Market Comments - King to decide the next move

What happened yesterday was only a trailer of what could happen in future. When the markets are overheated like what has happened so far, they can collapse in a jiffy was the message to all investors. However markets recovered smartly as FM came and did the required damage control in his own style. Every one wanted the Bull Run to continue and set aside the 'SENSE' in SENSEX. What we are now going to see is only 'X' the unknown quantity rather than the BSE Index called SENSEX.

The whole drama was executed meticulously just to give the FII an indication that the governmean do anything they can if the markets are taken to dizzy heights in an unwanted manner. What happens next? What should we do now? Should we enter the market or wait on sidelines? These are many questions that are cropping up your mind....right????

I would suggest that if you are a new investor and if you want to invest for long term then buy my recommended scrips with 50% of your capacity and then hold the 50% of your capacity in correction mode. You can do this after Reliance declares results today.

Reliance (" King of Indian Stocks ") is going to declare its results today and market expectations are high on the stock split or bonus news. This was the precise reason it closed in positive and also the main reason we could see only 3oo odd points down in the sensex instead of 500 points yesterday.

There are four scenarios possible for Reliance results.

1. Reliance will declare good results and also announce stock split / bonus. Market will be on fire and should touch 20K in next 2 to 3 days. All fundamentals will be kept aside and we should see big rally till 21 K is reached or even 22K. Enter the market, go with the FII and try to make some stocks free of cost or exit with profits.

2. Reliance results are good but no stock split or bonus is announced. We may see some correction in Reliance scrip and market may fall but recovery is possible quickly.

3. Reliance results are poor and no stock split or bonus. Markets could fall sharply and correction can continue for a week or so. One should do stock specific activity and then buy scrips during the fall at every level.

4. Reliance results are poor but stock split or bonus announced. This is very unlikely but Markets will be volatile and markets may move either ways and uptrend may continue.

I expect scenario 2 could happen though my guess could be wrong. Let us wait and see what will happen.

Powergrid corporation is zooming like anything and it is baffling every one. All powerstocks are being rerated but I still believe it is very highly priced now and though it can move to 150 rs in short term seeing the current trend it will then remain flat between 90 and 150 for atleast next few months as it has run up substantially.

IFCI is still a safe bet in this market and hold on to it with patience. If stake sale does not happen also IFCI will get rerated as it is soon going to be a debt free company.

Rathi Bars IPO is going to start today but I advise investors to avoid this issue.

Markets should open up with a gap again and then consolidate before the key event of Reliance results unfolds.

Stock picks link :

http://indianstockmarketscomment.blogspot.com/2007/10/comments-on-current-stock-picks.html

My other blogs :
http://indianstockmarketsquery.blogspot.com/
http://indianstockmarketsinfo.blogspot.com/
http://calculatemyemi.blogspot.com/