Bulls driving....
Tuesday, March 02, 2010
End of the day…
Friday Nifty touched 5000 and crashed in last 10 minutes below 4950 the critical mark where bears had good amount of conviction to remain short. Only the smart old fox cut hit nifty short above 4950 as he is known for smart reversal of trades. Others did not get opportunity. Today Nifty opened at 4990 and almost traded at these levels for more than 75% of the trading time. Bears made valiant attempt to break the rhythm of the market and tried to bring it below 4950 bit failed miserably.
In last one hour Nifty broke out as expected and closed at 5033. At this juncture the life is tough for bears because they will be afraid of infinity. Nifty may open at 5100 tomorrow as bulls as well as long only funds consolidated their positions.
In this entire exercise they made a point that stocks do not move in major way so that the bear conviction remain billed. They just made head way in stocks like Tata Motors, Hindalco, ACC, Grasim, Larsen, Tisco Crompton etc leaving all momentums stocks like IDBI, Century, IFCI, J P , HDIL, Idea, Bharati and Essar for tomorrow. Side stocks will burst tomorrow with Nifty set to travel towards 5200 to 5300 levels very soon.
There is none who is not satisfied with the direction of the budget though there are some players who are still trying to find faults in the budget. This is the breed which does not have ownership in the market and hence would love to see some correction. Rest of the players have started talking about global cues once again because there need some base to talk about. I cannot find any fault here so let us talk about other things because even earnings will be robust due to growth agenda. We have seen this in steel and cement stocks as pointed out by US in its first report. It was clear that from Rs 173000 crs infra spending max will go to cement and steel. Tisco and ACC shown the real spark and now it is turn of ISPAT. This quarter ISPAT will report best ever nos and demand for steel is rising very fast. In fact, RNT holds that Tisco will head towards Rs 2000 and there could some more acquisitions like Corus which clearly indicate the get going of steel. IPSAT is just free of cost for those matters. No doubt it is a white elephant and slow mover and for sure there is no downside and this stock will give some day in tons.
Similarly Rs 26000 crs tax breaks will help none other domestic consumption play. Every person who earns Rs 8 lacs will save Rs 56000 and that will go for spending in consumables at default choice. He will use the money for improving his basic demands such better home and for that CERA as well as WIMPLAST are the largest beneficiaries. Higher disposable income means higher standard of living requiring better sanitation and bath fittings due to media effect to match the higher standards. Wimplast which owns CELLO brand of furniture pens house wears etc could be another stock which get good push from Budget.
New infrastructure contracts such as airports and hotels would add gloss to Cera business whereas higher education allocation too will add max benefit to Wimplast.
Both the companies are debt free and trade much below the valuations of peers making them risk free investments.
Apart from the same since the budget is pro agri and inclusive growth it will continue to support the auto sector which I had earlier thought would top out due to removal of stimulus. In fact, the price rise suggests more rise in profit and the capex will continue. Component will be the theme of 2010. In this segment NRB and SNL looks good as bearing serves multi purpose e g for auto as well as industrial applications. The global supply is falling day by day in bearing which makes domestic bearing companies more attractive. In SNL bearing the ICICI bloc was already sold out and hence there is hardly any floating stock.
As regards global crisis I am sure the policy makers knows more better than us and in fact it is very absurd and futile exercise by analysts community to think beyond the policy makers and downgrade the markets. You have seen that with BUDGET predictions. Nifty recovered from 4650 to 5033 and very close to earlier top of 5300 and yet most of the players are either short or don't own any shares. Where are the chartists predicting 3800…?
In short never draw inference about the co, country better than the managing director of the co or the FM of that country or policy maker. They have lot more insight to information and hence your judgment cannot override theirs.
Very soon retail and HNI participation will start and market will go new height. Volumes will start. March will not offer borrowing facility to retail whereas operators will not have any difficulty. Rest you know.
Before you get fresh funding from April 1 2010 the stock prices will rock.
Happiness is the full use of your powers along lines of excellence
BigGains !!
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