The Indian market opened on weak note and trade in red territory for session .For coming session on hourly chart there is divergen on chart we can witness up move 2810- 2840 zones. On the lower side 2700-2689 will act as support zone .
Nifty :: As per Elliott wave chart may be last low finest near 2250 with major A wave and this corrective leg moving up with b down leg as far as stay above 2500/2250.. If major wave A finish near 2250 next up swing target for Nifty 3500 to 3900 within one month.. If corrective C of 4th finish near 3147 on 09/01/09 then 5th leg target in between 2250 to 1800..
As per our Friday post Nifty hold strong weekly support 2707 and bounce beck sharply from low.. Still short term momentum is down. Watch 2711/2707 with closing basis.. Below it as Next support 2668/2661 close below 2661 next target 2600/2570/2500 and even below 2500 move down up to 2250.. Nifty formed PENNANT pattern with major corrective wave and breakdown given more bearish scenario..
Our strategy for 24th Feb. watch support 2707/2661 if hold this support buy on deep (S.L 2661) sell at high.. Resistance for up move at 2775/2790/2806/2830/2870.. Supports 2711/2707/2668/2661..
NSE INDEX (2736.45)
Resistance : 2745 / 2780 / 2825 / 2845
Support : 2700 / 2665 / 2630
SENSEX (8843.21)
Resistance : 8910 / 8975 / 9035 / 9110 / 9180
Support : 8830 / 8800 / 8755 / 8670
NIFTY FUT (2723.15)
Resistance : 2750 / 2780
Support : 2720 / 2690 / 2660
BANK NIFTY (3934.35)
Resistance : 3950 / 4000 / 4050
Support : 3885 / 3835
MKT COMMENTS
NIFTY FUT OI (both series) up with increasing volumes indicating forming of fresh short positions in next series.
We expect NIFTY FUT to show bounce with volatility.
On Tuesday,Opening is Flat to Down
Stay Short Below 2730,Sl Above 2750,Tgt 2700-2675-2655
Sustain Above 2760,Sell with Sl Below 2740,Tgt 2780-2805-2825
Buy SIEMENS Above 225
Buy SBIN Above 1045,Tgt 1060/80 (Positional 1110-1135),Sl 1025
Buy GESHIP 169/72,Tgt 177.5/180/82 (Positional 185-888),Sl 165
Buy ASIANPAINTS Above 800,Tgt 810-820-840,Sl 785
Buy MARUTI Above 630,Tgt 640-650-675,Sl 620
Buy RANBAXY Above 205,Tgt 210-215-225,Sl 200
Sell VSNL Below 390,Tgt 380-375-355,Sl 400
Sell SBI Below 1040,Tgt 1035-1020-995,Sl 1055
Sell L&T Below 620,Tgt 610-600-575,Sl 630
Sell LICHSGFIN Below 200,Tgt 195/90,Sl 205
FEB FUTURES
Buy TVSMOTORS @ 18.5,Sl 18.1,Tgt 18.8/19.1/19.5/19.8/20.1 (Lot Size : 2950)
TATATEA (543)
Buy with,Sl 520,Tgt 555/570
Sell SYNDIBANK @ 61/62,Sl 64,Tgt 60.9/60.3/59.7/59.4/59.1/58.5/57.3/56.7/56 (Lot Size : 1900)
ACC (553.75) : Positional Trader can Sell with Sl 575,If Same day Sustain Below 535 then more correction.
Position trader Buy 520 March Put,with SL 575
BHARTI (642.45) : Sell,with Sl 655,Tgt 635-30-25
RIL (1254) : Sell@ 1265/75,with Sl 1290,Tgt 1240/1220
Position trader Buy 1200 March Put
WEEKLY MARKET OUTLOOK
NSE INDEX (2736.45)
Resistance : 2800 / 2840 / 2890 / 2965 / 3050
Support : 2660 / 2645 / 2570 / 2535 / 2495
SENSEX (8843.21)
Resistance : 9080 / 9175 / 9400-40 / 9960
Support : 8630 / 8525 / 8315 / 8200
NIFTY FUT (2723.15)
Resistance : 2780 / 2870 / 3015
Support : 2635 / 2545
BANK NIFTY (3934.35)
Resistance : 4125 / 4360 / 4780
Support : 3700 / 3470 / 3455
NIFTY FUTURE
Trend : Volatile
Total OI of NIFTY FUT flat, NIFTY FUT down 7.57% last week. OI of NIFTY 2700 CE is up 172.11% prices down 78.26%, NIFTY 2800 CE is up 53.41% prices down 92.67% last week showing aggressive call writing. OI of NIFTY 2700 PE is down 5.09% prices up 96.73% and NIFTY 2800 PE is down 47.56% prices up 154.43% showing profit booking. We expect NIFTY SPOT will trade volatile next week due to expiry.
