The Crash( 17.5.2006) and FII activities since then

[mahmeds2000]

Hi all,
This is one broker view after the close of the market i like it so wanted to send here.

Three years down the line ghost of disinvestment came into play which kept on disturbing investors to keep market volatile. Then came in Indian politics and then the monsoon ghost. Now Indian investors have become foolproof to all three ghosts whing made FIIs and market drivers to create a new GHOST.. interest rates. Never heard of panwala and chaiwala talking interest rates. Will their business affect if interest rise? Consequentially the ownership is lost once again and we will try to regain the same only at 12500 for losing at 16000.

One more ghost is waiting for you in July i.e Bank of Japan which will not allow market a smooth ride. Roller coaster movement will be there till 13th July when BOJ will hold their meeting. Even that balloon will get burst and real onset of Bull Market will unfold. Well by end July Monsoon nos will turn favorable because nobody on earth is ready to understand the cycle of nature has changed by 30 days. Earlier by Sept first week monsoon used to be over now it is in Oct. 14th Jan was known as end of winter now we feel equally cool in early Feb. June is known a recognized summer instead of onset of monsoon

Well "all is well if it ends well" is the quote people follow but I believe is "all is well if it begins well". From 8800 I have brought to you to 10600 and likely to take you to my second target of 11000. Whether we require a breather at 11000 will be decided when it hits target.

Meanwhile those who are sitting on cash should start buying stocks which you like. But buy in bulk so that you see at least part recovery. Idiots are still barking that even 25 basis point is negative; please tell them this is the 17th consecutive quarter and yet no slow down has been seen. At least next 4 quarters I am not worried then why discuss the ghost now?

from
Ahmed

 

[munchikana]

Hi czar

I think to fully understand their strategy we have to explore all the areas where they are invoved in: Spots, index futures, index options stock futures and stocks options and anything else. They will be setting us up for another round of trip to moon and back

Pankaj

There is no question of bringing us back from moon. We will be simply pushed down to earth.

I have read some reports which says there may be rally in July- August with downward trend in sep-oct thereafter big rally till march 2007. If by then Fed says no more hike then upto 2008 it will be a boom time. But by 2010 a fullfledged bear market. I think this idea stems from the cyclic understanding of market in a four year mega cycle and follows the analogy in American presidential cycle of boom and bust

After Reading lot of gloomy reports , I am convinced that we are really in a mega bull cycle lasting 10 years starting from 2003 till 2012 with, what Saint called ,intermediate downturn due to several concerns raising their heads at different time.

This may be the second opportunity( first one in 2004) to enter that sonic boom at its lowest point. This window of opportunity will be available for another two or three months at most before we get propelled into different league.


Pankaj

On a more serious note, we require the much needed help of Elliott Wave specialists of this forum. I am taking baby steps here. My views may be or may not be correct (specialists of elliott wave theory/learned members of this Forum please comment on the views expressed herebelow)

(1) We are now in the fourth wave of correction. To be precise, B wave of ABC correction. May be that we are in for a rally in the immediate future to complete this B Wave and thereafter one more push down to complete C Wave and along with that to complete the fourth wave itself. I am interested to see whether at the end of wave C, we are going to witness double bottom or inverted head and shoulder pattern also.

(2) Thereafter, the fifth wave.

(3) Thereafter the long correction. Erasing the bull market from 2003 April to the end of fifth wave. Remember, the entire bull market from April 2003 will not be erased. Elliott wave theory does not envisage such a correction. Correction could be up to the bottom of fourth wave at the maximum, i.e. bottom of present ABC correction.

Dear Pankaj, the views quoted by you is some what tallying with the above described broad elliott wave pattern.

Note of caution may be appropriate here. I am not an elliott wave specialist. Just a beginer in this area. Learned members please, please comment. If my views are wrong, please tell me where I am wrong and why I am wrong. Your suggestions are most valuable.
Thanks in advance

 

[Czar]

dada, the dow did bow bow y'day & today not even a follow up meow, duniyaa ko ek din ka dhokaa

 

[pkjha30]

Hi

With such a strong closing who could be left behind.

