Archives : THE BULL IS DEAD, LONG LIVE THE BEAR - 22/10/2008
THE BULL IS DEAD, LONG LIVE THE BEAR – 22/10/2008.

People often thank me for my predictions for the market and the stocks and often add that the accuracy and correctness regarding our forecasting has become almost certainty and to a great extent thus find it boring. Once again recollect what we wrote last time, I quote “The stage is now set for panic. Next Support for the Sensex is at the previous bottom support taken during the May fall two years back at 8799 and the corresponding level for the Nifty is at 2595.” This week both Sensex and Nifty reached their targets given last week.

 

HAPPY DEEPAWALI & HAPPY NEW YEAR.

FLASH BACK:

The Seeds Of The Bull Run.

The Main Culprit For The Bear Market.

Factors To Watch Out in The Indian Market.

When Will The Bear Market End?

 The Volatility will be almost non-existent and unlike now, the Index movement will be hardly a percent or two. This will kill the traders, as traders require volatility to trade. The volumes will dry up completely. The start of the Bull Run will be marked by loss of Volatility and loss of interest and loss of volume. Watch out for these signals

Sensex may well bottom out near 7427-6534 and the Nifty may well touch 2275-1893 on the lower side.

Diwali Picks for the next year:

 
SENSEX.

NIFTY.

LAST WEEKS RECOMMEDATIONS:

JUST GGREAT AS ALL STOCK RECHED THEIR TARGETS AND TRADERS MUST HAVE MINTED MONEY.

Sell Bharti 677 Tgt was 580 Reached 505.

Sell Tata Power 748 Tgt was 671 Reached 605.

Sell Bhel 1191 Tgt was 1099 Reached 1075.

Sell ABB 631 Tgt was 517 Reached 466.

Sell Hero Honda 814 Tgt was 759 Reached 722

Sell Maruti 640 Tgt was 603 Reached 512.

If one had sold 400 shares of Bharati, Tata Power, Abb, Hero Honda and Maruti and 200 shares of Bhel, then one could have earned a kewl Rs 3,03,200/- !!!

What more do you want as a Deepawali gift. 

THIS WEEK RECOMMEDATIONS:

For Full Article Click MORE.



THE BULL IS DEAD, LONG LIVE THE BEAR – 22/10/2008.

People often thank me for my predictions for the market and the stocks and often add that the accuracy and correctness regarding our forecasting has become almost certainty and to a great extent thus find it boring. Once again recollect what we wrote last time, I quote “The stage is now set for panic. Next Support for the Sensex is at the previous bottom support taken during the May fall two years back at 8799 and the corresponding level for the Nifty is at 2595.” This week both Sensex and Nifty reached their targets given last week.

 
 HAPPY DEEPAWALI & HAPPY NEW YEAR.

Samvat Year 2064 will be an incredible year as far as the market is concerned. At the start of the year the market was above 20000 and it reached an all time high level of 21206 in this year. This year saw both high and low levels as the Sensex slid from all time high levels to four digit levels. The story of the Sensex has more twists and turns than any masala Hindi film.

At the beginning of this year i.e. during previous deepawali, nobody could have guessed that the Sensex will fall to such incredible levels of sub-9000. I recollect that not even the most pessimistic critic of our market had dreamt of such disastrous levels. Really the possibilities are infinite and to achieve success believe in the infinite; so nothing will look impossible. So don’t be too surprised if you find the Sensex at sub-6000 levels or may be above 20000 levels in the next Samvat.

 FLASH BACK:The Seeds Of The Bull Run.

The seeds of the current Bull Run were sown in the year 2003, when Sensex was at 2905 to begin with. The Sensex started clearing one hurdle after another and in a very short time was challenging previous important levels. After breaking such critical levels, Sensex and Nifty gained in momentum and went ahead at a scorching pace. The next five years saw the Sensex climbing dizzy heights and achieved all time high of 21206. After an unprecedented five years of Bull Run, now we are in a strong Bear market. For the first time since July 2006 our markets had breached the levels of 10000 and have even breached critical level of 8799 on the Sensex.

The Main Culprit For The Bear Market.

The main culprit for the Bear market this time around, is the global markets. The global financial markets have collapsed like none seen before. The crisis is the greatest ever in the past century. The financial collapse started in the U.S. and spread across Europe, then Asia and across the globe. Certainly India will be affected and it is visible in the current meltdown of our stock market.

Factors To Watch Out in The Indian Market.

The main factors surrounding Indian markets are Election next year and of course the jugglery between the inflation and growth. The results are almost showing signs of slowdown, which is seen from the lowly IIP numbers. It is almost certain that the slow growth will lead us to an industrial recession. The current crisis has resulted in the RBI cutting the CRR by 250bps and Repo rate by 100bps. Still the financial problems facing the Indian markets can only be delayed by such tactics and cannot be resolved.

