The Crash( 17.5.2006) and FII activities since then

[Saint]

Hi Rajesh

These issues had been discussed in this thread and Kuldeep's , TATRADER's posts to some extent when ever PN matter has dominated the market and media and its likely impact.

http://www.traderji.com/48444-post364.html



http://www.traderji.com/48383-post351.html on june 22nd 2006



http://www.traderji.com/57511-post79.html by kuldeep on 3rd sept 2006



http://www.traderji.com/23993-post4.html by TATRADER on 16th oct 2005



http://www.traderji.com/6575-post1.html TATRADER on 9th march 2005



Basically what I want to point out is that members here are very much alive to this problem of PN route to FII investments. I had outline details of the processes involved and instruments available to FIIs for investment in Indian Stock Market.
http://www.traderji.com/46530-post1.html
This forum is easily the single most valuable source of information to investors and traders alike.
The lesson that I learnt from members here is very simple.

Respect market and don't expect unreasonable returns.

If market is behaving unreasonably and one is intermediate term investor then get out and wait for opportune time.

Members have always discussed all relevant issues . and of course FM knew so he warned investors(not traders ) to be cautious two days before.

Pankaj

Thanx Pankaj!

 

[reachjesal]

The draft proposal was issued yest. evening stating P-note derivatives cannot be rolled over from next month , that triggered a fall . why on earth did'nt the chairman Damodaran or FM come on media BEFORE MARKET HOURS and clarify regarding this issue when the intent was not the same ? FII's have been net buyers in FNO CASH for the past 10 days and were net sellers just the day before the draft came in.
Both the FM and the Chairman should have been dragged to the media sets (as they were soley responsible) and asked them to clarify the issue BEFORE MARKET HOURS , am sure that wouldnt have created a panic in the morning.
This shows how policy makers can mould and form a syndication among themselves.
is this what you call REFORMS!
GOD SAVE INDIA !

 

[pkjha30]

Clarification



Clarifications have been sought on para 1 of the Proposed Measures in the draft discussion paper on Overseas Derivatives Instruments (ODIs), with Indian Exchange Traded Derivatives as underlying.

With regard to the above, it is made clear that there is no proposed bar on ODI contracts, expiring this month or in the following months, being renewed, provided the renewal does not go beyond 18 months.

It is further made clear that this proposal does not in any manner seek to restrict renewal or rollover of Indian Exchange Traded Derivative Contracts by the FIIs.

Mumbai

October 17, 2007

No Stomach for tough measures. Rules might come into play but in a little diluted form. This is called Modern Day Reforms Chidambaram Style.


Any way this whole episode would make investors think that market is really never going to stop going up.Invitations are further strengthened. Be careful for new investments. FIIs will end up selling huge chunk in this run up.They are all giving very bright outlook. But mind you market is heavily dependent on FII buy and sell activity.

pankaj

 

[mahmeds2000]

Thanks pankaj,
Thanks a lot for all ur post. just after a very long time today i visited the traderji and had smile after watching ur thread . Just I have gone through all ur post Its really very right time for this thread to be active.
Actually i am not feeling comfortable at this level so i had alrady sold 40%. Now i am feel a major correction on card as market have disscount many bad news like crude oil. And i think correction/ crash will be sharpest than ever. I can't calculate the bottom but i think it may be till 12500 and the trigger will be P notes. Whats ur view dada ?

Ahmed

 

[pkjha30]

Thanks pankaj,
Thanks a lot for all ur post. just after a very long time today i visited the traderji and had smile after watching ur thread . Just I have gone through all ur post Its really very right time for this thread to be active.
Actually i am not feeling comfortable at this level so i had alrady sold 40%. Now i am feel a major correction on card as market have disscount many bad news like crude oil. And i think correction/ crash will be sharpest than ever. I can't calculate the bottom but i think it may be till 12500 and the trigger will be P notes. Whats ur view dada ?

Ahmed

Hi Ahmed

Nice to hear from you. Actually , I have no technical idea of the market except that during extreme conditions assumptions of TA aren't valid.
In this volatile market, only hardened investors and Traders would survive.
others would simply loose money due to whiplashes.

FIIs would always be making profit by selling in huge quantity and also buying in huge quantity both in deliveries and derivatives.Run up to last 2000 points in SENSEX withing 7 or 8 days is what caused uneasiness. So there will be corrections and it may go upto 12500.In fact in my opinion correction was overdue from 15000 where sensex should have corrected to 15 to 20% that comes to 12750-12000.(33.3% correction from 19058 is around 12098). Even 200EMA seems to be on that line.In previous crashes, SENSEX has taken support from this line on a long term basis, ig Bullish trend(Primary Trend) is to remain intact. But on a short/intermediate term basis we are in for turbulence.

the only good thing is that we are at the start of the earning seasons and some "better than expected" performances would moderate this correction.

