Markets: What next?

Well,Its been an amazing few months, with a rally of almost 77 pc on the Nifty.The next few triggers are:1. Good monsoons2.Pre-Budget Rally.The point to note about the budget is that it will be in the first week of July.Expectations are being built in sky high from divestment to FDI in Retail and what not.Usually, when such high expectations are built in they tend to disappoint.Prudent strategy would be to book profits on every rise.At 4448, the Nifty is at a trailing P/E of 21.Till the budget, the likelihood of a severe correction is less.On the...

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Elliot Waves and the Sensex

This week I thought I would take a break from Fundamental Analysis and talk a bit about the Elliot Waves.More about Elliot Waves can be learnt from www.elliotwave.comWhat are Elliot Waves?The Elliott Wave Principle is a detailed description of how groups of people behave. It reveals that mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific and measurable patterns. One of the easiest places to see the Elliott Wave Principle at work is in the financial markets, where changing investor psychology...

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P/E Study: Past history

I did a study of the Nifty P/E Ratios from the NSE site.What is a P/E ratio? It is the price to earning ratio. It is the number of times premium you are willing to pay for a current year profit.Another thumb rule is your P/E ratio should be the % growth expected.IT stocks had a P/E well in excess of 50-60 during their golden years.On Jan 8th 2008, when the bull market peaked the P/E ratio was 28.3. In Oct'08 it bottomed out at 10.58.During the period September 2007 to Jan 08, when the market got overheated, P/E was between 21 to 25.At the time,...

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Elections over: What next?

The public has voted. All the votes have been counted and the winners take away the spoils. It was the best possible verdict (other than clear NDA victory).The people who held the country to ransom have been shown the door. Manmohan Singh has proved to be a much better politician than most. First the nuclear deal and then this. If we break the results down, the Congress has won mainly because of UP, Kerala, WB, rajasthan and AP.The real surprise has been AP and they deserve to win, they saved Satyam. Satyam going down would have been real bad news...

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GM Results, Stress Test results and Great Expectations

This was an eventful week in the US. This week probably sowed the seeds of a bear market rally in the US for at least till the end of June.There are several factors for this.The Stress Test results were out. It portrayed a hunky dory picture for the US banks. Obama is doing well to play up the sentiment. The banks need help but not too much. We are on our way to recovery. Throwing money at Banks has helped. There is always a free lunch out there. We just have to print US dollars and the only cost to pay is the cost of printing those notes. That's...

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U, V, W or L

Hi, Its time to take a break from stocks and re-learn the alphabets. Have you guessed it? We are looking at the types of recovery possible for the US economy and the World Economy. 1. V Shaped Recovery In this type of recovery, there is a rapid deterioration in the economy and before you know it there is a sharp recovery as well. V-Shaped recoveries are less painful and are are the mild recessions last for about 1 year. We are way past this stage to say that there would be a V-Shaped Recovery this time. 2. U Shaped Recovery In this type, things...

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