Any Upmove will face Resistance@ 2760-70 levels,Strong Resistance@ 2810-20 levels. On Downside,NIFTY SPOT Support@ 2710-2720 levels,Strong Support@ 2660-70 levels.
SECTOR WATCH : BANKING
Trend : Bearish
Total OI of ANDHRABANK FUT up 45.89% prices down 11.15%, AXISBANK FUT up 54.52% prices down 15.09%, BANKINDIA FUT up 50.20% prices 11.99%, CANBK FUT up 35.47% prices down 11.19%, ICICIBANK FUT up 21.58% prices down 22.58%, INDIANB FUT up 31.02% prices down 13.28% and SBIN FUT up 22.80% prices down 12.09% last week. We expect some technical bounce in coming few session but the trend will remain down.
WEEKLY NIFTY FUTURE OBSERVATION
Observation:-
1) Total OI of NIFTY FUT flat, NIFTY FUT down 7.57%, last week.
2) Out of NIFTY 50 Stock FUTS, 46 Stock FUTS closed negative, 4 Stock FUTS closed flat last week.
3) OI of NIFTY 2700 CE is up 172.11% prices down 78.26% and 2800 CE is up 53.41% prices down 92.67% last week showing call writing. OI of NIFTY 3000 CE is 51.31 LK, highest OI in CALLs.
4) OI of NIFTY 2600 PE is up 5.03% prices up 25.79% last week showing put writing. OI of NIFTY 2700 PE is down 5.09% prices up 96.73% and NIFTY 2800 PE is down 47.56 prices up 154.43% last week showing profit booking. OI of NIFTY 2700 PE is 49.11 LK, highest OI in PUTs.
5) Total OI of FEB series CALLs is down 45.26 LK to 2.52 CR. FEB series PUTs is down by 55.84 LK to 2.27 CR last week. FEB series NIFTY PCR (OI) at 0.90, lowest levels in current series.
Conclusion :-
I expect NIFTY SPOT to trade volatile next week due to expiry. Possibility of TECHNICAL BOUNCE, NIFTY SPOT resistance at 2790/2800 levels. NIFTY SPOT will face strong selling pressure above 2830-40 till expiry.
I expect new series will begin with positive note. On down side, support at 2710-20 levels, strong support at 2660-70 levels.
BENCHMARK GOLD (C-1546.53): Weekly Chart Looking Strong
Buy around 1505/25,Tgt 1550/1600/50,Sl 1450
Sell MARUTI Fut @ 645/30,Tgt 600/575/560++,Sl 665
Will it sink out boat? against all odds I remain of a view that the iceberg is seen and we will be able to make our way around it without too much of a problem. The volumes are thinning by the day. Probably I do not have the kind of experience to read into this – but am quite sure that we do not have the kind of the volumes or the sell pressure to break the lower points seen earlier. After all if they (read bears) are to break the previous lows then they have to put in some more life and money behind the effort than what we have been seeing for last few days of candles. The last week has been brutal but that ‘go for the kill’ was still just not there. The fact remains that we did not venture into any fresh low levels so far. But yes – what it has done is that it has turned the mood bad with that lingering bad taste.