Here is FII details from NSE

FII trading activity on NSE and BSE in the Capital Market segment(In Rs. Crores)
Date-- Buy Value --Sell Value --Net Value
30-Jun-2006--- 1734.77--- 1578.7--- 156.07
Total for June 2006--- 37864.81--- 37073.19---- 791.62


And SEBI figure

Debt/Equity ----Gross Purchases(Rs Crores)---- Gross Sales(Rs Crores)---- Net Investment (Rs Crores)---- Net Investment US($) million at month exchange rate
30-JUN-2006--- 1747.30--- 2027.60--- (280.20) ----(61.70)

Total for June 2006---39783.10---- 39303.50---- 479.50 ----- 105.70


And Our MF saviours

Reporting Date --- Gross Purchases(Rs Crores)--- Gross Sales(Rs Crores) -----Net Investment (Rs Crores)---- Net Investment US($) million at month exchange rate
30-JUN-2006 ---- 1747.30 2027.60 (280.20) (61.70)

Total as on June 29.6.2006 ----7080.78 ---9489.44 ---(-2408.66)


So where our FII friends were slowly accumulating stocks, rotating sectors, white night in shining armour were on selling spree to keep prices depressed. May be they were selling to FIIs as retail purchase may not be much.

In any case data says they are insignificant in comparison to total trade .



The world markets were on high bear and acting bullish. Today all markets closed on higher notes without regards to all the bearish arguments traded so far by analysts and membersof general public. Something changed overnight. It was much anticipated event and factored more than that. I think fear factor held investors back and passing away of this event smoothly led to catharsis. A flood of suppressed desires from a teenage boy. Social economics has much relevance here. Karthik is very correct in summing up that mood is one of the prevalent factor.GFH factor also explains it well.

Today , as I am writing this , DOW and NASDAQ is showing signs of sobriety and have fallen to the opening line. I suppose they will close in red. But then it is a folly to anticipate the market.


One more thing that came to my notice is that bullish undertone of the market remains intact. In the entire period starting May 11th it was never broken though threatened. As of now we are still in the range of 9500-11000 as told earlier. Once we cross that we will be in the next level. The way market jumps up and down, I may not be surprised if we finally close FY06-07 by 15000. Next two months people should be using their study to accumulate good stocks. Traders will have very good time as market as such will be in trading range and many of them would be able to cover their losses. FIIs will , as usual, be winner by large margin for a simple reason that stakes they play for is much higher.

Foreign analyst are telling positive things with usual cautionary notes. One person reminded us of Truman who wanted analyst/economist with one hand so that while giving advice they would not be able to say..." on the other hand"

I can't comment on the graph pattern much but to my untrained eye it apperas that we are on uprend and bottom is long over. If we draw a line from 2003 till date and connect all the bottoms it is a ascending line with no sign of break below that. Even In PE ,we have noticed such a pattern.

The reason being the economy is growing. Yes we have probles as Karim of Agora wants to drum into us. But Fact remains that our country is growing at a higher pace. With reforms continuing, it will be sur development has to be inclusive. We need not worry what other thinks of us.

We have to believe in us and our country. Our market will have to reflect our growth and Foreign money has its advatages and disadvantages and we may have to take that into account.

Hi munchi, what I told about indices is based on cyclic theory based on American Presidential elections and our market tends to reflect it. May be subconciously, I am following elliot wave analysis. It is always good to see confirmations coming from other sources, morale boosting. But I would be wary of predicting day to day market or even month on month market. I am a firm believer that before we reach the true bear market, one day that will happen when this super cycle of catching up with developped world ends, we will be growing on year on year basis.

