Monday, October 15, 2007
BSE Sensex will cross 19000
Indian share markets will make new highs in this week due to
unexpected positive news from all quarters. Political turmoil will
take a short break and give stock markets much needed positive
trigger. IIP numbers are improved after a decline in the last 4
months. But stock markets are already in the grip of speculators. It
is not time for serious investors to venture into stocks due to
unreasonable valuations of almost all good stocks. Short term
speculators can make decent money in these euphoric times.
Market Direction:
BSE Sensex will move to 19,200-19,500 in this week and may see profit
booking at this range. Always expect the unexpected things in politics
and stock markets. So, watch out for unexpected shocks.
Why Indian stocks will make new highs?
1. Political stability: Intelligence reports predicted shocks for UPA
parties if mid term polls will be held in the next 6 months. So,
congress backtracked from elections and nuclear agreement. But I still
have some doubts on congress party strategy.
2. IIP Numbers: It is the real trigger for share markets. After
reporting poor numbers since April, IIP numbers once again showed
positive momentum in the economy.
Why investors should be cautious?
1. Profit booking above 19,000: 19,200-19,500 is the major resistance
point. Be cautious in that range.
2. Political Games: Never believe in political parties. Next
co-ordination meeting between UPA allies is crucial.
3. IT Results: Technology stocks will not make any fresh gains until
next quarter.
4. Subdued "Credit crisis" will resurface at any point of time in united
States.
Final verdict: My opinion is volatility will continue in October. BSE
Sensex will see 19,000 and 17,000 in this month. Real investors should
wait for 17,000 while speculators can play games according to the
investor's moods. Lay investors will definitely burn their fingers by
investing in Reliance stocks at these high valuations. Some things
will never change in share markets. 2007 will once again bring back
the horrible memories of Harshad Mehta days and technology bubble.
BigGains !!
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