Friday, October 1, 2010

Just a Little bit More

A stunning 100 point rally in the Nifty saw the benchmark index close at 6175. The all time highs are at 6357.10.  So, all we need is just a little bit more.

Meanwhile, the U.S. markets are continuing to remain in a range - no 2% rally there! We must have become decoupled, such that the Nifty can sustain a trailing four quarter PE of 25.54 (this is still lower than the PE of 28.29 recorded on January 8, 2008 which was the day on which the high of 6357.10 was recorded.). What this means is that a bubble that is building up has some more room to go before it actually bursts. But the day of reckoning is coming. Why? Well, a well known indicator has given a signal today. I went for a haircut, and, the technician in the saloon said that he is going to invest Rs 1500 per month in shares and he is not worried about ups and downs in the market. He will just keep on putting the money. It seems that the stock market rally is slowly influencing the retail.

Bloomberg-Utv has an interesting website: http://www.bloombergutv.com/ where trading calls given by analysts on different TV channels are recorded. This is interesting since you get a number of trading ideas from many TV channels at one place. Have a look.

4 comments:

rocky said...

Hello Sir,
By saying "a well known indicator" and following it by retail interest information shall i infer it as the "indicator"??

This rally sure looks a very greedy one wiping out all the short money till now literally. Replacement of 3 scrips in Nifty and Banning of 300 odd FIIs from trading by SEBI, can we consider these as indicator of things to come??..food for thought.

pucchhu said...

i definitely agree with your barber's indicator. At the time of reliance power, allmost all my friends,who never invested in equity earlier opened their demat accounts for the ipo,afterwards jokingly we use to call it shoe shiner's curse,
I would also add that, allmost all those demat accounts, have not done eny trading or further investment so far.

rajv malik said...

sukhani ji,

for quite some time you and several others have been saying is that this is a bubble like situation and it will burst. but despite that the market has gone up by several hundred points and all those who took you and some other analysts very seriously missed the bus.

so now if this saloon fellow says that he is going to deposit this x amount every month, is he not influenced by the analysts, maybe including yourself who recommend the general investor to choose the sip route. would you not say that this is a wise decision he is going to take.

now there is a talk of 7500 on the one hand and on the other hand you have been saying that nifty ought to have a decent dip or correction. for laypersons and investors the situation is quite complex and confusing.

mgv said...

Well said sir..that is the "Greater fool theory"