Wednesday, April 6, 2016

Indian Markets End Flat - Are We Out of the Woods Yet?

Today Indian markets closed absolutely flat. It just mirrored its Asian peers. So the question that begs an answer is whether we are out of the woods yet.

I must admit that those who are long in markets are not out of danger unless Nifty closes above 7700.

But the good news is that Nifty seem to be taking support at 7600.

We have long positions in 18 scrips and so there is enough reason to be worried.Present status of these long positions is as under :-

CANBK : Bought at 194, Closed at 184.7
JINDALSTEL : Bought at 62.5, Closed at 62.3
INDIACEM : Bought at 87, Closed at 89.
RPOWER : Bought at 50, Closed at 49.25
IOB : Bought at 30, Closed at 29.1

UNIONBANK : Bought at 134, Closed at 127
ANDHRABANK : Bought at 53, Closed at 52.1
BANKINDIA : Bought at 98, Closed at 92.55
ORIENTBANK : Bought at 94, Closed at 88.15
SYNDIBANK : Bought at 67, Closed at 67.3
HEXAWARE :  Bought at 268, Closed at 256.9
BANKBARODA : Bought at 150, Closed at 144
KTKBANK   :  Bought at 104, Closed at 102.8
UCOBANK  :  Bought at 40, Closed at 37.75
ALBK    :  Bought at 57, Closed at 53.85
IDBI      :  Bought at 71, Closed at 66.9
PNB       : Bought at 87, Closed at 81.55
SBI    :  Bought at 195, Closed at 183.9

But the most worrisome situation is the gruesome way J&K Police have beaten up peacefully demonstrating students of NIIT Srinagar. We should all hang our heads in shame. It can only happen in India that you get beaten up mercilessly by State administration for chanting slogans for the nation. 

Markets Witness Mayhem - Update on Buy Positions

On 05 Apr 2016 there was mayhem in Indian markets. Markets cried murder when RBI cut rate by only 25 bps, when the least that was expected was 50 bps.

That said let us now see what happened to ten buy recommendations which could not be bought in previous trading session as mentioned in this post.

These 10 scrips drifted down as markets slid into deep red.. And the slide allowed them to come into buy zone as recommended in this post. Here is the list:-

CANBK : Bought at 194, Closed at 185.5
JINDALSTEL : Bought at 62.5, Closed at 60.25
INDIACEM : Bought at 87, Closed at 84.4
RPOWER : Bought at 50, Closed at 48.85
UNIONBANK : Bought at 134, Closed at 129
ANDHRABANK : Bought at 53, Closed at 52
BANKINDIA : Bought at 98, Closed at 93.55
ORIENTBANK : Bought at 94, Closed at 89.55
SYNDIBANK : Bought at 67, Closed at 67.5
TATAPOWER : Buy price not obtained in trade today

However ten scrips which we bought in previous trading session as mentioned in this post were simply hammered in trade. They fell off as if from a precipice. 

Do not worry. All we need to do is watch for a bounce in markets in next trading session. The manner in which the markets rebound will determine the targets for these buy positions. 

I shall keep you updated on the situation 

The only bright spot has been L&TFH Apr futures. We bought it in previous trading session at 65 and the target was 70 .Check it out in this post. In this trading session the given target was achieved.

So profit made from one lot of 8000 shares of L&TFH Apr Futures is ( 70 - 65 = 5 ) X 8000 = Rs 40000/-

Tuesday, April 5, 2016

RBI Cuts Rate - But Was It Enough?

Phew! What a grueling day in market today!! It has been a sea of red. Financials have been butchered with bears taking a firm grip.

Reason was simple and clear. Markets were expecting a 50 bps cut in repo rate but Raghuram Rajan delivered only 25 bps cut. This despite the fact that our Fin Minister himself had publicly indicated that he expected a 50 bps cut in repo rate from the Central Bank.

Nonetheless, why such despondency was witnessed in markets today? After all a rate cut was given by RBI and some liquidity measures were initiated. Why should a rate cut, however small, impact the markets so negatively?

I think the reason is that market participants wanted to send a message to Raghuram Rajan. And the message is that they do not appreciate his negative approach to growth.

To be frank, RBI Governor's actions have always been suspect, as if he is totally against growth in India. Take the instance of present situation as it exists in Indian economy. By his own admission today, RBI Governor is seeing consumer inflation at 5%, which is fairly pleasant as inflation goes. If inflation is under control, then it is high time to address the growth of economy which is in doldrums.

