Sunday, April 29, 2012

Get Ready To Trade : Way Ahead For Indian Markets

Since 22 Feb 2012 Indian markets have been slamming the investors and traders alike. There has been total lack of direction where trend has been missing from the markets. It has been a difficult time and hence traders have been particularly frustrated. Not that investors have got any respite, but those who are not in F&O segment of the market can still claim to be relatively safe from the market mauling.

The reason for such prevailing market conditions is quite simple. The market rose at a furious pace from the lows of 20 Dec 2011 to the high of 22 Feb 2012, almost in one huge step. Nifty rose from the low of 4531 to the high of 5630, an advance of about 1100 points in just two months, which can be considered as a spectacular rise. After such a hectic move up, the market has decided to take a well deserved breather. Nifty has moved within a band of 500 points since 22 Feb 2012. Sideways movements always baffle people and test the patience of even the most professional players.

However there is good news for the traders and investors alike. This sideways movement of the markets is coming to an end. Very soon we will again have a trending market and so be ready to take advantage of the emerging trend. In the ensuing elaboration I shall be talking only about Nifty and those following other indices can co-relate to those indices.

Nifty closed at 5209 on 27 Apr 2012.  From here Nifty has a resistance at 5300. This means that I am foreseeing Nifty to rise up to 5300 level and no more in the near term. That should complete wave B of the correction that started in 20 Dec 2011. From 5300 Nifty, the wave C of the correction should begin its southwards journey  and should take Nifty to level 4950 or may be even 4820. So you can short Nifty at 5300 with a stop loss of 5350 for a target of 4850.

But in case Nifty closes above 5390 then we can go long in Nifty at 5400 for a target of 5800 with a stop loss at 5350. This to my mind is an unlikely outcome, considering all prevailing micro and macro headwinds.

I shall be back with more details as the trend unfolds. I can assure you that there are very interesting times ahead and the second half of 2012 will be very rewarding for brave-heart opportunists and contrarians. So gear up to trade the evolving trend

Monday, April 2, 2012

Truths About Defence Deals And More

In recent days we have been shocked to find our most trusted pillar of faith shaking right before our eyes. Yes I am referring to Indian Army and the various forms of allegations and counter allegations flying thick and fast between the Army and the political class. It is both intriguing and painful for all of us to find our country's greatest strength getting embroiled in controversies. We gasp as each day unfolds fresh allegations and insinuations involving Indian Army and its Chief. So its time we try and view every contentious issue involving the Army in perspective and logically draw conclusions. Below is my humble attempt to do just that so as to be able to absorb everyday news flow without jumping out of one's skin, not knowing whom to believe and whom not to.

Age Row of Army Chief
Initially we were made to believe as if the Army Chief had fudged his date of birth (DOB) and was a cheat. That was the general impression one got from the news reports which were made public initially, if you recall. Later as the story unfolded it became clear that Gen V K Singh was perfectly right in defending his actual date of birth and has been  waging a battle with the organisation for a long time over his correct DOB. What is most surprising is that it is not difficult to amend the records based on the Birth Certificate and yet this simple exercise has been allowed to become a national row.

Even at this belated stage the Birth Certificate should be the criterion to fix the DOB of Army Chief and correction should be made in his records. After doing so if the political class and the hidden powers that be, want the Army Chief to retire on 31 May 2012 to make way for Lt Gen Bikram Singh, that also can very conveniently be done by sacking Gen V K Singh. Who's stopping the political masters from asking the Chief to step down by invoking any or all of the supposedly ethical issues presently at offer. By doing so the Govt would then have solved at least one of the vexed issues, which even the Supreme Court has managed to sideline.

Tapping in Defence Minister's Office
Here again the news was so tactically made public that it pointed an accusing finger at the Army Chief. The needle of suspicion was constructed in a manner that the public was made to understand that the Army was keeping illegal tabs on Ministry of Defence (MoD) and the Defence Minister. If that was such an open and shut case then what is stopping the Govt to sack the Chief and make him stand trial. But the truth is far from the impression that was given to public. The intelligence agency functioning at MoD level is Defence Intelligence Agency (DIA) which is directly under the Defence Minister and not the Army Chief. Then how on earth can the Army Chief plant a bug in MoD unless an establishment not under him connives with him? Really far fetched!!

Even then, where is the investigation report on the bug-scam? To date, on a matter as sensitive as tapping of MoD, no action has been taken. This embarrassing case has been promptly made public by MoD officials but no follow up has been forthcoming from them. Details of what device and where it was planted and the modus operandi of the miscreants have not been made public. One can only wonder why!

Letter Leak
Confidential letter written by Gen V K Singh to Defence Minister and the Prime Minister has been leaked in the public domain. The letter brings out in details the deficiencies in men and material that the Indian Army faces. Its a matter of grave concern since it outlines the defence unpreparedness of the Indian Army. Army Chief by voicing his concern through the letter has done well to make his political masters realize the gravity of the situation. But the letter should not have been made public. The question is as to who could have played this mischief. It is childish to think that the Army Chief would have done it. He would be the last person to do so since it would surely be akin to committing suicide. Army Chief has strongly condemned this act of high treason and has called for thorough investigation to nab the culprits. We sincerely hope that this time around this case is solved and actual culprits are made to stand trial for treachery. This case must not be allowed to be forgotten like the phone tapping case.

Nevertheless it is worth mentioning that what has been mentioned in the leaked letter was already known to the public for quite some years. In fact all defence analysts had known these facts for quite some time and the same had been chronicled in various magazines over the years. Even MoD was seized of these supposedly startling deficiencies as it collates all these data on a periodic basis though departmental reports for defence procurement. What Gen V K Singh did by writing that letter was only to draw urgent attention of Prime Minister and Defence Minister on this issue of utmost importance relating to defence preparedness of the country. Lets hope that we do not shoot the messenger who has given a wake up call to the mandarins of power for the sake of national security.

Offer of Bribe for Tatra Vehicles
Gen V K Singh opened a can of worms by making public that he was offered a bribe for recommending purchase of a tranche of 600 Tatra vehicles for Indian Army. The Army already has inducted 7000 such vehicles in the Force. Army Chief has commented that these vehicles are sub standard and are also exorbitantly priced. These are damning observations and brings to fore lot of graft in defence procurement. The man, accused of offering the bribe, has been named and is a retd officer of Army - Lt Gen Tejinder Singh. He has been with DIA and is a very influential man. Here is the link to know who Lt Gen (retd) Tejinder Singh is

Notwithstanding all that is being said about the bribery scam by politicians, I think Gen V K Singh stands vindicated by what CBI has unearthed so far. There is lot of truth in what the Army Chief has said, because CBI has grilled the Vectra chief for the third time today and has issued instructions for him not to leave the country. Vectra is the company which has controlling stakes in Tatra. If the country has been been duped for all these years we laud Gen V K Singh for having the courage to call  spade a spade. We owe it to him for making a revelation that can rid this country of graft in defence procurement, much to the discomfiture of MoD officials who are responsible for defence procurement.

Now it is for you to judge whether Gen V K Singh is a patriot or a traitor. Is it more important for us to clean the system or to quietly fade into obscurity as is desired by our politicians and bureaucrats? Time has come to accept no nonsense in cases of graft eroding the very edifice of our country, whatever be the price.