23 June, 2018
It’s a subdued day in trade but we believe monsoon
and earning season will be a great trigger for the
market to cross resistance of 10850,10950. As per
our analysis earning season will be great and this
year due to early monsoon things will be better
placed.
Crude prices are also consolidating and is down 10%
from the highs which is great news for our economy.
FM is on record said GOVT is committed to meet
fiscal deficit of 3.3% this year. Due to rising crude
prices question were been raised on fiscal deficit. We
are confident on the current Govt and we also
understand Modiji and team can perform magic.
Hold Long
Midcap buying has started. We were conviced that
rally has got to come but our conviction just got
delayed by 2-3 days. Finally Big boy Rel was in action
supported by banking stocks.
Huge short building has happened in the banking
sector from last few months at every level and we
righly beleive that time has come banking sector will
see strong revival from current level 1) Bears will go
for a toss 2) As per sources some announcement is
likely in this sector. So start accumulating bank
Stocks like Jain irrigation , Camlin, Dlf, Tata motors
looks a goood bet.
As said earlier Rec and Pfc Looks good. SREI short
term trading bet.
Only seven days left for rolls hence market has to
show its colour. I feel Nifty will close around 10900
and will show 11500 in JULY. FII have been sellers
as usual but someone is buying at every fall. Market
is oversold and there is absolute fear and greed
working. Buying in fear time always yield rich
dividend. We are always buyers in such time as we
know the destination. If we can die for 8% returns in
FD why can’t we take risk in select stocks and earn
20% in a day. Vakrangee e g however bad is the
stock after crash from Rs 700 to 32 has bounce back
to Rs 50 and may rise to 80 100. Those who have
taken risk at Rs 32 may get good 100 % returns in
this stock over less than 30 days.
Many stocks are under consolidation. One such stock
seems to be RDB rasayan as something big is
happening in the industry. Keep watch. This stock
can give excellent returns over a period of time as the
sector is improving but vacuum is rising due to gap of
supply and demand. Some big players in the sectors
are under stress and hence smaller players may
benefit.
API is still a great buy. Look for cos with big
capacities.
At certain point of inflection market stops falling. yes, I mean it. You have seen it that Nifty did not correct
beyond 10500 whereas all midcaps were washed out. We have no choice and alternative as most of the
traders which constitute 90% of the market likes only MIDCAPS. Most of the fund managers and PMS guys
were long in MIDCAPS and short in NIFTY and hence the result is before you. Can you ever imagined that you
will get INDIA Cement close to rs 100 which was the price of Nifty 6000…? But this is reality and no 1 will buy
this stock at this point in time. At Rs 170 again the bullish charts will bring all traders on this counter. What do
you call this..? Does is not show that even this A gr stock has a operator…? Well without operator nothing
moves in stock market.
We are 4 sessions away from rolls and the position suggest that market cant fall. What does this mean…?
Yesterdays fall and today’s weakness is complete manipulative. My advice is do not remain short in Nifty. OI in
JULY is just 14 lacs whereas in JUNE it is 2.48 crs shares. Buying 2 cr shares would definitely pull Nifty to
10900.
Now it is just matter of time that Nifty will cross new high and mid caps starts firing. I do not when but very sure
this is bound to happen very soon as market is oversold.
Elections are in MAY 2019 and we are in JUNE 2018 and hence for next 12 months we can’t be in limbo. We
have already spent 4 months asylum where valuations have eroded 50% in mid caps which is biggest ever
setback to investors. Shaken badly no 1 is likely to come forward till 12000 for good buying this is the precise
game.
Global Story
As told to you the oversold markets did not go below 10500 and bounced back to 10800 in style. No rolls so far clearly
suggest some upside in Nifty. We see Nifty settling around 10960 10990 range before the expiry and if cross and hold
11000 then there could be more upside as markets are overly short thanks to fear and greed. The fear is not allowing
even good investors to time the market whereas the PMS sell off continues. FII withdrawing is on though DII are pulling in
money. Investors are bogged down with continued FII selling as well the political uncertainty without applying own minds,
They are governed largely by social media and keep on rotating their views only on one question if NAMO does not come
to power again then what..?
