Hi all,
PHP:
I am little tied up with work.
You know, if we work hard and diligently then only India will be bullish
Will try to post today.
Its ok Dada. You have done a lot work for us. I know how much time it will take to write. And in todays world as maximum are selfish but u r doing great work free of cost. So keep it up our prayer is with u. Also if some day u are busy than no problem its ok. The only thing is what if u was not posting i was affraid weather u was ill.
Another thing i wanted to post a broker's view over here.
On the markets, whatever the pessimists may say, I remain optimistic about the resumption of the bull phase sooner rather than later. I am sure you will agree with me that if the bear phase has to start in earnest, it has to be supported by huge volumes. The basic volume theory includes the maxim that decreasing volumes with a decline in price is bullish. Moreover, historically, the majority of BULL/BEAR MARKETS have originated with atleast two days within two-month period where upside/downside volume is atleast nine times greater than the downside/upside volume.
In other words, accumulation or distribribution takes place, as the case may be. FROM WHAT I HAVE TRACKED SO FAR DURING THE LAST TWO MONTHS SINCE THE CORRECTION BEGAN, I HAVE NOT BEEN ABLE TO WITNESS ANY SIGNS OF DISTRIBUTION TAKING PLACE. True it is that some FII's, along with MFs, have been off-and-on sellers. Some HNI or retail investor selling might have also taken place. But operator-selling, I believe, is conspicuously absent, other than sporadic sales on select bad days.
I would like to go back to the last bull phase in 1999-2000, when we had near-100-baggers in ICE counters. At the onset of that bull phase, values across the board soared, something alike we saw from 2003 onwards, and then, even as ICE valuations continued to rise, other heavyweights either stagnated or declined. Quite a while ago, I had indicated in one of the messages that sooner or later only "select-sectors" would be singled out for subsequent rise, while others would fall out of favour. I AM INCLINED TO BELIEVE THAT THIS IS EXACTLY WHAT IS HAPPENING WITH THE ONGOING CORRECTION.
The question to be asked now is this: Which are the sectors which saw a huge rise during the period April 2003 to May 2006? In my view, Constructions would take the No.1 spot, simply because dozens of scrips there turned out to be more than 20-baggers during the period (UNITECH, NAG CONS, HCC,MORARJEE, ANSALS, IVRCL, MAHINDRA GESCO, to name but a few), followed, to a smaller extent, by Capital goods/engg, auto/auto ancillary, hotels, telecom, apart from a few other index heavyweights.
During the carnage of the last 2 months, isnt it ironical that that No.1 spot itself has been battered the most, with valuations across the sector beaten down by a good 2/3rds ? What is more baffling is that on the way up, volumes, which were mostly in excess of a million/day, are down into a few thousands now, the daily downward filters of 5% in most scrips, causing the utmost damage ? Would you say that "distribution" has been taking place there, and it will be all "downhill" even from here onwards? I certainly don't think so.
I recall, during 1999-2000, ICE sectors were the ones which were facing the ultimate bouts of volatility/corrections. Just to quote an example, I bought 3000 SILVERLINE at around rs.360 mid-way in early 2000. After remaining range-bound for some time, it suddenly started dropping and went on to touch as low as Rs.160. Now, if I had panicked or lost my conviction on fears that the bull run is over and the bear period has started, I would have probably exited at the lowest point. However, I held on, and it went to make a new high at around rs.1350, although I did exit in the meantime with marginal profits.
thanks
Ahmed
