i Develop Stocks Advisory

Coupled...How Long..? DIRTY RUMOURS OF THE BEARS The pain of fall in stock prices continues in the background of global clues. Market is now just 600 points away from its all time low in the recent crash ( 15332 ) which could be broken any time early next week as the positions closures have started with year end considerations. The bear camp in full swing has started repeating its dirty tricks on the public domains saying that J P Hydro will touch Rs 22, TTML Rs 10 etc. The same guys used to say three years back that ONGC will become Rs 10, BPCL Rs 10 and so on which never happened. It should be clearly understood that all stocks where forward going events are factored in the stock price will always get hammered in bear attacks because their earnings makes these stocks always expensive on records. Century Textile’s growth story was never a growth story of textiles and cement valuation in 2006 which got hammered from Rs 800 to Rs 165 because the realty prices were factored in the Bull Run at Rs 800 and stock got corrected. Later on the same stock crossed previous high of Rs 800 also in next Bull Run . Reliance Capital, Escorts, SBI, RIL all are the classical examples. Bull market gives forward going valuations whereas bear market sentiments value the stocks below actual peer valuations. MTNL has come to a price at Sensex 5000 level and below its yield valuations and stock is finding lower levels. IFCI, IDBI and Bombay Dying are classical examples in the current scenario. This could be also a part of the market makers’ strategy to suppress the prices of stocks with great value with thin volumes so that as and when they want to turn the market they should be able to pick up sizable chuck in these stocks at lowest rates. This will ensure that in next bull market only they are going to offload these stocks at the best prices. ADAG gr announced bonus to save the sinking R Power stock and Anil Ambani stated that somebody had hammered the stock on listing day which requires investigation. Now what can he do…? Will he change the bonus ratio from 3:5 to 1:1 to save the R Power from further being hammered …? He has announced buyback at Rs 1600 in REL and stock sinked to Rs 1300 as if the gr is searching for bottom for starting buyback action…? JP Associate’s management tried to save his stock at Rs 260 level and 270 levels by making huge buying through close circles yet the stock has fallen further by 25% …? MARRY ILLIQUID STOCKS LIKE…………….. These things happen because intermediaries giving unauthenticated call on market. It could be great gesture if they preach in practice while advocating the same. At the same times it gives a feel that long term investors should invest in stocks which are really illiquid and are not salable in such markets but have great value. The rational is that you buy and forget for a zero tax regime e g the stocks like Sandur Manganese, Walchandnagar, NMDC, MMTC, Reliance Infra, JSW Holdings, Engilsh Clay which are totally illiquid stocks and cannot provide liquidity when you want but can give disproportionate returns over a period of time. Once you buy, close the book as if you do not have the stock and think to sell only when it rises to your expected price. This can make you avoid seeing the pain every day when market falls like pack of cards because these stocks are circuit stocks. Either they hit 20 circuits in row on upside or on downside or about these stocks even no enquiries are being made by exchanges. Only a strong operator can move such stocks in this fashion and that too in Z group. This will give you additional comfort of being stuck in operator driven stocks. The only catch is that your entry has to be very close to operator’s entry no matter when you exit from the stock. BEST STRATEGY IS TO CHANGE TRADES TO DELIVERY Even in today’s context if you have managed to survive till Nifty 4700 then be prepared to see Nifty 4400 which is hardly a fall of 2 days as now 200 points nifty fall has become order of the day. The best strategy for derivative traders is still to change their trades to delivery by either cutting some part of the positions or infusing cash if possible. It is sooner the better to get out of the F & O pain and bright sun is going to shine soon. You are just few weeks away from seeing very bright sunshine. When you are on the ground you can’t really swim and when you are in water you cannot walk. People wish to learn to swim and at the same time to keep one foot on the ground.