We had a day off and that is the reason I took some time off and just freaked out without bothering for good or bad. Saw a couple of movies including “Delhi 6”. The Asian markets gave a mixed verdict today. Somehow the erstwhile strong economies are the ones that are weak at the moment. Nikkei closed down 0.54% – never saw green actually. Hang Seng on the other hand opened green and then remained green thorough out to close at the best levels for the day – up 3.75%. The Strait Times too closed up in green at 2.24% up. Europe is yet to close shop for the day – they started out green but had fallen to the zero line by the mid session and thereafter had tried to recover – failed and now hovering around - FTSE down 0.57%, DAX down 1.21% and CAC down 0.01%. Surprisingly all the financial sectors were trading with handsome gains inspite of the indices nose-diving. US had the futures trading in green and respectfully so, the markets opened green and nosedived. Dow now is 0.62%, Nasdaq down 1.64% and S&P down 0.97% down. There is nowhere to go as of now. Red seems to be the favourite colour.
As far as our candles and technicals are concerned – they were keeping safe so far but seems to have given ground completely to the bears. The markets tried to touch the lower level of Bollinger bands and failed as the market tried to recover somewhat. The lower level of Bollinger band is in anycase not so far out that the same cannot happen tomorrow. 5 EMA is well below – the 20 EMA and 20 EMA is well below the 50 EMA. The volumes are – as I have mentioned a little while ago also – P*ss poor. Where is the money – gold? give me a break – like crude gold will also tumble and people will get trapped hoping that they will get to see prices at which they procured it before they die of old age. ADX has suddenly switched sides after the last black candle and that is not good. MACD is with a negative divergence – but just so. RSI is bad and bearish. Slow Stochastic shows totally oversold position so some relief can be expected in last few days of this feb series. TRIX has finally had enough and changed sides with the bears showing a downside. Don’t you all feel that we need a break? We are still in that so called narrow band and there is no breakout so far.
See how we traded on Friday – opened below the Support 2, broke Support 3 – and then the support on the upside became a resistance and we fell like a sack of hot potatos. The only saving grace – if there was one – we closed above the Support 3. I do not calculate levels below the S3 – it is not everyday that S3 is violated.
Here are the pivot levels for whatever they are worth:
R3 2869 as against 2837 on Friday
R2 2824
R1 2780
Pivot 2744 as against 2786 on Friday
S1 2700
S2 2664
S3 2620 as against 2735 on Friday
Projected High Range 2762 to 2802
Projected Low Range 2775 to 2735
Fib Projected High 2810
Fib Projected Low 2657
Okay – here is the gist. Technicals say we go down, Volumes say that the will to break lower is not there. And my heart say we go up. Why do I feel that I may be the looser in this guessing game? you wanna bet? Please vote.
In any case – some data – GTL has given a Bullish MACD crossover. The bearish MACD crossover include L&T, AXIS Bank, BHEL, JSW Steel, Hotel Leela venture, ONGC – the list is endless actually. Only saving grace is the fact perhaps that these bearish crossovers are on lower than average volumes.
1. Cuts service tax to 10% from current 12%.
2. Cuts excise duty on Bulk Cement to 8%.
Stock Market Musings:
I have been actively blogging on Stock Markets for last 20 months and learnt many investment lessons in this journey. I am tracking stock markets since 1998 but what I learnt in the last 20 months is much more than what I learnt from 1998 to 2006. In this post, I am sharing some of my experiences in Stock Markets.
20 Stock market lessons:
1. As long as earnings outlook and sentiment is good, valuations are in significant and stocks can reach new “mad new highs”. Valuations theories will not work.
As long as earnings outlook is bad, valuations are not important and stocks can reach any “mad new lows”. Valuation theories will not work.
Lesson: Rakesh Jhunjhunwala – my favorite investor and source of inspiration till 1 year back. But I lost total trust on him after his recent interviews. He completely lost the way in 2008. In stead of accepting failure and correct his way of thinking, he is now talking about 2012-14. Even a new investor can tell about stock market bounce back by 2012.
But retail investors watch his interviews to get an idea about stock markets and escape from serious losses. When Sensex was at 17,000, he talked about Sensex making new highs after 3-4 years. So, many innocent people who invested money at 20,000 levels kept their money in markets in stead of minimising losses by exiting at that price.
