Dear Friends,
What MAY happen in MAY, MAY not be known to anybody. But let us recollect what has happened in the MAY in 2004 and 2006.
MAY2004
Market expected BJP to come back to power though there was some doubt about the no. of seats they MAY win and the kind of support they MAY have to seek from other parties. But it was disaster for them and Congress formed the Govt with the support of the Left parties. And even before assuming charge some left leaders made a statement that the DISINVESTMENT ministry will be scapped. What followed was MAYhem in Indian stock market. For the 1st time since the Exchange Authorities fixed circuit filters and lower and upper limits, Index fell 10% and trading stopped for 1 hour. and on reopening fell another 15% to stop again as per the exchange rules. If it had not opened higher from there within the next 30 mnts, trading would have been halted for the day. But some bottom fishing(even though the smell in the street was blood) helped the market to recover a bit but still closed with significant losses.
It is a different matter that the Govt has made significant disinvestments in the last 3 yrs and the Left Parties are strongly & dutyfully opposing to that. It is a classic example of the famous saying that " THEY DONT SAY SOMETHING TODAY AND ANOTHER THING TOMORROW". They are consistantly saying the same thing everyday for the past 3 yrs like Glenn Mcgrath Bowled consistantly on the offstump for 10 yrs.
MAY 2006
Even from the end of April 2006 the market was showing huge volatality with intraday swings of even 500-600 points(sensex) There were many classical signals to indicate market topping out but as usual (at the top) the confidence was also at the peak as Mutual Fund announcing new schemes everyday, every IPO listing price giving 100% & more return over the allotment price and every analyst talking about long term growth strory of India. The comments & observations of some of investors were so catchy that I started recording them in my dairy along with my own observations. I always do this to see how my reading is & correct me when I am wrong and pat myself when I am right. Here are some such observations reproduced from my 2006 dairy.
24/04/2006 - Monday - Market fell 147 Pts
25/04/2006 - Tuesday- Market fell 275 Pts
26/04/2006 - W' Day - Market recovered 290 Pts
27/04/2006 - Thrusday-Market fell 115 Pts - late in the evening SEBI order came on IPO scam. Very Harsh on 12 DPs and a few brokers like Karvy & India Bulls - market likely to crash 500 Pts - 10.20pm on seeing CNBC news
28/04/2006 - Sensex fell down 490 Pts in the 1st 20 minutes and then recovered steadyly to close 16pts +. Remarkable recovery as Indiabulls got a reprive from SEBI.
04/05/2006 - A client - Acoording to my Bombay sources bull market is just beginning and has a long way to go
05/05/2006 - A Stock Broker (with CA Qualification and 20 yrs exp) - Century Textiles will touch Rs.1000/- reason - 3 divisions to demerge resulting in Value Unlocking - On that day Cent.Tex was 580. from that in 1yr the stock touched a low of 258 in June 2006 and a high of 780 in january 2007 and is now at 609/- giving an effective retirn of 5% p.a if you had bought & held on till today.
06/05/2006 - A Client - He recently visited Singapore and met a few Investment advisors . According to them India is an Emerging market & so invest in Blueset of Blu Chips & hold for 5 yrs for very good return.
07/05/2006 - This is very intresting - comments from Investment analyst/stock broker
(a) Devanshu Datta - Sensex can tough 18000 to 19000
(b) Hemant Shah of Prabhudas Leeladhar - Bull phase will continue till 2008 - sensex to touch 20000
08/05/2006
My observation - Metal prices going up too sharply - bubble to brust anytime
09/05/2006
My Observation - Market going up crazyly. Nobody wants to pull out money inspite of cautions.
15/05/2006 - Market fell 500 Pts. Again termed by FM(not radio FM yaar, this is Finance Minister) as good & healthly correction - dont know when he became a technical analyst
Nobody is accepting the fact that FIIs are selling, interest rates are to go up and metel prices in bubble zone
16/05/2006 - sensex fell 500 pts intraday & recovered to close 50pts +. Again a deliberate & deperate attempt to hold & sell.
17/05/2006 - 2nd ANNIVERSARY of Black Monday(17/05/02004) - You know in India we celeberate birthday anniversary for dead people - Why not for stock market which is a living ligend - Market goes up 335 pts to mark that celeberation & Udhayan Mukharjee & Senthil Sengalvarayan's faces glow like sunflower greeting the SUN or a Peacock welcoming Rain bearing clouds.
18/05/2006 - Market crashed 890 pts due to a stupid CBDT(Central Board of Direct Taxes) issused to the press at 10pm last night stating that FIIs should be considered as traders and should be taxed at 41% instead of current 10% . And surprisingly no clarrification from anybody till 6pm - I think people are going to be trapped sooner than later.
19/05/2006 - sensex opened 155 pts + but within 10 mnts dropped 450pts negative. The news is that Margin Calls triggered panic selling - It was the worst week in 4 months with a net fall of 1400pts.
22/05/2006 - ONE MORE BLACK MONDAY -
Market opend 155 Pts + but quickly went down & by 12 noon crashed 1111 points to hit the circuit breaker and trading suspended for 1 hr. Unfortunately I was not in the market as I had to accompany my son for his Engg.Admission. As I had kept the mobile in silent mode, the calls kept comming but I could not attend. By 1.30 when I was out of the college & rushed to the office I had 32 missed calls. Market managed to recover a bit and closed 457 pts negative @ 10481. the high & low of sensex on that day was 12671 & 9826
Again with sad face the CNBC reporters were saying that while it has taken 69 days to rise, the fall took only 7 days.
