Bears trapped
Wednesday, February 17, 2010
End of the day….
Even we are filling the gap and close to 16500 the bears are still singing the tune of 12000. In fact, we think their frustration level is speaking loudly. Some times we wonder how the tainted people get entry in the wire channels which create the sense of insecurity and integrity in jeopardy. In fact, lot of knowledgeable investors and not ready to trust the integrity and hence not relying on the content. Yet it is well said, India had 160 bn people and there may lacs which can be fooled around.
We have seen TISCO getting hammered to as low as of Rs 512 and in just 2 sessions came back to Rs 584 and now all the major FII broking houses have given target of 600 to 800. The price integrity and price discovery which has been much talked about and more hue and cry is made out is not applicable to companies like TISCO just it is in A gr category.
Any way, this is not our cup of tea. We were bullish in TISCO at 600 also and even at 500. We tried to project a correct picture of TISCO and it is upto our members what they need to do. We are least bothered about market manipulations and price mechanism which we can see from our India cement call. The stock price corrected till Rs 105 on bad nos but we did not change our vision. We know the cement prices are on rise and especially south prices. India cement enjoys good book value plus hidden value of IPL Chennai which will create spark in the co. We know for sure at Rs 180 to 200 whole world will give buy in India Cement but we will stand with its conviction of giving buy calls at the beginning of the cycle.
We had mentioned in our column that LIC is all out for supporting all GOVT PSU IPO and for that it will make another 10 to 15 K cr investment in market which in their opinion will take Sensex to 17500 by end March. The story is not ending there. This should be considered as Govt statement and bears are directly or indirectly taking head on with Govt.
This also indicates that the Budget will not that harsh. The people who run the country possess much more information and hence those who wish to go against them may not succeed. In fact, these developments are making us feel that reforms will be on course and this budget could be an indicator. Since tax proposals are to be dealt with new tax code there is nothing much left in this regard. So the stress will be on reforms. Any indication towards capital convertibility or fiscal discipline could be major drives.
Thus to our belief there is nothing to lose much on the eve of budget and there is everything to gain. Markets are still in oversold state and hence there could be sharp upswing. Even rollover has to start soon and bears will also get at least some nightmare to keep their short positions open ahead of major event. Above 4950 nifty has to test 5200 and take a word from me once crosses 5050 the chartist community which had shown you the door of 3800 will come up with brilliant face saving with target 6200.
Meanwhile we suggest go long in consumer durable and domestic consumption story stocks. If Maruti and other auto stocks have made waves on this scenario other companies will also make killing. Wimplast and Cera there 2 companies which are still trading at discount offers great opportunity.
Creativity is allowing yourself to make mistakes. Art is knowing which ones to keep..
BigGains !!
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