Example: If you invested 5 lakhs when Sensex at 20,000. One investor exited with losses and entered the market in SIP manner from 8,000 levels onwards while another investor still kept their money. Compare their earnings in 2012. New stocks and sectors will lead next rally.
2. Global economies are now tightly integrated and global economic shocks will affect each and everyone. De-coupling theory is the worst theory, I ever heard. Foreign funds play crucial role in deciding market moments than mutual funds and LIC. Unstable investors like FIIs and traders like Nirmal Kotecha are more influential in deciding stock moments than stable investors like LIC and Rakesh Jhunjhunwala.
Lesson: If Nirmal Kotecha has significant holding in your stock company, your investment is always at risk. He ruthlessly exits from that counter if he finds negative outlook for company. SEL Manufacturing was trading at 600 –just 6 months back. It is now trading at 52. That is Nirmal Kotecha effect! Same happened to Pyramid Saimira investors.
3. Role of Sentiment or Psychology:
Price of large cap: Fundamentals+/- 20-30% sentiment
Price of Mid-cap: Fundamentals+/- 40-50% sentiment
Price of Small-cap: Fundamentals+/- 50-70% sentiment.
Price of a stock: Fundamentals+/-overall sentiment+/ sector sentiment.
Example: Unitech made small investors into millionaires and made many millionaires into small investors. How?
Unitech stock price:
January, 2006: Rs 18
January, 2007: Rs 280
January, 2008: Rs 520
January, 2009: Rs 40
- If you were a small investor and invested Rs 1 lakh in January, 2006 in Unitech – your investment value was Rs 4.5 crore by January, 2008.
- If you are a millionaire and invested Rs 1 crore in January, 2008 in Unitech – your investment value is now Rs 5 lakh.
Unitech management has not done any frauds like Satyam – Unitech counter was not operated by people like Harshad Mehta. What changed the scenario is sentiment towards Real Estate sector and huge debt.
Note: Sentiment and knowledge on economic cycles are very crucial for cyclic stocks.
But Hero Honda outperformed despite operating in bad sector due to exceptionally strong fundamentals and thanks to outstanding management quality. Such exceptions are rare.
That is the effects of stock markets! New investors should always keep this in mind. Never underestimate stock markets.
4. Understand economic cycles: Economy always operates in cycles especially sectors like commodities, Auto and Real Estate will see massive swings. If you are on the right side of the cycle, you will get exceptional returns. But your may suffer serious losses if you are on the wrong side.
Example: SAIL was trading at Rs 5 when commodities are in downturn in previous bad economic cycle. Just imagine the returns of those investors when cycle turned to positive in 2006.
5. Resistances and Supports: I am never a big fan of these Technicals. I don’t know how stocks will move upwards when economic fundamentals are weak. But these Technicals are extremely helpful for Day traders. But I never gave much importance to these supports and resistances in deciding target price.
Example: DLF was trading at 306 when I gave a target of 160. I gave a target 300-350 for ICICI Bank when it was trading at 520. I gave those targets not basing on supports and resistances. I analysed the pros and cons and used my experience to arrive at those prices. This may not be a scientific chart based decision but I always stick to my experience, knowledge, research and gut feeling in stead of wasting time on charts and other technicals.
6. Banking and Economy: Everyone in India was bullish on Banks in December basing on rate cuts and domestic consumption. At that time, I heard 2 statements which impressed me very much.
Corporation Bank M.D: I am not that much bullish on our banking sector prospects. We are seeing decline in deposits means economy is slowing.
Shankar Sharma: Banking sector is always a reflection of economy. Banks will never perform better in a slowing economy. NPAs and defaults are always concern in any economic slowdown.
Note: You need to have guts to comment against herds.
7. Stock Market Analysts:
Happiest moment in the life of Indian Investors was most depressive stage of my blogging life. I wrote regularly about stock markets till October, 2007 but suddenly failed to understand the situation and valuations. I stopped blogging in November and December, 2007 as I couldn’t understand the valuations and fundamentals of many Indian stocks once Sensex crossed 18,000 levels. I stayed away from stock markets and blogging and lived in a depressive environment.
