top of it, some of the old favourites in the capital goods space like L&T and BHEL are not rising to the occasion.

My advice would be to stay in some cash  at this point of time and reduce the overall exposure. This cash will come handy to ride the next moves. I still see no reason to abandon the bullish bias till markets give a sign of breakdown.

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Categories: Market View
  1. om guru om
    Monday, December 21, 2009 at 1:49 am

    I like ur article very much. But for gaining knowledge on stock market from bottom to top, kindly suggest what to do.

  2. Vivin
    Friday, December 18, 2009 at 11:27 am

    Is this the going to be double bottom ?

    • Sunday, December 20, 2009 at 9:38 am

      I am not too sure. That is why you keep stop losses.

  3. Thursday, December 17, 2009 at 8:50 pm

    It is correct that holding cash is also a strategy. Regards
    Indian-Share-Tips.Com

  4. da_Best
    Thursday, December 17, 2009 at 5:54 pm

    Wow – you have an explanation for every move in market!

    Can you tell me what will Reliance closing price tomorrow, or maybe after a week’s time?

    • Sunday, December 20, 2009 at 9:39 am

      I don’t claim to predict the stock moves. Had that been the case, why would anyone care to keep stop losses?

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