Jimeet Modi
CEO, Samco SecuritiesThe founder of SAMCO Securities and the Indian Trading League Company, Modi believes that price is the most important factor in investing. He is credited with developing the AIRM (TM), an approach to screening stocks and businesses in a scientific manner. His role model is Warren Buffett.
Market looks tired after running marathon for 30 days; trade with stop loss below 8,500
The market began the week in celebratory mode on hopes of a rate cut by RBI, but was disappointed on status quo. Seldom people get what they want. It is the element of surprise that excites the market.
For example, during the demonetisation drive, the sector on which the worst was supposed to befall was jewellery and their stocks were hammered like never before. This week when Titan came out with the quarterly results, it surprised everyone.
The company posted 15 per cent growth in sales, which proved everyone wrong. This episode revives the age-old saying in the market that “everything is discounted in the price” and “the collective wisdom of the market is superior then each one of us individually, no matter how high the IQ may be.”
By the time quarterly results were announced, the stock was already up 30 per cent. Thus, investors should keep on accumulating such great consumer-focused consumption-related companies for long-term investments.
Events of the week:
The spat in the Infosys board highlights the resistance to 100 per cent professionalisation of management of the companies in India.
Recently, Cognizant was in the process of replacing three permanent board members by independent directors a solid proof of professionalism in running the board, which is a diametrically opposite stance that Infosys founders have taken here.
However, corporate governance is a vague terminology, which is easily used by anyone, who wants to paint a negative picture about a professionally-run company. Law must strictly define the term.
Technical outlook:
The market has strong underneath strength, which is making corrections shallower and shortlived. The market had a runup for 32 days, which statistically makes it ready for a correction.
Whether such a correction will be sharp or sideways only time will decide, but the odds are again the market going up too far in the short term.
Traders should be cautiously bullish. Long positional trades should be trailed with stop losses below 8,500. Traders should buy on dips while investors should hold on to their portfolios.
Expectations for the week:
The ongoing rally seems to be taking a brief pause. Sentiments are bullish. Although the indices may be moving in a narrow range, sectorally the stocks can still rise on one pretext or the other.
For example, the forthcoming IPO of Dmart has kicked off a rally in the retail chain companies. The quarterly earnings are better than expectations.
PSU banks have disappointed on the NPA front, but nonetheless they have reported improved profitability. The government proposal to scrap old commercial vehicles, if implemented, would in a small way kickstart the spending and consumption cycle in the economy.
The undercurrent of the market is strong. However at higher levels, the market could turn jittery. Investors should stay put on their portfolio.
The Nifty50 closed the week 0.17 per cent higher at 8,793.
( Views and recommendations expressed in this section are his own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position .)
For example, during the demonetisation drive, the sector on which the worst was supposed to befall was jewellery and their stocks were hammered like never before. This week when Titan came out with the quarterly results, it surprised everyone.
The company posted 15 per cent growth in sales, which proved everyone wrong. This episode revives the age-old saying in the market that “everything is discounted in the price” and “the collective wisdom of the market is superior then each one of us individually, no matter how high the IQ may be.”
By the time quarterly results were announced, the stock was already up 30 per cent. Thus, investors should keep on accumulating such great consumer-focused consumption-related companies for long-term investments.
Events of the week:
The spat in the Infosys board highlights the resistance to 100 per cent professionalisation of management of the companies in India.
Recently, Cognizant was in the process of replacing three permanent board members by independent directors a solid proof of professionalism in running the board, which is a diametrically opposite stance that Infosys founders have taken here.
However, corporate governance is a vague terminology, which is easily used by anyone, who wants to paint a negative picture about a professionally-run company. Law must strictly define the term.
Technical outlook:
The market has strong underneath strength, which is making corrections shallower and shortlived. The market had a runup for 32 days, which statistically makes it ready for a correction.
Whether such a correction will be sharp or sideways only time will decide, but the odds are again the market going up too far in the short term.
Traders should be cautiously bullish. Long positional trades should be trailed with stop losses below 8,500. Traders should buy on dips while investors should hold on to their portfolios.
Expectations for the week:
The ongoing rally seems to be taking a brief pause. Sentiments are bullish. Although the indices may be moving in a narrow range, sectorally the stocks can still rise on one pretext or the other.
For example, the forthcoming IPO of Dmart has kicked off a rally in the retail chain companies. The quarterly earnings are better than expectations.
PSU banks have disappointed on the NPA front, but nonetheless they have reported improved profitability. The government proposal to scrap old commercial vehicles, if implemented, would in a small way kickstart the spending and consumption cycle in the economy.
The undercurrent of the market is strong. However at higher levels, the market could turn jittery. Investors should stay put on their portfolio.
The Nifty50 closed the week 0.17 per cent higher at 8,793.
( Views and recommendations expressed in this section are his own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position .)