In this meantime, Sensex crossed 20,000 and all were talking about Reliance Power and listing of R-Power at 900 means P/E of more than 2,000 or infinity. Analysts were talking about Sensex crossing 30,000 levels and legendary investors like Rakesh Jhunjhunwala gave 40,000 target for Sensex in 3 years. Whenever I went to hotels or local shops in Ongole, all were talking about Stocks and Sensex. Many women in my neighbourhood were actively doing day trading and sharing their success stories. Many people started opening new Demat accounts to apply for Reliance Power IPO.
In this meantime, Sensex crossed 21,000 and some faithful readers mailed me to get my opinion on current stock markets. At that time, I was in a irritated state as I failed to under the logic behind that “mad rise”. Fortunately, in spite of temptations, I struck to my belief and wrote this post on Stock Market investment advice (my best post). I don’t know how many readers followed my advice and benefited from that article. But I will never forget that post in my life. It gave me complete confidence in my abilities and knowledge.
8. Indian Government: Indian Government missed a historical opportunity in October, 2008. When long term economic outlook was bad, our Government failed to read the situation despite led by great economist Dr. Manmohan Singh. Government failed to take proactive measures due to lack of vision. At that time, UPA leaders were in blind belief of 9% GDP growth rate.
Indian Government failed to estimate the effects of fall in GDP, our dependence on Global economy and underestimated the FII outflows and fall in tax collections. We are now suffering from massive Fiscal deficit and are not even in a position to announce massive stimulus package.
9. SEBI: Just see their order on “disclosure of pledged shares”. Even lay persons knew about loopholes in that order. But our SEBI people are acting like blind people. When investor community revolted against Satyam management, SEBI remained silent. In stead of proactively enquiring about the Satyam-Maytas deal, they acted like “Blind-Deaf-Dumb People” until Ramalinga Raju voluntarily came out to reveal his misdoings.
Lesson: Investors should take care of themselves.
10. Larsen and Toubro: This is one of the best companies in the world (not India) for long term investment. Company even announced better than expected results in the most difficult October-December quarter. But management decided to commit suicide by investing in Satyam Computers. In a tight economy, management wasted money by investing Rs 700 crore in Satyam Computers. In stead of tightly integrating its main business and use that money to get new orders, it is now completely immersed in Satyam.
Lesson: Always track even investments in good companies and exit when situation is looking unpredictable. But don’t exit when stock was corrected and included all the negatives.
11. Tata Motors: Absolute madness. If Tata likes Jaguar and Land Rover cars since his childhood, he can buy 10 cars each but should not waste investor’s money in acquiring outdated companies. It is difficult to believe that a man with “Nano” vision made this unbelievable blunder.
12. Bharti Airtel and Reliance Communications: 6 months back, both companies were neck and neck in acquiring new subscribers. Today, Airtel marched ahead with the help of strong management but R-Com lost the way as our Ambani is busy with Amar Singh and Co. Investors paid the price.
13. Hero Honda Vs Suzlon: Hero Honda is operating in bad sector and Suzlon is operating in good sector. But what happened to their stocks is exactly opposite. Why?
Lesson: In Bull markets, investors give less importance to ethics and management quality. But In troubled markets, companies with “allegation scars” like R-Com, Suzlon, DLF and JP Associates will suffer massive falls.
14. Bharti Airtel, Infosys and Hero Honda: Lesson – companies with strong management attract the attention of investors in bear markets. But they may not give you exceptional returns if markets make bounce back as they factored in most of the positives in their prices like FMCG Stocks.
15. Sugar Stocks: These companies gave negative returns in 2007 when markets are in “Great Bull Run” but sugar stocks gave 50-100% returns when we are in worst ever bear markets. Stocks in Cyclical sectors always give exceptional returns if you can able to pay your cards right. I successfully predicted turn around in sugar sector in early 2008.
16. Market moments: They will not move according to proper script. 80-90% of time, stocks will move either above or below the fundamental price according to market sentiment. 80% of price moment occurs in just 20% of time means 80% of profits or losses occur in just 20% of trading days. But “Timing the markets” is the most difficult aspect of Stock market investments.