For kick-starting growth in Indian economy, we need job creation. Jobs can be created if industry goes into capex drive, meaning that capital expenditure has to be resorted to by industry captains to build extra capacity. Building extra capacity will require fresh jobs, which in turn will boost domestic consumption, thereby inviting more job creation and thus sending Indian economy into a virtuous path of positive growth spiral.

How is it so difficult for Raghuram Rajan, an economist of world renown, to understand? And when situation is so conducive from inflation side, it is simple to drive growth by substantially lowering rates. Industry has to be incentivized by lower rates so that they can borrow funds from banks and create extra capacity through capital expenditure.

This is what the markets had expected form RBI Governor and did not get. 25 bps rate cut is next to nothing. In fact some market watchers were expecting 100 bps, but 50 bps was the rock bottom expectation. Even after Finance Minister publicly hinting at 50 bps, Raghuram Rajan just could not care less for growth in Indian economy. This is at a time when Govt has done everything possible for fiscal consolidation.

Wonder who exactly is Raghuram Rajan working for? India's growth has suffered a lot at Raghuram Rajan's hands. As his term comes to an end this September, we hope to get a more positive RBI Governor to guide India with proactive monetary policies.

Monday, April 4, 2016

Trades Entered - RBI Rate Cut Eyed Eagerly

Bull charge is on!

In my last post, I had given 20 scrips to enter trade today.

However there are some trades which we could not enter. Buy price given in 10 scrips were not met in trade today.We will discuss about these scrips later. We need to review our entry in these scrips.


Today we could enter into ten trades at my given buy price. These are mentioned below :-

HEXAWARE :  Bought at 268, Closed at 254.2
BANKBARODA:  Bought at 150, Closed at 151.75
KTKBANK   :  Bought at 104, Closed at 104.35
UCOBANK  :  Bought at 40, Closed at 40.25
LT&FH  :  Bought at 65, Closed at 65.15

ALBK    :  Bought at 57, Closed at 56.9

IDBI      :  Bought at 71, Closed at 71

PNB       : Bought at 87, Closed at 87.25

SBI    :  Bought at 195, Closed at 195.8

IOB       : Bought at 30, Closed at 29.9

In all these trades, only Hexaware has behaved negatively and hence needs to be watched carefully. If you have entered into Hexaware trade at 268, then you should exit as and when Hexaware touches 270.

Sunday, April 3, 2016

Indian Stocks in Radar - Buy Buy Buy!

Those who followed my advice would be quietly sipping  a refreshing cup in complete peace. After all trading just one lot of SBI for a fortnight has given them Rs 30000/- in profit from an investment of Rs 75000/-

Now I will give you recommendations to a basket of scrips which will give handsome profit in coming days. All these scrips should be traded in April Futures contract.

Hexaware : CMP 270.1, Buy- 268, tgt - 278.

Jindalstel : CMP 63.95, Buy- 62.5, tgt - 72.

Indiacem : CMP 89.15, Buy - 87, tgt - 95

Tatapower CMP 65.5, Buy 64, tgt-70

Rpower CMP 50.5, Buy 50, tgt - 54

L&TFH CMP 66.05, Buy 65, tgt - 70

IOB CMP 30.6, Buy 30, tgt - 36

Canbk CMP 199.7, Buy 194, tgt - 220

PNB CMP 88.25, Buy 87, tgt - 100

SBI CMP 197, Buy 195, tgt - 220

RBI policy review on 05 Apr 2016 will give tremendous boost to Indian markets. If RBI announces rate cut of 50 basis points, then all the stocks discussed so far will get turbo-charged. There will be mad rush to join the herd.

But maximum focus will be in the following scrips, which to will give very high returns :-

Andhrabank CMP 55.85, Buy 53, tgt - 65                  

Bankindia  CMP 100.9, Buy 98, tgt - 120

Ucobank CMP 40.95, Buy 40, tgt - 45

Ktkbank CMP 105.3, Buy 104, tgt - 120

Albk CMP 58.05, Buy 57, tgt - 67

Bankbaroda CMP 153.3, Buy 150, tgt - 170

Orientbank CMP 96.8, Buy 94, tgt - 110

Syndibank CMP 71.5, Buy 67, tgt - 85

Unionbank CMP 140, Buy 134, tgt - 160

IDBI CMP 72.85, Buy 71, tgt - 80

Note : If there is very strong opening in markets on Monday, then buy at higher levels than indicated in this post.