i Develop Stocks Advisory

Sentiments Vs reality Certainly volatility is not yet over. Bear have every reason to smile and cheer. They have succeeded in the game in the shorter run. Congratulations. They are also preparing to prove that India growth story was a bubble and it could vanish the way US market crashed. They believe that market will not hold even at 14000 and may test lower levels which are prompting them to sell left right centre. Yes, now they know that the depth in F & O is lost so they are hammering delivery stocks. The best part of the game is most of the broking heads as well as traders have understood the bear phase. They love to go short every day and earn. I heartily congratulate to those sharp traders. Rahul Gandhi has played his cards well by making a statement that waiver should vary for dry area and irrigated area which is good move from election perspective. The Hon’ble F M too had taken conscious bite of inflation keeping elections in mind. Post elections the breaks on interest rates will be off and inflation will be allowed to rise to moderate levels of 8 to 9% also in order to stimulate growth. If China is an evidence of 10% plus inflation India too will be following the suit. If this can be understood by our ECONOMIST then the world’s best in the business too also understand the same. Even in today’s circumstances the high interest rates are unsustainable and reduction may come any time. In long run interest will be back to 5% and growth journey will start. Therefore the fear of end of INDIA growth story is over reaction. We are convinced that the long term story is intact and with smaller risk of inflation the GDP will sustain at 9 to 10%. At this point in time I can suggest all those who are not over leveraged may just relax and take break and leave the market to bears. Let us see their strength too and how far they succeed. Bulls too are watching. Bulls also know…. The answers to market will come from Govt alone. May be Finance Minister falls back on disinvestment to take the farmer debt waiver out of Budget. Since now disinvesment could be for a cause wanted by LEFT they may not have headroom to react.This is my sense of understanding. These traders having understood the market and the bear phase have started trimming their delivery positions even at losses. This is really good and I am happy they are getting relieved from the laborious investments. Lot of broking houses which are saddled with huge trading losses in proprietary trades as well as losses arised from margin funding too pared their positions in cash stocks. They have been selling hugely even in order to create some cash for survival. The best part of it is that they all have got exit from the painful holding. They will shy to reenter the market for another 6 to 12 months. Lot of market players are aware how the bear cartel is working and which are players involved in it though they may remain tight lipped. CMI has affirmed growth rate of 11% for even 09 which means there was some aberration in the IIP nos. It is interesting to read an editorial in Business Standard which loudly speaks the fear of the analysts. S & P has gone on record today with comments that the sub prime write-down is coming to end shortly. Japan Govt is duty bound to act judiciously as YEN has broken 12 years 102 barrier. Yen carry trades disappeared whereas currency hedge is coming to knot. All these factors do suggest that the worst has been fully factored in the prices. If you devote your life to seeking revenge, first dig two graves. Every day you can’t be winner in speculation. Every dog has its day. Day before yesterday we had lost entire 500 points due to the reaction to global clues and IIP nos. Yesterday the crash of 850 points was assigned to Drakes a US Hedge Fund going to burst. It had exposure on JAPAN and Hong Kong hence Nikkie and Hang Seng reacted but why India…? Bears living in free economy have full right to go naked short and rightly says so why are Bulls hiding…? Bulls too have opportunity to take head on. How and when are the unanswered questions?