I have faced a moral dilemma that by firmly believing and openly stating my belief in a forum, am I causing harm to the members who may come to rely on such belief. To all such members I have to apologise and state that if you are in a strong company and keep watch and follow discipline we will see protfolio growth on LT basis. Aim no more than a reasonable return and respect the market. Never comit the folly of counting it as a gambling den.

It will reward you amply, even if it be a bear market.

Pankaj

 

[pkjha30]

Hi all,
This is one broker view after the close of the market i like it so wanted to send here.

Three years down the line ghost of disinvestment came into play which kept on disturbing investors to keep market volatile. Then came in Indian politics and then the monsoon ghost. Now Indian investors have become foolproof to all three ghosts whing made FIIs and market drivers to create a new GHOST.…. interest rates. Never heard of panwala and chaiwala talking interest rates. Will their business affect if interest rise…? Consequentially the ownership is lost once again and we will try to regain the same only at 12500 for losing at 16000.

One more ghost is waiting for you in July i.e Bank of Japan which will not allow market a smooth ride. Roller coaster movement will be there till 13th July when BOJ will hold their meeting. Even that balloon will get burst and real onset of Bull Market will unfold. Well by end July Monsoon nos will turn favorable because nobody on earth is ready to understand the cycle of nature has changed by 30 days. Earlier by Sept first week monsoon used to be over now it is in Oct. 14th Jan was known as end of winter now we feel equally cool in early Feb. June is known a recognized summer instead of onset of monsoon

Well "all is well if it ends well" is the quote people follow but I believe is "all is well if it begins well". From 8800 I have brought to you to 10600 and likely to take you to my second target of 11000. Whether we require a breather at 11000 will be decided when it hits target.

Meanwhile those who are sitting on cash should start buying stocks which you like. But buy in bulk so that you see at least part recovery. Idiots are still barking that even 25 basis point is negative; please tell them this is the 17th consecutive quarter and yet no slow down has been seen. At least next 4 quarters I am not worried then why discuss the ghost now…?

from
Ahmed

Hi Ahmed

These ghosts will never leave us, not in the past nor inthe future. They are bread and butter of economists and analysts and brokers.Else what would they do for living. Nobody will have any use for them. Look around us and see if ghosts are affecting development then only it is a real ghost.Else keep them at bay

Pankaj

 

[pkjha30]

dada, the dow did bow bow y'day & today not even a follow up meow, duniyaa ko ek din ka dhokaa

Hi czar

You gave so much bear that Dow lost its direction and will suffer from Hangover. Don't worry, there are enough neembu paani to make them sober in the morning.

Pankaj

 

[Czar]

dada sabka baap BOJ announcement is due on 14th will make Fed look like an ant...

 

[pkjha30]

dada sabka baap BOJ announcement is due on 14th will make Fed look like an ant...

Remember its near zero to 0.25% People know it and factored it. Initial fear was bank of Japan Remember JUBAK discussion.
Pankaj

 

[Czar]

well to factor in is usually after it comes out, till then our beloved speculation continues... also initially they postponed their decision in june, so the chatter died & fed rose like satan...

 

[pkjha30]

Hi

Just a brief take

DOW and NASDAQ both closed around or near their previous closing after opening high and buckling under selling pressure at the last moment.

Well . the implication is every rise will bring supply and depress the prices on every round of profit booking.
But all the four charts including dow, nasdaq sensex and nifty is showing remarkably similar features and movement.

The uncertainty of BOJ, corporate earnings and monsoon drama etc will keep markets quite choppy but on uptrend. As the indian growth is not as hot as china so there is no need of slowing down of economy but inflation will have to be contained for a sustained growth.

The market will as usual chalk out a zig zag path but from 2632 and above it appears we have firmly crossed the rubicon and will go up while consolidating. One thing needs to be kept in mind not all stocks will go up at the same time or come down in synchronous movement. Some will move at a later date.

The period will be that of consolidation and accumulation.

Pankaj