This is what happened next!

Now question is where we are?

In 1992 correction?

Or

In 2002 correction triangle?

If we follow 8 year cycle we should take 1992 Triangle as the one which should be used as example for rise of current one!

If I am not wrong we should see Sensex conquer 20000 again in 1.5 years from now!

Hi Friends,

Is there any possibility of sensex going below 10,000 in this year? I sold 40% of stock last month. When can I buy again? Shall I hold 60% of the remaining stock or should I sell it this month?

Suggestions please. Thank u.
Reg
ezhil

10000 seems very very difficult now.

If you already have booked partial profits, I suggest you hold the rest of your stocks.

The current upmove has been very sharp.

People should just wait now. There has to be a correction sooner or later.

Once the market starts to fall, keep buying little at every fall.

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Equitymaster is predicting 21,000 by July 2010. When it rains, it pours

vasa ,
is that a research report [paid] ..
if not do provide the link

I can't find it now. It isn't paid but you have to give them your e-mail address .

here is the link:

http://www.equitymaster.com/5minwrap...ayal-may09.pdf

I don't mind the Sensex going up....but the key question is will earnings too show a similar jump?

If prices are just going to move and earnings are going to lag, at 21000, we will again be at the same valuations that we were in January 2008.

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Alchemist, I posted the P/E for various Nifty indices here.

Well BUll run comes later for now this is what I see



A clear strong divergence just like Jan 2008!

The Sensex has completed its 61.8% retracement.

The bear market lasted from 21206 to 7697.

The 61.8% retracement works out to be around 16045.

Hence, 16000 is proving to be a resistance.

A correction from these levels shouldn't be surprising.

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My gut feel on the sensex (Without and significant analysis what so ever )

What causes uneasiness in my gut:
1. US recovery is fragile. I think there are more skeletons to come before we see the end of trouble (For economy to recover, consumers must spend. But average house hold credit card debt is in thousands of dollars. How real will the new spending be considering the accumulated debt?)
2. Chinese growth number seem to good to be true. I read somewhere that the chinese have resorted to "creative accounting practices" for inflating the figures (Search for Jim Jubak's views on google)
3. Effect of bad monsoons on Indian economy will be considerable. Growth will slow down and PE ratios have to adjust downwards.

- Sudhanshu

Alchemist & man4urheart

Anyone please tell me your views on sensex
I am sitting with 80% cash

Has the bull run started?

Thanks in advance

I am in 90% cash!

Well I am currently watching for 17000 in sensex, as mentioned by ICICI Weekly analysis!

Diveregnce is there, so every rise is to be look for suspicion.

I am ok to miss on this leg of rally!

Oh that means someone is with me too..

Well, I am also in the same boat as man4@. I thought I did the mistake of sitting on cash now and missing this rally.

Anyway lets see how far it will go. But I am not comfortable entering at these level if it goes to 17000 even.

Sensex and Nifty completed their 61.8% retracements yesterday.

61.8% retracement of entire 2008 bear market.

21207 - 7697 = 13510.

61.8% of 13510 = 8349.

8349 + 7697 = 16046.

Yesterday's high was 16036.

For Nifty the 61.8% level is 4789 and yesterday's high was 4790.

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SO where are we headed next? would you recommend entering into long positions?

this is a liquidity-driven rally.

there is lot of money around and there is momentum.

I can't say for how long this momentum will last.

valuations looks a bit expensive to me...especially for the large-caps.

markets are discounting strong earnings growth from FY 2011 onwards.

you can trade/invest at these levels too, but make sure you understand the risks involved.

if you are investing in a stock, there should be good reasons for investing at these levels.

if you are trading, trade with an exit strategy in mind.

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I am almost 100% cash! - except for a wee bit of Natural Gas (UNG) which is taking a walloping......down more than 85% from its peak.....I am down around 15% rite now.

As a medium to long term trade, I am LONG in Infosys, Bharti and Nifty, and correspondingly SHORT in HCLTECH. You can say it is some sort of a pair trade.

Today I sold 1 Lot of Infosys (200 shares), so I am now beginning to go net SHORT....I plan to buy back Infosys if it moves to newer highs or S&P 500 breaks above 1045 and Nasdaq tops over 2045.

Why am I Infosys LONG and HCLTECH SHORT ?

Below 76.695, the USD index will record a LONG TERM BUY SIGNAL on the TD quarterly chart. Infosys hedges the least and HCLTECH hedges the most.....so it will be a pure arbitrage and low-beta vs high-beta play.

During market LOWs, I was LONG on HCL TECH and SHORT on Infosys.....that trade worked out like a charm......now I am hoping that the reverse trade would play according to my plans as well.

I dunno about 17000 Sensex target from ICICI weekly analysis..... Here is what I read from ICICI Vivek Patil weekly analysis

In short, it is my understanding that Vivek Patil expects the Sensex to top out somewhere between 16000 and 16700 before the F&O expiry next week!!!