When Will The Bear Market End?

The question on everybody’s lips is when will the Bear market end and what is the right time to buy? The answer is not so simple, as the current Bear market will last atleast till February 2009 and may extend upto October 2009.Only after that we can expect the resumption of the Bull Market.

Bear Markets don’t end in a bang as the Bull Markets. They kill every one and then slowly move away without much hoopla. So don’t expect any V-shaped recovery. The fall in the market increases the Volatility and the Volatility right now is at its highest. The end of the Bear market will be marked by the end of Volatility as well. The Volatility then, would have subsided substantially and will gradually mark the end of the Bear market. This phase also marks an early entry by those bulls having foresight.

 The Volatility will be almost non-existent and unlike now, the Index movement will be hardly a percent or two. This will kill the traders, as traders require volatility to trade. The volumes will dry up completely. The start of the Bull Run will be marked by loss of Volatility and loss of interest and loss of volume. Watch out for these signals. Sensex may well bottom out near 7427-6534 and the Nifty may well touch 2275-1893 on the lower side.
Diwali Picks for the next year:
Dena Bank 30:
One can buy this stock around support price of 25-23. The bank is stable and reporting strong numbers. It is available at almost 2 times FY08 earnings. The stock is available at a throw away price to book value of almost 0.5. Technically one can buy this stock for a target of 56-70. The upside is almost 90 to 125%. 
IVRCL Infra 67: This is a good quality infra stock with diversification into power, transport and real estate. The conservative value of the sum of the parts of the company viz. IVR Prime, Hind Dorr, BOT projects and IVRCL standalone comes to Rs.377/ share. It is currently available at throwaway valuations of Rs 67. Buy around 58 for a target of 164-250 over a period of 12-15 months. Upside of more than 300%.
 Adlabs 157 : Adlabs is a media company with exposure in almost all sections of the media. It is already a leader in film making and distribution. The number of theatres are on the increase because of the aggressive acquisition adopted by the ADAG group. The stock has fallen from 1939 levels and is available at 8% of that price. It requires some attention as it is a safe bet in the media sector.  Buy around 135-140 range for a target of 350-485 in a 12-15 month period. Upside of more than 200%. 

SENSEX.

Sensex opened the week at 10160, made a high of 10750, made a low of 8566, and closed the week at 8701, thus registering a weekly loss of 1274 points. The indicators are extremely oversold and suggest some sort of technical pullback from lower levels.The Head and Shoulder pattern of the Sensex has a target of 7427 and the Gann angle is having a support at 6534. For the week ahead the Resistance is at 9570-9911-10239. Support is at 8431-7656-7427-6534.

NIFTY.

Nifty opened the week at 3108, made a high of 3254, low of 2525, and closed the week at 2584. The weekly loss was 490 points. The OI PCR is very low at 0.66 and this suggests the markets are extremely oversold. Heavy Call writing is seen at the strikes of 2900 and 3000. The Nifty has a target of 2275 according to the Bearish Head and Shoulder pattern. The next major support after that is at 1896.For the week ahead, the Resistance is at 2760-2973-3046-3153. Support is at 2466-2307-2275-1896. 

LAST WEEKS RECOMMEDATIONS:

JUST GGREAT AS ALL STOCK RECHED THEIR TARGETS AND TRADERS MUST HAVE MINTED MONEY.

  • Sell Bharti 677 Tgt was 580 Reached 505.
  • Sell Tata Power 748 Tgt was 671 Reached 605.
  • Sell Bhel 1191 Tgt was 1099 Reached 1075.
  • Sell ABB 631 Tgt was 517 Reached 466.
  • Sell Hero Honda 814 Tgt was 759 Reached 722
  • Sell Maruti 640 Tgt was 603 Reached 512.

If one had sold 400 shares of Bharati, Tata Power, Abb, Hero Honda and Maruti and 200 shares of Bhel, then one could have earned a kewl Rs 3,03,200/- !!! 

What more do you want as a Deepawali gift. 

THIS WEEK RECOMMEDATIONS:

  • Sell Tata Power 629 SL 665 Tgt 581-478.
  • Sell Tata Chem 128 SL 136 Tgt 113-105.
  • Sell Sterling Biotech 163 SL 170 Tgt 157-147-140.
  • Sell Hero Honda 728 SL 760 Tgt 680-631.
  • Sell VSNL 365 SL 380 Tgt 340-317.
  • Sell Maruti 538 SL 571 Tgt 458-414. 

     
Disclaimer : The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities mentioned. No representations can be made that the recommendations contained herein will be profitable or that they will not result in losses. Readers using the information contained herein are solely responsible for their actions. Information is obtained from sources deemed to be reliable but is not guaranteed as to accuracy and completeness.

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