17. Mid-Small caps: These companies will always give greater profits or losses than large caps. So, 200-300% of returns or losses are rare in stocks like RIL, Bharti Airtel and Infosys but common in many small caps and mid caps. So, young risk bearing long term investors should allocate more to small and mid-caps irrespective of short term losses but old age investors or conservative investors should allocate less than 40% to such stocks.
18. Commodities: I successfully predicted stock market moments and sugar commodity moment but failed to predict other commodity moments due to my blind belief in Jim Rogers at that time. I believed in the “After Olympics theory” - economic activity will pickup in China after Olympics. Rest is history.
Lesson: I took an oath - “Always believe in my research, gut feeling and knowledge”.
19. Satyam Computers: I wrote enough about this company. But it also destroyed the wealth of other Hyderabad based companies – investors of the other Hyderabad based companies once again understood the role of sentiment and trust. Same happened to ADAG stocks after the debacle of Reliance Power IPO. Your wealth sometimes depends on your neighbour. Difficult to believe but true.
20. Role of Politics in Stock Market moments:
A. ADAG Stocks: They gained when Samajwadi Party supported UPA Government and will make new lows if Mayawati will become PM after Polls. But JP Associates will gain if Mayawati plays crucial role at centre.
B. Stocks like GMR Infra, Lanco infra, Pennar Cements, Jindal, India Cements, Dalmia Cements and GVK Power etc may make new lows if Congress Government fails to return to power at both centre and state (Andhra Pradesh).
C. Stocks like Madhucon and heritage Foods may gain if TDP returns to power in Andhra Pradesh. Is it just sentiment or some thing more?
I shared some of my experiences in these unpredictable Stock Markets. Thanks to every reader, investor and donor who helped and guided me in this "Blogging journey".
Significant decisions:
1. Standard and Poor downgraded India rating to Negative on concerns of rising Fiscal Deficit. It is expecting Fiscal Deficit at 11.1% - very high.
Statement of the Day:
1. Jim Rogers: “I am not buying any shares. I failed to find any good investment opportunities in Stocks anywhere in the world.” – Jim Rogers.
What is the Sensex target?
According to history, Sensex trades at a valuation of 8-9 at worst of times.
According to FY 2008-09 earnings: EPS of 840-860 × 8-9 = 6,720 – 7,740. But Sensex generally trades at a valuation of 9-11 (7,740-9,460) in most of the times. But what is worrying is bleak future earnings estimates means new lows are not ruled out.
Note: What is really worrying point is lack of major positive triggers till elections except rate cuts? Collapse of European banking system and ongoing book inspection in American Banks are serious negative triggers.
Dow Jones crashed to October, 1997 levels due to mounting fears on Banking System (Both Europe and US) while Asian stocks are now trading at 5-year lows. Will Sensex crash to either 5 -year lows (5,000 levels) like Asian Stock Markets or 1997 levels (3,500 levels) like American Stock Markets? S&P crashed to April, 1997 levels. American stock markets are now finally yielding to the pressure.
Bartronics India: Another Satyam?!
This company got some positive news triggers in the last few days due to orders from Singapore Government and Delhi Metro Corporation. News of "TTD (Tirumala Tirupati Devasthanam) extending bio-metric system" to new areas in Tirumala is another positive trigger. Government's proposed rollout of "National ID card" is another positive trigger.
But, Anand Reddy (anand1383@gmail.com) asked me an important question on the Promoters of Bartronics India.
Question: Could you please comment on the information provided in the blog- Frauds of India?
Answer: Points raised by the Blogger are valid ones and falling promoter stake is always a worrying point. 9% stake pledging by promoters is another minor concern. What are the reasons for either pledging or selling of their holdings? Is it for personal reasons or company purpose? Promoters should disclose more about their activity.
Fundamentals of Bartronics India:
CMP: 74
P/E: 3.5
Book value: 84
1 year high-low: 255-55
Market Cap: 2 Billion.
Q3 results of Bartronics:
95% increase in sales and 125% increase in net profit.
Negative points about Bartronics:
1. Significant fall in Promoter stake
2. 9% pledging of promoters stake - they had not disclosed the purpose or date.