With this type of circuit breaking falls and misplaced optimism would cause more harm. Saint in his thread"To teach...Fish" has aptly stated that plan your trade and trade your plan. If you fail your plan , you plan to fail. So stick to that wise word of HIM and as for investors I have only one advise all stock will be available at lower prices somewhere during next two months. So wait for trend to set in before you invest.

Indian Story is intact but enter at reasonable prices.

Last time there was no caution before crash. Members have become wiser but still there did not seem to be any nervousness that I felt so I put some of my rudimentary ideas in this and other posts few days back.I think someone joked also that my posting at this time when sensex is at highest, fall would not be behind.(all in good humour).

that is my view ahmed.


Pankaj

 

[mahmeds2000]

Hi Ahmed

Nice to hear from you. Actually , I have no technical idea of the market except that during extreme conditions assumptions of TA aren't valid.
In this volatile market, only hardened investors and Traders would survive.
others would simply loose money due to whiplashes.

FIIs would always be making profit by selling in huge quantity and also buying in huge quantity both in deliveries and derivatives.Run up to last 2000 points in SENSEX withing 7 or 8 days is what caused uneasiness. So there will be corrections and it may go upto 12500.In fact in my opinion correction was overdue from 15000 where sensex should have corrected to 15 to 20% that comes to 12750-12000.(33.3% correction from 19058 is around 12098). Even 200EMA seems to be on that line.In previous crashes, SENSEX has taken support from this line on a long term basis, ig Bullish trend(Primary Trend) is to remain intact. But on a short/intermediate term basis we are in for turbulence.

the only good thing is that we are at the start of the earning seasons and some "better than expected" performances would moderate this correction.

With this type of circuit breaking falls and misplaced optimism would cause more harm. Saint in his thread"To teach...Fish" has aptly stated that plan your trade and trade your plan. If you fail your plan , you plan to fail. So stick to that wise word of HIM and as for investors I have only one advise all stock will be available at lower prices somewhere during next two months. So wait for trend to set in before you invest.

Indian Story is intact but enter at reasonable prices.

Last time there was no caution before crash. Members have become wiser but still there did not seem to be any nervousness that I felt so I put some of my rudimentary ideas in this and other posts few days back.I think someone joked also that my posting at this time when sensex is at highest, fall would not be behind.(all in good humour).

that is my view ahmed.


Pankaj

Thanks a lot sirji.


Ahmed

 

[bombaytrader]

12500 is like a 35% fall. And once a market falls 35% its longer just a correction. If the markets are indeed going to just correct and then move back up after this fall then it will happen much before 12500. If indeed the market gets to 12500 then the recovery could be a long process. I mean do you imagine people who think that india is going to grow, wont find value in reliance, icici, sbi, bharti, ongc much before they fall 35%. I dont know the numbers but if you asked me I would put my money on everything being rosy 2 months from now.

 

[Czar]

Sirji 12.5 k means bull market finito long before that....

 

[pkjha30]

12500 is like a 35% fall. And once a market falls 35% its longer just a correction. If the markets are indeed going to just correct and then move back up after this fall then it will happen much before 12500. If indeed the market gets to 12500 then the recovery could be a long process. I mean do you imagine people who think that india is going to grow, wont find value in reliance, icici, sbi, bharti, ongc much before they fall 35%. I dont know the numbers but if you asked me I would put my money on everything being rosy 2 months from now.

Thats right. It is an alarmist view.But then in one years+ time you might see 25000 or more before another major correction, as primary trend would be intact. It may not come to that drastic fall in one day or two or may not happen. It would be quite foolish for us to predict or time the market. In May 2006 when Market went from 12000 to 8700 that was around 30% correction for a period of two to three months.But it did recover to close at more than double the bottom of May 2006.

If you search threads some of these mentioned by stocks were recommended by nkpanjiyar and also by me during January 2005. they have appreciated much more than normal target price for each of them. I would also think that such stock would constitute bulwork of one's portfolio if held for sufficiently long time. And such corrections are added opportunity to enter them.

And Czar , no Bull market would not be over . What I said is if deeper correction happens, market has taken support at that point and bounced back.If that line is broken then only we (long term investors) may have some cause for worry.That is if we can take 6 times the profit then we should be ready to face some loss as well or may be exit from market when it gallops 2000 points in 8-9 days.

Traders would have entirely different strategy with which I am not familiar and don't comment on that.

As for me I am B&HF type, Buy & hold Fools. but only as long as I am convinced trend is long term bullish(either index or specific stocks.).
No FNO for me so I sleep well and watch cnbc mumbo jumbo from their beauties and the beasts. And I don't understand a thing

pankaj

 

[amitt29]

Agree with Czar.