Focus...............FED Effact

When everything was good then why did market lost almost all grounds…..? We had yesterday given a buy call on Nifty and all stocks such as RIL, SBI, IDBI Bombay Dyeing and IFCI all were there in huge profits. Yet we will not claim the credit as these calls were optional.

We will stick with our focus of 14880 on closing basis and 14100 as the worst case and above 16000 if every thing goes well. Today and tomorrow FED is meeting which will be used for creating more volatility. In fact, I feel really nervous when GUJU and MARU traders talk of FED effect on Indian markets. If analysts discuss then I can understand but when trader I really wonder how can they step into the shoes of analysts…?

We did not ask investors to carry positions except in cash stocks today neither we have reduced any calls . IDBI from a low of Rs 105 flared to Rs 113 crossing our call initiating price simply because IFCI is rising. In fact, the fair price if IDBI is above Rs 124 only but since the stock was in overbought condition in the last vallan it failed to move up. Now there will be a fair run on this stock. In fact, next 4 quarters there could be stunning add back in the bottom-line due to written off NPA settlement. Secondly so far I had not discussed the valuation of its subsidiary of life insurance. If SBI subsidiary is valued at 2 bn USD then IDBI’s could not less than 1 bn USD which is a cool Rs 67 per share. It has asset management co too and Govt has gone on record the allow FII to hold stake in holding co formed for this purpose. This one point programme has brought SBI from Rs 1400 to Rs 1700 then believe it or not again this point will take IDBI to Rs 250 plus……This is the beginning of value unlocking let it cross Rs 250 I will discuss some thing more which will then take IDBI to Rs 600 in next 18 months. If you believe that I am one of the architects of SBI rising to this level and after 18 months I will take again credit from you for IDBI. We hold positions in both SBI and IDBI.

Coming back to the issue of why our S C team did not give buy call today for tomorrow….? Are we bearish for tomorrow….no way but at the same time not even bullish till Thursday? After that there is no much looking back and you will seeing the markets in good nick like DADA at its best….

The reason that sub prime is still a concern though yesterday’s rise was Govt assurance to resolve the issue…There are 370 cos considering their results on 9th Aug for Q1 out of which lot of cos are covered by sub prime. The same is also after the event of FED rate issue. Chances are that FED will keep it untouched because if it reduces at this point in time then it will impact USD and rupee will gain smartly post Rs 40. Now having said this, if analysts find that no major impact is seen on Q1 nos out of the most affected issue of sub prime which is nothing less than bird flue….then re rating is on cards and Dow will recover all its lost grounds and will enter in a new orbit only on short covering.

The same goes well with Indian stocks….As reported earlier almost all the operators are running books full in their respective stocks whereas retail is deprived of ownership in stocks and punters are fully connivanced that market is already topped out and therefore only in mood of selling. They will realize their trapping only after 4600 and therefore till that time supply should not be an issue and volatility should persist.

"It is an ironic habit of human beings to run faster when we have lost our way."