Elections will be held in 2019 MAY hence for almost 12 months market cannot remain in limbo. We have already spent 4
months in huge correction in mid caps which were over owned. At certain inflection point market stops falling and this is
seen visibly. This inflection point is reached in our opinion as far as mid caps and small caps are concerned. Correction
was as huge as up to 75% hence you can’t expect this to reach to 100%. Valuations are compelling.
Investors generally try and time the market. They do not buy when everyone sells. They will come for buying once the
stock gives break out. e g ICICI Bank was available at Rs 250 thanks the CEO controversy. No one bought. Rather there
were heavy short selling. Now stock has moved to Rs 300 and above Rs 302 there could be a technical break out and you
can see whole street will come for buying at 308 310. Those who bought as contrarian bet at Rs 250 will be in 30% profit
in less than 2 months giving annualised return of over 180% as against normal 20% returns expected in A gr shares.
There are good amount of opportunity in many mid cap stocks like JAIN IRRIGATION, DLF, MANNAPURAM, Srei,
JINDAL SAW, UJJIVAN, TATA MOTORS which have corrected big time. These could be contrarian bets as little recovery
and change of market mood will give you over 30% returns in 2 months. So it is up to investors to buy now or wait for
technical break out. eg Tata Motors has corrected from Rs 460 to 278 levels and now reversed. But major break out is
only above Rs 460. Just imagine the break out has to come in this counter for sure but before even break out comes, may
be in 6 months, you will be 50% profit. This is exact replica of TISCO couple of years back. Tisco kept on falling from Rs
600 to 200 and its reversal gave us huge profits. We entered TISCO around 220 and the break out was Rs 400 and after
400 we continued to hold and made our cost zero. Now with zero cost you can wait till Rs 1500.
Wherever we go, whosoever we met there was unanimous opinion that INDIA is doing well, organised businesses are
doing well, black marketing has stopped, now 2 trade is stopped, parallel economy has come to an end, all major cash
transactions are being recorded by I T department leaving no scope of tax leakages. I T department has created special
Intelligence and criminal investigation department over and above FIU. Any person spending in cash in big way or taking
income in cash in big way will be in I T net now. GST and E way made further inroads to kill the black economy. This is
appropriate time for GOI to scrap INCOME TAX even at the cost of raising GST by another 2%. GST is on sales whereas
IT is on INCOME hence even 2% GST can cover 35% tax. This will make INDIA 100% tax compliant in days to come.
Also it is appropriate time to re introduce Section 80 HHC which will boost exports many fold. Earlier bogus export billing
by few sectors had made Govt to withdraw the export tax incentive. Now with GST in play bogus billing is just impossible
hence Govt can bring back section 80 HHC. Exports is the only area we are lacking. If we export more we will be able to
import more technology. The day our exports raise above imports the Current Account position will change so also the
INDIA stance on the Re Dollar rate.
Hon’ble PM has expressed that in order to become 5 trillion USD economy our GDP has to grow at 10% at least. This
means the efforts of the Govt are towards raising the GDP to 10% which I had believed will happen over course of time.
Yes, we are heading for 10% GDP in next few years and hence our target of Sensex 85000 is on course.
Indian markets are re entering the golden era of physical settlement after 4 days. The physical settlement will make
INDIAN markets more matured and devoid of less manipulation. The clean up exercise in last 4 months was once in a
decade kind. We had reported that this kind of correction had happened only in 2013. It is after 5 years the fate is
repeated. The impact was comparable tsunami; no it was financial tsunami which have eroded dented major traders and
investors. Hence you can treat this as a reconstruction period. Post destruction the new construction is always beautiful
and you will see the same in coming years.
Next 4 days we believe that market should go up as till Friday the rolls position was zero. We will not be surprised to see
market making new high in JULY as new high is not too far now. On Karnataka election results day Nifty had made high of
10918 and hence that will work as resistance which we believe will be easily crossed. Now only 11000 will work as major
resistance as huge call writing has been done. Remember it always remains in the hands of operators to draw the closing
call. In Feb 2018 the call writing was at 10500 and Nifty had crossed 10570 though on the last day it did close at 10479.
Publisher:
Mr. Kishor Ostwal
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Sahar Road, Vile Parle (East),
Mumbai-400057
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E-Mail at: chamatcar@chamatcar.com
