DOW Jones --- Nearing the 200 day moving average and getting oversold. Supports at 12000-12200.
S&P 500—Supports seen around 1280-1270 levels.
Nifty --- Highly oversold. Further fall to 4600-4550 is also possible but it is a time to just sit back and relax with your holdings or buy more.
Personal View:
First to start with had a view that 5100 would hold and we may breakout above 5600 ! . This has fallen flat on my face.
Recently did expect 4950/4800 to hold and that is taken of and we may even end up at 4550-4750 band in the near term.
Although have got this move totally wrong and got to accept it when you do so. Quite a lot of stocks are down to seriously cheap levels but as of yesterday we are totally invested and may get leveraged here.
Sitting at a cut of 15% notional is very difficult but we need to go through this pain to enjoy the gain later.
Sentiments are at the lowest – The world almost ended in 2008 and a new rally started in 2009 out of nowhere. Will not be surprised by a bounce in June and big rally ending into the year from September to December --- Yes very difficult to fathom it but will stick my neck out.
On the simple p-e basis we are quoting at 12-13 times forward earnings , Market cap to gdp ratio and many other parameters are close to December levels. USD-INR is above dec levels ( i thought it would not go above 52)
All in all bottomline – Investments made at 5000-4600 will hurt you for quite some time but will get relief in June and a good gain by december.
Happy Investing,
Nooresh Merani
May 18, 2012
Hi Nooresh,
I had bought 1000 shares of Shri Lakshmi Cotsyn Ltd . @ Rs.150 having a Eps of 50 . Today it is Rs 90 . What to do (sell or average).Please guide me
May 21, 2012
Hi Vivek,
I would doubt the fundamentals of the company.
If you are trader would suggest to look at terrible delivery volumes in the rise. on fundamentals the 50 eps 🙂 is i suppose with a lot of rising debtors and inventories. Not looked totally but such earnings can wipe off in a quarter.
very low delivery % ge indicates manipulation
May 18, 2012
hello sir,
sir the panic is all around but smart investors r on buying jets. they r just buying like there is no tomorrow. if we see this time the fall of dec. and the fall of May the is a huge difference some weaker stock as per charts who r laggards from the beginning of a rally since 2009 it is no surprise that they r fallin so much. but some midcaps are still double the value since the mkt hit a bottom in dec. commodities r goin dwn interest rate will fall further all this argues will for the New Bull Market. as it is well said ““Bull markets are born on pessimism, grown on scepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”
May 21, 2012
Hi Nitin,
Yes valuations are compelling for long term investors with apetite. For a normal guy risk reduces with price increases 🙂 whereas it should be vice-versa.
So am pretty optimistic for next 6-12 months 🙂 Difficult to take a big bet on next 6-12 sessions 😉
May 18, 2012
sir, should i buy icicibank or axisbank at this rate.
May 21, 2012
well if you have a little longer horizon can prefer axis bank
May 19, 2012
Hi Nooresh, How is IOC at 270 and Hind Petro at 305, considering imminent price hike in next 5 days and cooling crude.
May 21, 2012
Does not seem like a rate cut coming in this month. Can come after some gap post parliament session
May 20, 2012
there does like some +ive divergence at the 30rsi, so by that logic it does indicate that the near term trend may be reversing. but 4600 also looks very much possible.
May 21, 2012
I keep getting a lot of numbers on the downside for 4600 / 4400 or even at 4800. What after that is the important part 🙂