KYI: Santa missing, but here's expert tips for a merry Xmas
Amid the seesaw sentiment in the market, as investors wonder if Santa missed us out this time around, Gaurav Dua, Head of Research, Sharekhan shares his expert calls on stock queries posted through Moneycontrol.com's initiative 'Know Your Investment' (KYI) to ensure you have a merry Christmas!
December 24, 2011 / 12:50 IST
History has it that Santa gets it cheer to the Street each year. What is known as the phenomenon called the Santa Claus Rally usually makes it to the Indian markets each year, as investors look at valuations and they appear attractive at this point in time. However, the stocking at Dalal Street over the two days has been swinging on and off gifts for this Christmas.
Amid the seesaw sentiment in the market, as investors wonder if Santa missed us out this time around, Gaurav Dua, Head of Research, Sharekhan shares his expert calls on stock queries posted through Moneycontrol.com's initiative 'Know Your Investment' (KYI) to ensure you have a merry Christmas! Below is the expert advice to all the questions you asked us on our Facebook page:
Deepak Mittal: Will there be a movement of 500-600 points in the Nifty, in coming months too? If so, which strategies do you recommend for F&O? Dua: Ideally, derivative instruments should be used by retail investors for hedging purpose. This can be done by buying in the money/near the money puts and selling out of the money puts. This provides a kind of cover for your portfolio in falling markets at cost of 2-3%. Given the downtrend, other obvious bearish directional strategy is to buy puts with stop loss of 4,800-4,850 for the next month. Surendra Patil: How high do you think can Nifty go before its next slide?Dua: I am not a technical analyst but I think Nifty can retrace 50% of its recent fall and touch 4,800-4,825 levels.Avik Mullick: Is this the perfect time to invest in market?Dua: Yes, we are already at 11.8-12x one year forward earnings, perhaps 12.5x, if one takes into account further downgrade of earnings. Hence, this leaves a scope for 10-12% of downside in case of a breakdown from here. Historically, it is not possible to catch the exact bottom or accumulate the desired quantity of stock at risk bottom prices. Thus, serious investors can start deploying funds in a staggered manner. However, the downside risk in individual stocks could be much higher and it is advisable to avoid buying in stocks with high debt-equity, high pledging of shares or ones with large forex exposure.Sorbh Gupta: I had invested Rs 8,000 in HCL Infosystems at Rs 65 per stock. Today, it is at Rs 42-43. How do I trade this stock?Dua: HCL Infosystems
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