i Develop Stocks Advisory

Precedent always not required Yes, finally global market stabilized irrespective of all negative news flows. Dow from low of 11700 has climbed back to 12600 and heading for 16000 which no body will believe at this juncture. We have track record of predicting the market behaviors though we are not the market controllers. We suggested to short GOLD and long of Nifty with hedge strategy and both side has given 15% effect so far. Another 15% expected in next 30 to 60 days. US market is definitely not standing on one pillar of housing and the write off which has reached 225 bn USD may see another 50 odd bn USD at max which means the dirt is coming to an end. What next…..? The earning season is starting from April 14 in US and I certainly believe that lot of positive surprises are in the store. Coming back to Indian scenario it is for sure that retail is completely out from the fray and unlikely to contribute to the market depth. If we talk about upcountry volume hardly 2% business is coming from these regions to broking houses. Branch expansions are coming to halt and lay off started. One foreign broking house has also cancelled ESOP. Another leading broker has faced major staff exodus from PMS. All dirt is getting us to the exact bottom. Liquidity which has been a major concern is slowly getting resolved. A leading gr has already pumped in Rs 7000 crs in treasury operations and all set to infuse Rs 18000 crs more in next 30 days. This liquidity is helping strike major deals in the market which is absorbing value stocks at throw away prices. Promoters of big companies getting some relief whereas the buyer is getting value buy. I am sure this Rs 7000 crs will earn at least Rs 7000 crs in next 1 year for the buyer. Every day some or the other good stock is going in strong hands through block deals which is nothing but an exercise of sucking liquidity. This is called consolidation process. No retail, no HNI, only sellers are either FII, MF or distress promoters sells (being used their max permissible limits to support their own stock). Once the supply side dries market will start rising very fast. I personally believe this month Nifty will touch 5400 dispensing the most dashing hopes of bears to see market testing 4400 again. Though market is waiting for CRR rate hike there is chances that Govt will allow rupee to rise faster with free imports to see the inflation in check. This should match with the date of 14 th April 2008 where I believe inflation will be back below 6% for sure. If this comes back to 5.5% I think Govt may not increase the CRR rate. Now coming to industry Cement is doing fabulous whereas Steel is unstoppable. The artificial curbs will not work as the global prices of H R are rising. Buy small steel co’s at any cost which will give tremendous returns. We have not changed our targets of market. Our vision is unchanged. Our stock picking ability is intact. We had picked up ITC as stock of the year. With market correction ITC too corrected but back to our call initiating price. We expect ITC will become stock of 2008. Strong ones do not require precedents whereas weaker ones always look for precedents.