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Market Outlook - Medium Term
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I think the dec quarter would be a dismal for the corporates. It should be far lower than even the Sep qtr.
Strategy - Exit at every rise. Wait for lower levels. Buy only when dec results are announced and stocks again correct at that time.
EXIT at current rally. The fundamentals do not at all justify higher market level.
The impact of lower int rates, lower fuel costs etc will be seen only from sep qtr of next year.
The only saving grace was crude and only lower crude will help markets from crashing.
BUT INDIAN GOVT IS NOT REDUCING PETROL AND DIESEL PRICES. WHY? ITS HIGH TIME THAT FUEL PRICES ARE REDUCED SIGNIFICANTLY. UDAYAN PLEASE RAISE THIS ISSUE ON CNBC.
Markets to fall severly in month of March 2009 with tax concerns and tight liquidity.
April/May `09 would be the only months where bottom picking should start to take advantage of rally from Sep `09 onwards. ...
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I think the dec quarter would be a dismal for the corporates. It should be far lower than even the Sep qtr.
Strategy - Exit at every rise. Wait for lower levels. Buy only when dec results are announced and stocks again correct at that time.
EXIT at current rally. The fundamentals do not at all justify higher market level.
The impact of lower int rates, lower fuel costs etc will be seen only from sep qtr of next year.
The only saving grace was crude and only lower crude will help markets from crashing.
BUT INDIAN GOVT IS NOT REDUCING PETROL AND DIESEL PRICES. WHY? ITS HIGH TIME THAT FUEL PRICES ARE REDUCED SIGNIFICANTLY. UDAYAN PLEASE RAISE THIS ISSUE ON CNBC.
Markets to fall severly in month of March 2009 with tax concerns and tight liquidity.
April/May `09 would be the only months where bottom picking should start to take advantage of rally from Sep `09 onwards. ...
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Implied volatility in the market suggest market could test 8510 this week.
Levels to watch for medium to long term:
8510-8850-9200, 2625-2690-2760
clossing over 9200-2760 over tow days confirms rally to resume started last month.
...
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Market Outlook
Sensex 8,500 11,000: Consolidation or distribution band?
Our expectation was of a further pull-back rise last week but the condition was that a breakout and close above Sensex 11000 must be witnessed to confirm the extended pull-back rise. But the Sensex did not exhibit a breakout and close above 11000. It opened the week at 10154.56, attained a high at 10570.58 and fell to a low of 9267.49 before it finally closed the week at 9385.42 and thereby showed a net fall of 578 points on a week-to-week basis.
A rise and close above Sensex 11000 was not seen and in fact we saw a retracement of the rise from 7697 to 10945. The retracement levels were placed at 9710-9327-8943. The low registered last week was 9267 and it closed at 9385. It has, therefore, tested the 50% retracement level of 9327 by attaining a low of 9267.
On a further fall below 9267, expect a fall towards the next retracement level of 8943. When the Sensex made a low of 7697 on daily chart on 27/10/2008, it had formed a Hammer candlestick pattern. Further, it moved up with the gap and went on to attain 10945. The gap which is unfilled after the Hammer formation is in the range of 8894-8739. The lowest closing on the daily chart is placed at 8509. A cluster of support in the range of 8943-8509.
If we assume that the low of 7697 is unlikely to get violated, then the current fall from the trading lower top of 10945 will move towards the retracement level, which it has been doing to form a higher bottom and can move up to test back 10945. Ultimately, a breakout and close above 11000 is the key if the pull-back rise is to get extended in time to come.
Sensex Wave Analysis
Normal Count
Wave I-2594 to 3758
Wave II-3758 to 2904
Wave III-2904 to 12671
Internals are as follows:
Wave 1- 2904 to 6249
Wave 2-6249 to 4227
Wave 3-4227 to 12671
Wave IV- 12671 to 8799
Wave V- 8799 to 21206
Wave W-21206 to 14677
Wave X-14677 to 17735
Wave Y- 17735 to 7697 (not yet complete)
Wave a- 17735 to 12514
Wave b-12514 to 15579
Wave c-15579 to 7697 (not yet complete)
Wave 1-15579 to 14261
Wave 2-14261 to 15107
Wave 3-15107 to 7697
Wave 4-7697 to 10945
Wave 5-10945 to 9267 (not yet complete)
Alternatively, Wave 4 from 7697 to 10945 is complete and Wave 5 has begun from 10945 to test the lows or it could end into a 5th Wave failure to terminate Wave c and Wave Y.
