Market Comments - Never Say Never Again

Bulls were on rampage yesterday after the initial lull and though I expected the rally to start after couple of days, it started in a jiffy. If you read my comments yesterday where I had mentioned...."Wait for the signals to enter fully. However buy in small quantity the above stocks so that you do not miss the bus when rally starts again."

Bears did not expect the reversal to happen so quickly after the fall on Monday and the reversal was so sharp that the shorts had to be covered and most of the short sellers were badly trapped. This is the precise reason I never advise short selling. One should buy only puts if we feel market correction is likely. This way you minimise your loss and also they act as hedging to your equity stocks.

Markets will open with a bang again and we should see a good rally before some profit booking happens. There will be volatility again as markets have run up quiet sharply recording the biggest gain in single day. At this pace we should see 19K very soon as US markets also rallied smartly on hope of another FED rate cut. If this happens then RBI may also cut rates here and we should some good amount of buying in banking stocks and this Dipawali should be very bright with 20K also in sight.

However all said, there are many other factors which may spoil the bulls party. We are in such a position that even a slight amount of bad news could pull the sensex sharply. Remember that if 800 points rally is possible then 1500 downfall is also easily possible at this level. If you are a long term investor be prepared for it. Those who are entering for short term should be cautious and book profits at every level to be safe.

Jai Corporation is hitting circuits even after ex bonus and stock split and currently stock is close to touching 1000 which means 20000 ex bonus and stock split. I had given target of 10K when it was 6K. Later revised to 15K.

IFCI, Nagarjuna Fertilisers, Tata Tele, Arvind Mills all are moving on speculation and so enjoy the rally. IDBI, SBI will be good performers in banking.

If you remember that I had recommended Infosys as the best stock in IT sector which will perform against all odds. Infy contributed 152 points in the rally from 17K to 18K and gave decent returns to those who bought it around 1750 to 1800 levels.

Powergrid, NTPC, BHEL all will have bright future for long term and if nuclear deal materialises then these stocks will have more value. Remember to pick stocks which have unique model like GMR infra whose business model is different with good revenues assured.

At present try to enter the market for quick gains and be prepared for small losses in case market is volatile. If you are a long term investor then stay put with your zero cost stock portfolio. Use this opportunity to add some more zero cost stocks to your portfolio.

I will keep you guiding on a daily basis. Please post your feedback in this blog by leaving your comments.