3. Complaints over audit standards (ESOPs)
Bartronics India Chart (2006-2009):
Stock rose from 48 in June, 2006 to 250 in September, 2007 - 500% returns in just 15 months. But stock fell from 255 in January, 2008 to 55 in October, 2008 despite good results.
Everyone is now suspecting Hyderabad based companies due to recent "Satyam incident". There are many midcaps where promoter stake was reduced due to expansion plans. One can not invest in Stock markets by suspecting each and every company. Foreign investors sold stakes in almost all mid and small caps. Till now, I know nothing bad about this company. I don't recommend blind belief on any company/promoter but I also don't recommend suspecting each and every promoter.
Fundamentals wise, Bartronics India is an outstanding company especially for a small cap. About promoter, closely follow news regularly. According to current situation, it is a must buy for long term investors in SIP manner.
Read this Business Line article to know more about Bartronics India. Business Line published this article yesterday.
Note: Readers can share their views on Bartronics India through comments if they know any thing about either company or its promoters.
About Bartronics India:
Guest author: Balan Subramanian (goodfunds@gmail.com)
I am an Investment advisor from Madurai (Southern Tamil Nadu). I am one of your regular readers of this blog, which is really worth reading and service to investor community.
I give some information about Bartronics India which I got from leading insiders, which is really worrying. Kindly go through and reply me about the article's sanctity.
Bartronics had come out with IPO 2 years ago and thereafter, has come out with several preferential offers of FCCB etc. Company is in the business of RFID where individual contracts are of few lakh/million rupees. However, its turnover continues to multiply (how worms multiply in the gutter).
At the time of IPO, company had entire sales in domestic market. Suddenly, exports are zooming and so are the profits. What profit company earned in 3 months/quarter ended March '07 (67 lakhs) was earned in just every 3 days of quarter ended Sept. '08 (quarterly profit 20.41 crores.).
In fact, profit of Sept. '08 Quarter is more than the turnover of March '07 Quarter. Turnover in 6 quarters has zoomed 900% (from 18 crores. to 161 crores.). As if users/customers abroad were starving and waiting for Bartronics to make the supplies. Despite such stupendous figures, share price has come down from Rs. 255/-. One can notice so many mistakes in the Annual Report. Funds raised and utilized. That's all. No more details. However, even now brokerage houses keep on recommending this scrip.
Note: Please share your opinion on the article.
Guest article on SIP investment:
Guest author: John M Varkey.
Job: Deputy Internal Audit Manager, Abjar hotels international
Location: Dubai, UAE
What is SIP?
SIP is an investment plan designed for anyone looking for regular investment, where you invest fixed amounts every month in any funds. SIP thus helps you regularly by making investment in an asset class of your choice.
How to start with SIP?
Investors of equity funds should remember that by adopting this discipline of saving and investing on a regular basis, this could benefit in 2 respects:
1. They can avoid the temptation of timing the investment "Market Timing" is an activity best left to professionals.
2. The way to weather market cycles successfully is with the disciplined and periodic investing an equal amount of money at regular intervals.
Regular subscriptions to a mutual fund are as excellent way in which to save and invest on regular basis. With SIP, investors can save themselves from the gyrations of the market
Your investment plan should suit your requirement. How?
Decide on what your requirement are, before you decide on investment plan. The higher the returns expected, the higher the risk that one should be prepared to take. Remember to choose a portfolio of Mutual Fund products that suits your temperament.
Invest regularly. Don't invest 100% of your money in one lump-sum spread it out. Invest in equities or funds with a longer term view (ideally for a period of 3 yrs or above).
Effects of compounding on savings of Rs. 10,000/- each month:
If we assume the stock market rate of return to be around 25% then from the below table it is very clear how the compounding effect of saving of Rs. 10,000 per month can make you A CROREPATI.
1. The investments of Rs. 10,000 if made in Fixed Deposit, NSC, PPF, etc. the compounding effect can make the value investment from Rs.36,00,000 to around Rs.2,07,26,247 to Rs. 3,06,97,517 @ 10% to 12% p.a. for 30 years.