On the immediate front, the Sensex has formed an Engulfing bear candlestick pattern on daily charts after making a high of 10945. If the high of 10945 is crossed then we could get an extended pull-back rally.
The pull-back level of the fall from 21206 to 7697 is 23.6% at 10900 and 38.2% at 12888. To an outer extent, the pull-back could get extended towards 50% at 14435 and 61.8% at16049. If the breakout and close above 11000 is witnessed on weekly basis, new door for pull-back rally would get opened up.
If now depends how quickly we can cross and close above 10945 on a sustained basis with a follow-up rise. If 10945 is not crossed, then the reverse pressure could set in.
Alternative Wave Count for the fall from 21206
Wave 1-21206 to 14677
Wave 2- 14677 to 17735
Wave 3- 17735 to 7697 (not yet complete)
Internals of Wave 3
Wave -17735 to 12515
Wave 2- 12515 to 15579
Wave 3- 15579 to 7697 (not yet complete)
Micro Internals
Wave i- 15579 to 14002
Wave ii-14002 to 1510
Wave iii-15107 to 7697
Wave iv-7697 to 10945
Wave v-10945 to 9267
Weekly resistance will be at 9741-10214-10945 levels. Weekly support will be at 8911 and 7608 levels.
After reviewing both the counts it looks that the fall could be in the final leg and subsequently we could witness some relief rally.
The support cluster is at 8938-8509. We could find the Sensex testing the support cluster and then move up to test back the resistance of 10945.
If the Sensex fails to sustain at the support cluster and falls down, then the Sensex will not only test 7697 but can event go down towards 6250 where the next major cluster of support is visible. To an outer extent, the slide can be as sharp as 4227. All these things are unlikely to happen within a week and will consume time to get down those levels. Last month, however, we saw a sharp fall knocking off all the supports in a month. Let the market decide for itself when those levels will come as we believe market is supreme and price is king. We can only highlight the possibilities of that happening.
In order to evade or negate the lower possibilities in the near term or short term, the Sensex must rise and close above 11000. If it does not rise, then 7697, 6250 and 4227 are all on the cards.
For the time being, we are assuming that the final minor degree Wave v is in operation and is are likely to get terminated into a failure, which could mean that an upward movement is likely.
For the immediate near term, we could find the market trying to consolidate in the range of 11000-8500 before making any significant attempt to move above 11000. The same...
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Do you have any logic for your views or it is just your imagination.Pretty ordinary....
In reply to:
Sensex below 3000
Posted by :
suresh_esg
I know it is too early to say that sensex falling below 3000 but nothing is impossible in my view. When sensex could come down from 20000+ to close to 9000, why not?
If it really comes to that level, many things will happen. There will be a set of people who book their losses and another set of people who look at market with a more long term view. I guess it is the second set that stands to gain at the end. 
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I know it is too early to say that sensex falling below 3000 but nothing is impossible in my view. When sensex could come down from 20000+ to close to 9000, why not?
If it really comes to that level, many things will happen. There will be a set of people who book their losses and another set of people who look at market with a more long term view. I guess it is the second set that stands to gain at the end....
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Markets never fail to surprise both on the higher and lower sides.Indian market historically touched its highs every 8 years since 1985.See the peaks - 1985, 1992, 2000 and now 2008...After every peak it exhausted for near 2-3 years. This time though the speed of fall has been severe and the bounce back to high levels may come earlier if not after 2-3 years. In the meantime the rallies are going to be short lived. So sell at every rise.One shall get the levels of 8000-9000 in the sensex every now and then in the short term at least.Happy investing....
It looks possible.
sensex may fall below 6500 very soon
and Nifty below 2500 in next couple of weeks....
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The answers to this question lie in the news paper everyday for last several weeks. As stated earlier in my serveral messages, I will try to enumerate these reasons from published facts:Ref Economic times -this week
1 Exports plunge to five year low
2. FMCG firms turn heat on retail chains
3. Reliance projects miss deadlines
4. Companies to reduce IT spend by 30%
5. DLF holds MALL projects
6. Heat on Hotel chains
7. Auto sales plunge in October
8. Air;ines struggles -traffic nosedives
9. Pink slips Galore
10. salary cuts on the rise
11. Bail out packages become larger by the day
12. Many small and midsize business to down shutters
13. Interest rates on the rise, credit freezes
14. bigticket deals waning (ONGC royal)
15. Realestate prices plunge by 20% (some say 50% unofficially)
so with these news for a single day, where can one see positives in the market?
