Wish you all a Very Prosperous, Healthy and Happy New Year 2015!
Dec 29, 2014 | 16:41 PM IST
Dec 29, 2014 | 16:41 PM IST
In the last one year we have witnessed the FII's showing a lot of confidence in the India Growth Story. They have invested heavily into equities in a time when the Citizen of India has been skeptical of the developments. But this needs to change and the citizen of India should be taking benefits of the developments in India. I would say that it is a very right time for retailers to be a part of this India Growth Story.
In the last 6 months we have witnessed the new government showing us signs of their eagerness to improve the economic conditions in India. This has been well acknowledged by the stock markets which have managed to hit new highs continuously. Going forward the year should be full of action as the newly elected government gets into action. The events which should bring in interest are the local elections, the budget, spectrum auctions, coal block auctions, reforms in the power sector, reforms in the insurance sector, reforms in the infrastructure sector and the most important one - biggest reform in FREE India - 'GST'.
Let's compare these developments with the charts and then try and identify the opportunities which the markets have for us as we get ready to trade the new year 2015.
1. Crude prices falling - if you have read our Diwali Special Newsletter then you would understand that the fall in crude prices is a cold war started by the US and its allies against Russia. The objective of this is to ensure that President Putin remains at check. If this has to be true then I believe that the crude prices would be in no hurry to rise. You can read this in the article which is available on our website under the head 'From The Desk Of PT Arjun'.
Fall in the Crude price has been a major event which has helped the Current Account Deficit to go down. This will also help the subsidy burdened PSU companies to do business and most importantly improve the investment sentiment of shareholders in such stocks. A stock like HPCL on PROFISION charts suggests that till it trades above 540 levels these falling crude prices can help the stock price double from current levels in the coming one year to two years.
Latest top picks for investments - short term and long term are available inside PROFISION.
2. Interest Rate Cut is on the anvil - expected to happen sometime in the coming two months. This will help to revive the growth prospects of businesses. In the last two years we have seen complete stoppage of fund mobilization and a rate cut is expected to improve the sentiments which will help in the start of fund mobilization again. In falling Interest Rate scenario the Investment Sentiment is always positive and history has suggested that stock markets benefit a lot from a falling interest rate scenario.
3. Inflation - RBI Governor was at war fighting this menace called 'Inflation'. He took all the measures required to ensure that the Inflation reduces and now for the last many months we have seen that the inflation is under control as per the RBI's expectations. This is something which is considered to be a major factor for the Interest Rate Cut expectations to be on a high.
4. Spectrum Allocation & Coal Block Allocation - the Supreme Court intervened to stop the misdoings of the past and to ensure that fair practices are implemented when it comes to distribution of the resources of the country. This will also help in revenue generation for the Government.
5. Finance Budget is coming up in two months. This should be first official full fledged disclosure of Governments initiatives and road map for the reform process. A big bang budget could help improve the sentiments.
6. Prime Minister Narendra Modi is a strong leader with good clarity of taking India on a growth path. This is an extremely positive thing for a country which ranks among the highest populated countries in the world and that too where the maximum population ranges between an age group of 25 and 35.
7. Looking at the way our Prime Minister is moving forward it seems that his main focus is on two crucial sectors - Infrastructure and Power. He has always had a vision to light up every home in India - this is a mammoth task and this should also present an amazing opportunity for us as stock market enthusiasts. In the US a truck is driver for approx 750 kilometers in a day and compared to this in India it is driven for approximately 275 kilometers in a day. With better roads and better infrastructure the vehicles will be able to travel long distances which will improve the logistics and inturn help the businesses grow. This will be possible only with good infrastructure.
Technically the markets have rallied and this is what has kept the retailers out of the markets till now. But the current month should present a good opportunity for the retailers to start coming back as we witness the markets correcting from their all time high levels. Individual stocks also have witnessed a good correction during the same period. Companies which have triggers in form of policy reforms, performance are the ones which would be on the books of all and they should also present a good opportunity for the retailer investor.
1. PROFISION CHART - NIFTY MONTHLY CHART (22 MONTHS) - Expected By JAN 2016
2.PROFISION CHART NIFTY MONTHLY CHART (44 MONTHS) - Expected By NOV 2017
The above two charts are displaying the Monthly chart of the Nifty. It can be clearly observed that the Nifty has formed two Up Flag formations on this time period chart. With the time period involved in both the charts been different the target levels and the expected time frame in which these target are expected to be achieved is different.
Both the charts display a breakout on a monthly closing basis as of 31 March 2014. The first one has a target of approx 9850 which is expected to be achieved by January 2016. The second one has a target of approx 12500 which is expected to be achieved in 44 months from the date of breakout so by approximately November 2017.
So the overall view on the Nifty on long term charts is positive.
Another positive thing is that the Indian Retail Investor was waiting for a correction in the markets for long. The current correction in the markets should be of help for this retail investor to come back.
It is always a good time to be in the stock markets
but if you have missed this opportunity due to some uncontrollable events then the developments are again presenting you an OPPORTUNITY.
RIGHT NOW IT IS A GOOD TIME TO BE IN THE STOCK MARKETS.
Article Authored By:
Mr. Mandar Jamsandekar
Director - Precision Technical Analysis Pvt Ltd
Mobile - +91 9822329649
Niveza Editorial Desk :
We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.
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