i Develop Stocks Advisory

Changing Dynamics... …. Volatility continued and SELL at every rise has become the buzzword. Every 99 out of 100 traders and brokers are saying this. FII are doing patience game and waiting to enter the market again but their buying will in piecemeal and in small lots of nothing over 5% of investible funds simply because nobody knows the bottom. This is again happened because the 200 DMA is broken which was at 4910. This was the crucial level as far as markets were concerned and few funds especially Hedge funds which have to restrict their losses to 10 to 20% started booking losses. Some stocks which are in profits too are getting hammered because of book entries. For retail investors too they have started selling their age old holding to book losses or profits as the case may be in order to deal with Income tax issues. With tons of losses nobody would like to pay part of capital as income taxes. The scene of capital market changes overnight…? REL Power the issue which got over subscribed by 75 times yet opened at discount of 20% which means the stock which was looking extremely rosy pre IPO became vulnerable to even maintain its IPO price. If this is the status of ADAG gr co where retail co lose 45% ( 20% absolute and 25% interest cost) then what matters if you have lost 30 to 40% in secondary market in rock solid companies like NTPC, IDBI, IFCI, RIL, REL and on….? If REL Power has to correct another 30% from hereon or for that matters RIL has to correct 30% then everything will also correct with no exception. Technical experts from renowned firms are saying we have entered into a BEAR market whereas few good experts betting on 4400 once again which is still away by 10%. Hardcore bears are betting on 20% correction from the current levels. All said and done the crisis is of money and once the hands are changing things will improve though time is really an essence. Yesterday O I went down to Rs 63000 crs which is just above the 31st Jan level the only change being that last time weak hands were stranded looking for exit and this time this is not the case. It is not a case where strong hands pull up market straight away. During consolidation too they will watch the selling pressure. They will become aggressive buyer’s only under one circumstance where the selling stops once for all then they will raise the bet size and exposure. It is really not important whether we are bullish or bearish at the given point in time as nobody is going to bide by the advice. One thing is for sure the crash of May 06 started on 14th May and recovered fully on 14th Aug i e 3 months. This time only one month has happened so far from the peak crash and therefore it could take another 2 months to remove the complete pain. The only difference is this time is Budget in between. Any bad and harsh budget could mean further sell off coupled with overseas markets. Budget is set to be populist as far as people at large is concerned but market does not look at these measures. Whether Budget continues the reforms process and brings some positive surprises is required to be seen. How the Hon’ble F M deal with the fiscal deficit is also required to be seen in the light of the fact that this could be the last Budget before elections. IDevelop as a group has increased exposure in B gr stocks wherever feasible but all the investments are being made with a time frame of 1 to 3 years where we are confident to get a return over 200% as far as stock specific is concerned. This message too may not help much at this given point in time due to lack of faith as far as majority of you are concerned. However this will convey a right message to all those who have trusted IDevelop team over 5 years and still would like to a loyal patronage. We will not generate sell calls and hence those who want to be sell side may take their own call. So often we rob tomorrow's memories by today's economies.