The fall of markets in this fiscal :
1. Corprates results filled with reds
2. Growth negative
3. Recession
4. Expansions cancelled
So investors and boarders stay away or divest from stock markets on every opportunity
money will better returns than stocks for next 18 months.
...
The answers to this question lie in the new paper everyday for last several weeks. As stated earlier my serveral messages, I will try to enumerate these reasons from published facts:Ref Economic times -this week
1 Exports plunge to five year low
2. FMCG firms turn heat on retail chains
3. Reliance projects miss deadlines
4. Companies to reduce IT spend by 30%
5. DLF holds MALL projects
6. Heat on Hotel chains
7. Auto sales plunge in October
8. Air;ines struggles -traffic nosedives
9. Pink slips Galore
10. salary cuts on the rise
11. Bail out packages become larger by the day
12. Many small and midsize business to down shutters
13. Interest rates on the rise, credit freezes
14. bigticket deals waning (ONGC royal)
15. Realestate prices plunge by 20% (some say 50% unofficially)
so with these news for a single day, whare can one see positives in the market?
The fall of these in this fiscal :
1. Corprates results filled with reds
2. Growth negative
3. Recession
4. Expansions cancelled
So investors and boarders stay away or divest from stock markets on every opportunity
money will better returns than stocks for next 18 months.
...
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I know there is a small microscopic but very vocal segment of the poulation in India that wants to mimic everything that is US even though India is a dirt poor 3rd world country. Thanks to other parties who restrained the Central government in the past, India had escaped the financial crisis in the west. All the more reason why now the silent majority has to shut out these vocal apes of the west....
In reply to:
Why is India not responding with Stimulus package
Posted by :
mktat10K
When all major countries are announcing stimulus packages why is India just watching other countries.
Its time to now take action and announce measures to kick start economy. It is not the time to wait and watch hoping that things will improve. We need to understand that we cannot let OUR corporates become victims of global slowdown.
INDIA - Please act now.
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When all major countries are announcing stimulus packages why is India just watching other countries.
Its time to now take action and announce measures to kick start economy. It is not the time to wait and watch hoping that things will improve. We need to understand that we cannot let OUR corporates become victims of global slowdown.
INDIA - Please act now. ...
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The market is heading higher for the time being ,and thereafter expect a major crash.India GDP is going to shrink in the coming years .IF outsourcing is curtailed 10 billion ruppes per annum will be shaved off from India .And the result is GDP will be knocked off by 2%.That means going into 2009 our GDP figures pegged at 6.1% can come to 4.1%!!! Market is going to move to below 7800 ,theres no doublt about that .Reliance and Infosys will take the index there.Be extremely careful of Technology.Almost all funds and FIIs are heavy weight in technology.A sell off here,similar to what happened in real estate, is going to happen.THe tech stocks are going to be available at less than half its value in a short time .Avoid any kind of bottom fishing in technology .......
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Today US markets crashed by 5%. Retail sales were down. Consumers are cutting back and are not spending. Prices are down across the board. FII`s would not look at Emerging markets when DOW is itself coming down. Experts are recommending buy on declines. Some of the US stocks are available at 4-5 PE with dividend yield of 5-6%. Even with this the investors are not buying. Obama is not magician. In US big investors MF`s are recommending buying into PG, WalMart, BJ`s, Biotech and pharma stocks. With copper down Freeport Macmoran is now at 1/3rd of its value.It is into Copper and gold mining. How can you expect Sterlite to go up when the market leaders are down.
In USA the only sectors which have shown positive increase over last year are biotech and FMCG stocks. They have also given positive guidance for next year. Serious money is being invested here.
India`s Large CAPS are mid and small caps in front of US companies. Its only when US stocks start to bottom out and go up will the Indian blue chips will follow.
In US the way they analyse is if the OIL prices go down then the stock prices also go down.This is because they expect that if OIL goes down the country goes into further recession as there is less demand.
Why inflation is not coming down in India
In India due to fuel prices being pegged up the companies and also consumers are not able to take advantage of it. The petrol and diesel prices should be brought down immediately. In USA everyone is paying much less prices for Gas. This helps to some extent in corporates bring down their costs. People have more money to spend if they have less to spend on gas.
Buy and hold strategy does not work in such environments. When events keep happenning at super speeds and yesterdays growth stocks are todays laggards. Oil prices have swung from extremely higher levels to less than $65. Reliance will not show any fundamental improvement until Oil prices move up above $100 (Exxon Mobil and Chevron are down when they are many times of Reliance)and those who blindly think that its time to buy "blue chips" think again. Blue chips may not deliver the same returns. ...
