What's With The Market?

rookie_gau · #1 28th November 2007, 05:28 PM

I do not understand what has been going on in the markets since last week.
There is no problem from the government, the world markets are average, oil has settled between 93-97$.
What is pulling down the markets slowly? Are we seeing the effects of doing away with P-notes?

gouravadv · #2 28th November 2007, 06:13 PM

Is the current trend indicating towards a short consolidation & correction or is it the bears who are taking over the market.

Because Markets are not showing any upward movement like in October. And year-end is also approaching for most FIIs. They can book their profits too.

Any comments.

Alchemist · #3 28th November 2007, 06:16 PM

Quote:

Originally Posted by rookie_gau

What is pulling down the markets slowly? Are we seeing the effects of doing away with P-notes?

It may be one of the reason.

The thing is once these P-notes restrictions were enforced, the market's momentum was killed.

When markets can't go up, they fall under their own weight.

Since last many days, the bigger stocks have stopped going up. Only mid-caps were performing and now even those are losing momentum.

Add to that the worsening situation in US.

For the Senex to go over 20000 again, lot of strong buying will be needed.

As long as the Sensex stays above its 50 day EMA, we can hope that sooner or later buying will emerge.

However, if this critical support breaks, then we may take many weeks to recover.

The 50 day EMA is at 18400 right now. (Green ribbon).

Not all world markets are stable.

The Shanghai Composite is already down 20% from its all time high.

Shanghai Composite Chart:

US financial stocks are selling off too.... which is very worrying. Imagine ICICI Bank or HDFC Bank selling off like Citigroup has been in last few sessions.

Citigroup Chart:

gouravadv · #4 28th November 2007, 06:49 PM

Really a useful post. Thanks Alchemist Ji.

Good analysis.

rookie_gau · #5 28th November 2007, 07:12 PM

So whats the advice for small players like us? Hold or Exit?
I have already foregone 200 Rs/share profit on Mundra(although its altogether a different issue!!

)

Alchemist · #6 28th November 2007, 07:17 PM

Quote:

Originally Posted by rookie_gau

So whats the advice for small players like us? Hold or Exit?
I have already foregone 200 Rs/share profit on Mundra(although its altogether a different issue!!

)

Hold for an investor.

The 50 day EMA is a good support and thus even for a trader, I would not recommend a sell unless the 50 day EMA is violated.

Indian markets will not turn bearish if US economy goes into a recession, but the returns will get subdued. My worst case scenario is 16500 for the Sensex.

(I thought you sold half of your Mundra Shares.)

rookie_gau · #7 29th November 2007, 08:00 AM

Of course, I withdrew my capital!! I was talking about the other half!
But Todays HT Business tells of 15 companies getting cleared for F & O, Mundra is not among them. I guess it will definitely be some time before we see any +ve news on this.

Mundra @ 1000 without any SEZ is, as you have said, costly. It further dropped to 880 yesterday.