Wednesday, September 15, 2010

Themes for the Future

As the Nifty moves up, non-stop, investors and traders should be looking for themes that may outperform.

First, we must understand that the market cannot go up, day after day. It can go up for many days, but not indefinitely. My point is: if you are looking to intiate a trade or an investment, you could wait out this momentum move. There will be a pause, a dip. That's when you enter. But where?

PSU Banks continue to remain a viable trading idea.

A second theme is capital goods. I am looking at companies that are, well, service providers rather than large engineering outfits. There is a long list. There is a difference between this sector and the PSU banks. When I started talking about PSU banks, they were extremely undervalued. They still are, but the gap is narrowing down. Most capital goods providers are not undervalued. Also, they are already in the limelight. Some stocks that I am considering are: Alsthom Projects (APIL), Cummins & Thermax. I have positions in APIL, but for the rest I will wait for a correction. No hurry.

2 comments:

rocky said...

hi,

The only Theme that seems to be working right now is Join the Indice rally, but no one has till now i guess, else the market would have started coming down, the markets i feel has been :"Hijacked" (by FIIs ofcourse), i dont know what factors are going to free it.

In Thought Process said...

At what price you think cummins will be attractive for long term investment?