i Develop Stocks Advisory

Bottomed out.....
I was waiting for this moment along with my team which has now stepped out with zeal and confidence to imitate hot buy calls.

It is not much depth left in the O I positions and hence the chances of market going down further are completely axed. In my opinion 4910 will be the all time bottom for now. Market will test new top first.

The issue under consideration was the CRR rate cut expectation. In fact, this hope only belied the stock market to 300 points plus and actual disappointment made market to correct by 500 points. This was inevitable because traders off late are not allowed to buy come what may but they are allowed to short. In short term scene they are getting few thousands also in such trades which will be wiped off soon and they will lose their pants once again in selling short.

The key driver is the QIP refund. In fact, stop gap arrangements are being made to buy out shares in anticipation by corporate houses to some extent which is being reflected in improved prices. Actual impact will be seen when the refund is granted. By any stretch of imagination 40 bn USD is too big a figure for Indian market especially when the O I is dwindled to as low as Rs 82000 crs including Rs 18000 crs in FEB.

From 1^st FEB 2 things will help market restore confidence one that the refund and 2 that short selling by FII. This will work as a good balancer. In fact, the freezing limits of 5% in B gr too should be removed and short selling should be allowed in large cap stocks which will help stock prices as per market discovery formula which is applicable to A gr stocks. Why should there be a step motherly treatment to B gr stocks….? If buyers has opportunity to buy IFCI at 67% discount in just 2 days why should a B gr buyer should hold the price at 10% lower…..? This is demoralizing and creating more manipulation in the stock prices.

In fact, the root of the problems lies here. Say. market collapsed A gr fell by 50% brokers got the margin call from the exchange which in turn asking investors to deposit DD within few hours. By that time all the B gr stocks are at lower cct and this cct would not open till next 15 days and then how can a investors sell their B gr shares which are generally accumulated through their profits out of A gr trading.

You are squeezed. Even if somebody wants to sell B gr share at 50% lower than the cmp you can’t sell because of 5% limit. The need of hour is that even such limits should be replaced by new limits on the very same day to provide exit to investors which could have really saved the system from collapsing.

In this sense I would still think that Indian capital market has to go very long way before we can say it is fully matured market. The claims made by the system developers are still sketchy.

Any way, market has bottomed out for sure. I would suggest all those who can trust us may go out and buy stocks of your choice. If you can’t spare funds then at least switch your portfolio like a smart fund manager.

Freedom is not an ideal, it is not even a protection, if it means nothing more than the freedom to stagnate.