2. Hence, the same if tried with SIP the returns can be as much as Rs. 15,60,08,367 to Rs. 43,56,68,526 @ 20% to 25%.
3. Depending upon stock market conditions the above returns from investment in SIP can be more then or less than the amounts reflected.
Effects of compounding on savings of Rs. 5,000/- each month:
If we assume the stock market rate of return to be around 25% then from the below table it is very clear how the compounding effect of saving of Rs. 5,000 per month can make you A CROREPATI.
1. The investments of Rs. 5,000 if made in Fixed Deposit, NSC, PPF, etc. the compounding effect can make the value investment from Rs.18,00,000 to around Rs.1,03,63,123 to Rs. 1,53,48,759 @ 10% to 12% p.a. for 30 years.
2. Hence, the same if tried with SIP the returns can be as much as Rs. 7,80,04,184 to Rs. 21,78,34,263 @ 20% to 25%.
Effects of compounding on savings of Rs. 1,000/- each month:
If we assume the stock market rate of return to be around 25% then from the below table it is very clear how the compounding effect of saving of Rs. 1,000 per month can make you A CROREPATI.
1. The investments of Rs. 1,000 if made in Fixed Deposit, NSC, PPF, etc. the compounding effect can make the value investment from Rs.3,60,000 to around Rs.2,07,02,625 to Rs. 3,06,09,752 @ 10% to 12% p.a. for 30 years.
2. Hence, the same if tried with SIP the returns can be as much as Rs. 1,56,00,837 to Rs. 4,35,66,853 @ 20% to 25%.
Note: Readers can share your views on SIP investments.
Standard and Poor warning:
There will be massive increase in corporate bond defaults in 2009 along with sharp rise in bankruptcies. According to Goldman Sachs, total troubled assets will cross $5 trillion.
Goldman Sachs warning:
India’s fiscal deficit would be among the highest in the world and likely to be 10.3% of GDP in FY2008-09 and 10% in FY2009-10. Elections are the additional economic burden and significant destabilising factor at crucial juncture.
Significant decisions:
1. SBI has frozen interest rate for auto loans at 10% for 1 year. Current rate is 11.5%. Last date to avail this offer is May 31st. Bank also froze agricultural loan rate at 8% for 1 year.
Recession news:
1. USA: Citi bank may be merged with Bank of America to save American Banking system. US Inflation is now at lowest level since 1955.
2. European Banking system: It is on the verge of the collapse and may be “next Lehman Brothers” for global stock markets.
Stock Market rumor:
According to sources, some mid-cap IT and Pharma companies are on the radar of MNC's acquisition plans.
My doubt:
Satyam Computers: We know about loss of big contracts like Coca-Cola and GSK Pharma etc but Satyam is announcing about new contracts without revealing their names. It it another suspicious activity?
Market may open down. Market would be volatile . Market may up between 11.17 and 11.42 Market may steady or up side between 13.27 and 13.51. Market may close at down or near to previous closing.
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Opening Bell Call
Buy
BHARTIARTL - Bharti Airtel Limited
ACC - ACC Limited
HEROHONDA - Hero Honda Motors Ltd.
IDEA - Idea Cellular Limited
RNRL - Reliance Natural Resources Limited
IFCI - IFCI Limited
On 20th February 2009 - The BSE Sensex closed at 8843 (down 199 points) while the NSE Nifty closed at 2736 (down 53 points).
Opening Bell Call
Sell
RELIANCE - Reliance Industries Ltd
CENTURYTEX - Century Textiles & Industries Ltd
RPL - Reliance Petroleum Limited
VOLTAS - Voltas Ltd.
BAJAJHIND - Bajaj Hindusthan Ltd
SUZLON - Suzlon Energy Limited
Technical Analysis for 24th February 2009
BSE-SENSEX - Major Resistance - 8850, 8893, 8936, 8983, 9030, 9073, 9116, 9160
BSE-SENSEX - Major Support - 8803, 8756, 8713, 8670, 8623, 8576, 8530, 8483
NSE-NIFTY - Major Resistance - 2745, 2763, 2780, 2803, 2825, 2843, 2860, 2878
NSE-NIFTY - Major Support - 2723, 2700, 2683, 2665, 2643, 2620, 2598, 2576
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