Trading with PT style

[praveen taneja]

US Market
Major Averages Climbing More Firmly Into Positive Territory

While stocks moved sharply lower at the start of trading on Friday, selling pressure waned not long after the open and the markets have rebounded since then.

The major averages have climbed well off their worst levels of the day and into positive territory.

The initial weakness came as traders continued to express concerns about the impact of the European debt crisis on the global economy.

However, bargain hunters stepped in after the Nasdaq and the S&P 500 took out the intraday lows set during the "flash crash" seen earlier this month.

Financial stocks helped to lead the way back to the upside, with traders picking up the stocks at reduced levels following recent weakness in the sector.

The strength that has emerged in the sector also comes as the passage of the Senate's financial reform bill has removed some uncertainty.

Most of the other major sectors have also turned higher over the course of the morning, recovering from the recent sell-off. Semiconductor, oil service, and networking stocks are posting notable gains

 

[praveen taneja]

Invest in pessimistic times
Indian equity markets witnessed a speedy recovery from the lows of March 2009. Now, after a great run, investors are beginning to wonder if valuations have become stretched.

To answer this question, we compared the yield of the 10-year benchmark GOI paper with the Nifty's yield. While equity investments are regarded as risky, government paper is considered to be a risk-free investment. So if investors are to invest in equities, they must be compensated with a premium over the risk-free rate of return.

On comparing the yield of the Nifty (1/Price-to-Earning Ratio*100) with that of the 10-year benchmark GOI, we found that currently the GOI's yield is 1.75 times that of the Nifty. In other words, investors are not earning a premium by investing in equities.

If we look at historical data, from mid-2005 until October 2008 the yield of the 10-year benchmark was always higher than that of the Nifty. From October 2008 to March 2009, investments in equities yielded more than the GOI. But from the start of the bull run in March 2009, this began to reverse (see graph). Hence, October 2008 to March 2009 was the best time to invest in equities.

An investor might get discouraged and believe that there is no point investing in equities now. However, remember that the figure we have looked at is the Nifty yield. If you look around, you will still find many stocks that are offering a yield that is higher than that of the 10-year GOI. If the stock's fundamentals are strong and its growth prospects attractive, you could go ahead and invest in it.

The data mentioned here (yield from the Nifty being higher than that from 10-year GOI during the downturn) underscores what John Templeton, one of the greatest value investors of all times said: “Invest at the point of maximum pessimism.”

This article appeared in the April 2010 issue of Wealth Insight

 

[praveen taneja]

Debt keeps realtors in check
2007 and part of 2008 were the golden years for the realty developers. Anything that they touched became pots of money and this gave wind to more and more greed. Realtors took up more and more projects and borrowed unheard amounts of money. And then the markets world over crashed and with it came crashing down this pack of cards.



As per the latest report put out by RBI, the total debt installment to be paid by realtors, scheduled for the current fiscal is at a jaw dropping Rs.25,000 crore. The total debt stands at a staggering Rs.75,000 crore. PSU banks in FY10, allowed a roll over of Rs.10,000 crore and in the current fiscal, they are in no mood to restructure even a single penny of this debt.



The route of QIP is not always easy and not for all. IPO route, for now at least seems to have dried up what with big timers like Lodha, Sahara, Emaar MGF, Oberoi Realty, BPTP waiting for the opportune time to enter, despite having received the go-ahead nod from SEBI. Emmar plans to use 33% of the IPO proceeds to repay debt. Investors as such are not happy with the existing developers, who have huge debt on their books, so will they go for more realtor IPOs? High prices might be keeping off buyers away from buying new homes and also investors from IPOs. Once debt starts getting repaid, it is only then that people will bite the dust.

 

[praveen taneja]

Derivatives Summary
Nifty (May) future discount has narrowed down to 2.75 points
from 6.55 points and 24 lakh shares were added in open interest.
Total open interest in the market was Rs143,710 crore and
Rs3,184 crore were added in open interest.
Nifty call option added 20.81 lakh shares in open interest,
whereas put option added 17.05 lakh shares in open interest.
ITC (48%), GAIL India (14%), Sterlite Industries (13%), Tata Power
(13%) and Ashok Leyland (13%) were the top open interest
gainers in the market.
Indian Oil Corporation (-16%), BGR Energy (-15%), Maruti Suzuki
India (-14%) and Jain Irrigation Systems (-11%) were the top
open interest losers in the market.

 

[praveen taneja]

Nifty has ended the week in red with a close below its 200
daily moving average (DMA), which is a positive sign for
the bears. The momentum indicators are still all in favour
of bears. On the lower side, 4851 becomes a crucial
support, whereas 4944 is a crucial resistance on the upside.
So, this range will decide the further direction of the
market. The Bollinger bands on the daily chart have
expanded, leading to an increase in the volatility, but the
weekly bands are yet to expand as sharply as the daily
bands. And when they do, there will be accelerated selling
across the sectors, which will increase the volatility even
further. Now, there is a possibility that there is a leading
diagonal formation in wave A of wave Z down. So, if that
is the case, Nifty may retrace few points in wave B. The
break of 4851 will rule out this alternative and if 4844 is
taken off, the pullback will extend. So, things continue to
remain tricky, but looking at the volumes, breadth and
momentum, the bears currently have an upper hand.


Nifty on the hourly chart is trading below its 20 hourly
moving average (HMA) at 4943 and 40HMA at 4992, which
are now its resistances in the short run. The hourly
momentum indicator KST has turned into buy mode and is
now trading below the zero reference line.
Nifty on the daily chart is trading below its 20DMA at 5134
and 40 daily exponential moving average (DEMA) at 5142,
which are now its resistances in the short run. The
momentum indicator (KST) has given a negative crossover
and trading below the zero line. The market breadth was
negative with 333 advances and 1,011 declines on NSE
and 772 advances and 2,025 declines on BSE.
Nifty and Sensex shed 17 and 74 points respectively. Of
the Sensex components National Thermal Power
Corporation (down 4.20%) and Grasim Industries (down
2.92%) were at the bottom of the 30-bourse list whereas
ITC (up 3.41%) and Maruti Suzuki India (up 2.62%) topped
the list.

 

[praveen taneja]

Early this morning God gave me 3 baskets of fruits -

LOVE + HAPPINESS + PEACE OF MIND and told me 2

Share them with PPL Dear 2 me. I'm sharing all with U...

Good Morning!Have a nice and blessed sunday

 

[praveen taneja]

Avery Happy Peaceful and Blessed Ekadashi To all Of you I Pray To God
Sukhi Base Sansar Sab Dukhiya Rahe na koye
Ye abhilasha Is Man Ki jaldi Puram hoye

 

[praveen taneja]

Nf fut
buy 5005.25 tgt 5015.35 / 5031.70 sl 4988.90
sell 4966.30 tgt 4956.20 / 4939.85 sl 4982.65

 

[praveen taneja]

NIFTY STRUGULLING TO MOVE ABOVE RESISTANCE 5000 , FOR MORE POWER ONLY ABOVE 5018!!! SUPPORT AT 4980 & TODAYS LOW....
On open took news based trade of RIL 1000 call june at 52.75 now 62 HOD 67 any view sl is 58 on seller side God is gr8888888888

 

[praveen taneja]

This week 4850 or 5200 ??????