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Obama May Inherit Bull Market After $6 Trillion Loss (Update3)
By Michael Tsang and Whitney Kisling
Nov. 5 (Bloomberg) -- When it comes to the U.S. stock market, Barack Obama has time on his side.
The Standard & Poor`s 500 Index may be on the cusp of a rally by Inauguration Day in January, based on the speed of its tumble from last year`s peak and the time it took stocks to gain before recessions ended in 1975, 1982 and 1991, data compiled by Bloomberg show. This year`s plunge in stocks suggests that equity investors anticipate an economic contraction as severe as the one that began under Richard Nixon that will end in July.
U.S. stocks yesterday posted the biggest presidential Election Day increase since 1984 before Democratic nominee Obama beat Republican John McCain. The Illinois senator may benefit from the economic cycle after more than $6 trillion was erased from U.S. equities this year by the worst financial crisis since the Great Depression. U.S. stocks fell today.
``The markets will turn before we know the economic recovery is going on,`` said Robert Weissenstein, who oversees $125 billion as chief investment officer for the Americas at Credit Suisse Group AG`s private banking unit in New York. ``The new president won`t get tagged for the problems that exist. If things get better, they were there. That`s politics. The general public will give credit to the new guy.``
The S&P 500 has jumped 12 percent from a five-year low of 848.92 last week, trimming its decline to 39 percent since it peaked at 1,565.15 on Oct. 9, 2007. The gauge`s 35 percent drop in 2008 would be its steepest annual retreat since 1937.
U.S. Stocks
The S&P 500 slid 5.3 percent to 952.77 today, its biggest plunge the day after a presidential election, as reports on jobs and service industries stoked concern the economy will worsen even as President-elect Barack Obama tries to stimulate growth.
Europe`s Dow Jones Stoxx 600 Index fell for the first time in seven days, losing 2.3 percent, after ArcelorMittal and Carlsberg A/S reported disappointing results. The MSCI Asia Pacific Index added 4.6 percent as Obama`s victory spurred optimism that his spending plans will help the global economy recover from the credit crisis.
The S&P 500`s slump since last year`s high is the steepest for a comparable period since the gauge fell 43 percent in the 13 months ended in October 1974, Bloomberg data show.
The economy then was mired in a recession that lasted 16 months and ended in March 1975, five months after the equity market began its rebound. During the recessions of 1982 and 1991, the S&P 500 began to climb four months and five months before the economy started to recover, respectively.
Start of Recession
Economists Stephen Roach at Morgan Stanley and Neal Soss of Credit Suisse say this year`s contraction was under way in March. Harvard University economist Martin Feldstein, a member of the National Bureau of Economic Research, said that month that a recession had probably started in the U.S. The group is responsible for dating business cycles in the U.S.
The U.S. economy shrank for first time since 2001 a year ago after the meltdown of the U.S. housing market left banks globally with almost $700 billion in writedowns and credit losses. That forced the administration of George W. Bush to authorize more than $1 trillion in spending to unfreeze lending.
Should the current recession be as severe as the one in the 1970s, it will last until July 2009, using the start dates given by Feldstein and Soss.
Based on the stock market`s history of anticipating economic recoveries, the S&P 500 may embark on its next bull market in February, about a month after Obama`s inauguration on Jan. 20.
`Inherit a Positive Market`
``Now if we are coming out of the recession, then yes, he will be the beneficiary of these current stimulus and banking policies,`` said Walter Gerasimowicz, the New York-based chief executive officer at Meditron Asset Management, which oversees $1.1 billion. ``He will most likely inherit a positive market over the course of the next several months.``
Still, Obama will have to contend with an economy pummeled by the fastest contraction in manufacturing in 26 years and the lowest consumer confidence. That may weaken any rebound as companies eliminate workers and consumers curb spending.
S&P 500 companies are poised for the fifth consecutive quarter of falling earnings, the longest streak since the 2001 recession. Profits decreased by 9.6 percent for the 415 companies in the S&P 500 that reported third-quarter results.
The U.S. economy contracted 0.3 percent during the quarter, and may shrink another 0.3 percent this quarter, according to economists estimates compiled by Bloomberg. In 2009, economic growth may slow to 1.15 percent, from 1.6 percent this year.
Economic Overhaul
``The problems started before the new president comes into office, but then ...
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