I am also ok to miss out on this leg of the rally. I think the risk is way too high at this point.

I am using 17000 as a filter for entry, as it is round number!

Yes I want to wait and confirm the setup rather than a hero to Enter now!

I think this is a personal decision....

Those who got badly burned the last time around will have every reason to stay away and hope to reenter after the much-predicted but still-to-materialise correction.

Those who took a chance and bought at 8,000 instead of waiting for 6,000 can afford to even ride through a couple of thousand points correction.

People who are entering the markets for the first time may want to purchase tiny amounts rather than go all out since stock prices seem to factor in great results in forthcoming quarters.

Anyone please tell me your views on sensex. Thanks in advance

A interesting inverse chart of sensex....What do you think would be direction of breakout.

This is similar to what happened in IT index in march!



This is similar to what happened with IT index in march!

this is new.. to me
any reason why you are looking at an inverted chart?

Where Sensex is heading now?

It seems to be pretty much range bound between 15500 to 17900 levels.

Sensex reached 17000 in October 2009 and has made many failed to break 18000 levels and on the down side it could not go beyond 15500.

So where it will head now because it has been range bound pretty much for last 9 months.

What are technicals suggesting?

Hello Friends and Gurus



I am completely a beginner, should I enter this bull?

Dear beginner,

You need to ponder how you deduced that it's a "bull" and not a "bear".

Start with small amount.

- Lose some, you will know what's your capacity.
- Make some, put more, lose more, put huge, make huge or lose huge and say bye bye.

In short don't judge, play within your limit of loss appetite.

The Sensex has rallied from 7697 to 18048.

23.6% retracement of this rally is 15605.

As long as the Sensex is above 15500, we can call it a consolidation phase.

If 15500 breaks, the technical structure of the market will weaken a bit.

Next crucial supports will be:

38.2% retracement - 14094.
50% retracement - 12873.

---------------------------------------

As an investor, my strategy would be to buy partially at each of these levels;

40% at 15605.
40% at 14094.
20% at 12873.

or

in case the market doesn't break 15500, buy little every month.

---------------------------------------

I have suggested completing 80% of buying at 14100 level.

The reason is that I don't see much probability of the Sensex going below 14000.

Currently valuations are not cheap.

In fact, many stocks are still richly valued.

Investing a lot of money at current levels is not advisable.

It is better to wait for either a price correction or a time correction.

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On daily chart for Sensex, 5,9 EMA is sell signal:



Same is the case on daily chart for Nifty:



I am feeling that the market is highly exhausted and should start coming down.

At the close of business yesterday (6th Oct 2010), the SENSEX was valued at a P/E ratio of 24.32.

The last time the P/E ratio exceeded 24 (monthly basis: month-end) was in the months: Oct-07 to Jan-08

Before that the same condition prevailed in Feb-00 and Apr-00 to Sep-00

Time to be careful.

Data source: BSE website.

Sensex is trading at all time high in terms of PE but some of the stocks still trade at low PE valuations like Shiv Vani oil, JBF Industries etc.

Is it safe to bet in those kind of stocks now?

Does those kind of stock limit the downside risk?

Irrespective of the overall market, at any point of time we will have stocks that are under-valued.

If you find such stocks that you are confident of, you can invest. However you should be mindful of the fact that when markets correct, your stock may also be dragged down with it.

I suggest buying in SIP way. Average on dips.

Disclaimer: Personally I am very suspicious of the current market and do not hold any stocks myself.

What will change ? Will the earnings catch up or the valuations go down ?

Does inflation affect PE ?

For the last two periods indicated, the market corrected significantly. What will happen this time? don't know.

Some stocks always trade at E ratio that is much lower compared to the overall market.

There may be many reasons for it:

- Cyclical nature of the business.
- Poor management quality.
- Not much of free cash flows.

etc.

Other reasons why stocks can trade at a low PE ratio:

- One time gains in the past earnings.
- Gloomy future outlook (future earnings expected to be lower than past earnings).

etc.

Just because a stock is trading at a low PE, it doesn't mean that stock is a good investment.

Many times, a stock trading at a PE of 15 may be a better investment than a stock trading at a PE of 5.

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In the words of Mr Man4urheart - ALL in the charts.

I am out (unless hear in this forum a compelling reasons to stay put). I agree markets can go crazy to any level.

Have recovered all 2006 and 2008 losses with interest Exiting from all recent IPO clutter. For me no more new long positions. I now prefer to wait and watch at the sidelines.

Can you summarize / put down your conclusions from charts? I don't see any thing alarming in these charts. I rarely use PE / PB ratios so may be you see something I don't.

and can you re-size the images please. They are too large.

I have re-sized the charts.

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