So remember that always it is difficult to go up but easy to come down(which may be true to a lot of other cases but my view is only towards stock market) and selling is as important as buying & holding.
Happy investing. Bye Bye
What MAY happen in MAY, MAY not be known to anybody. But let us recollect what has happened in the MAY in 2004 and 2006.
MAY2004
Market expected BJP to come back to power though there was some doubt about the no. of seats they MAY win and the kind of support they MAY have to seek from other parties. But it was disaster for them and Congress formed the Govt with the support of the Left parties. And even before assuming charge some left leaders made a statement that the DISINVESTMENT ministry will be scapped. What followed was MAYhem in Indian stock market. For the 1st time since the Exchange Authorities fixed circuit filters and lower and upper limits, Index fell 10% and trading stopped for 1 hour. and on reopening fell another 15% to stop again as per the exchange rules. If it had not opened higher from there within the next 30 mnts, trading would have been halted for the day. But some bottom fishing(even though the smell in the street was blood) helped the market to recover a bit but still closed with significant losses.
It is a different matter that the Govt has made significant disinvestments in the last 3 yrs and the Left Parties are strongly & dutyfully opposing to that. It is a classic example of the famous saying that " THEY DONT SAY SOMETHING TODAY AND ANOTHER THING TOMORROW". They are consistantly saying the same thing everyday for the past 3 yrs like Glenn Mcgrath Bowled consistantly on the offstump for 10 yrs.
MAY 2006
Even from the end of April 2006 the market was showing huge volatality with intraday swings of even 500-600 points(sensex) There were many classical signals to indicate market topping out but as usual (at the top) the confidence was also at the peak as Mutual Fund announcing new schemes everyday, every IPO listing price giving 100% & more return over the allotment price and every analyst talking about long term growth strory of India. The comments & observations of some of investors were so catchy that I started recording them in my dairy along with my own observations. I always do this to see how my reading is & correct me when I am wrong and pat myself when I am right. Here are some such observations reproduced from my 2006 dairy.
24/04/2006 - Monday - Market fell 147 Pts
25/04/2006 - Tuesday- Market fell 275 Pts
26/04/2006 - W' Day - Market recovered 290 Pts
27/04/2006 - Thrusday-Market fell 115 Pts - late in the evening SEBI order came on IPO scam. Very Harsh on 12 DPs and a few brokers like Karvy & India Bulls - market likely to crash 500 Pts - 10.20pm on seeing CNBC news
28/04/2006 - Sensex fell down 490 Pts in the 1st 20 minutes and then recovered steadyly to close 16pts +. Remarkable recovery as Indiabulls got a reprive from SEBI.
04/05/2006 - A client - Acoording to my Bombay sources bull market is just beginning and has a long way to go
05/05/2006 - A Stock Broker (with CA Qualification and 20 yrs exp) - Century Textiles will touch Rs.1000/- reason - 3 divisions to demerge resulting in Value Unlocking - On that day Cent.Tex was 580. from that in 1yr the stock touched a low of 258 in June 2006 and a high of 780 in january 2007 and is now at 609/- giving an effective retirn of 5% p.a if you had bought & held on till today.
06/05/2006 - A Client - He recently visited Singapore and met a few Investment advisors . According to them India is an Emerging market & so invest in Blueset of Blu Chips & hold for 5 yrs for very good return.
07/05/2006 - This is very intresting - comments from Investment analyst/stock broker
(a) Devanshu Datta - Sensex can tough 18000 to 19000
(b) Hemant Shah of Prabhudas Leeladhar - Bull phase will continue till 2008 - sensex to touch 20000
08/05/2006
My observation - Metal prices going up too sharply - bubble to brust anytime
09/05/2006
My Observation - Market going up crazyly. Nobody wants to pull out money inspite of cautions.
15/05/2006 - Market fell 500 Pts. Again termed by FM(not radio FM yaar, this is Finance Minister) as good & healthly correction - dont know when he became a technical analyst
Nobody is accepting the fact that FIIs are selling, interest rates are to go up and metel prices in bubble zone
16/05/2006 - sensex fell 500 pts intraday & recovered to close 50pts +. Again a deliberate & deperate attempt to hold & sell.
17/05/2006 - 2nd ANNIVERSARY of Black Monday(17/05/02004) - You know in India we celeberate birthday anniversary for dead people - Why not for stock market which is a living ligend - Market goes up 335 pts to mark that celeberation & Udhayan Mukharjee & Senthil Sengalvarayan's faces glow like sunflower greeting the SUN or a Peacock welcoming Rain bearing clouds.
18/05/2006 - Market crashed 890 pts due to a stupid CBDT(Central Board of Direct Taxes) issused to the press at 10pm last night stating that FIIs should be considered as traders and should be taxed at 41% instead of current 10% . And surprisingly no clarrification from anybody till 6pm - I think people are going to be trapped sooner than later.
19/05/2006 - sensex opened 155 pts + but within 10 mnts dropped 450pts negative. The news is that Margin Calls triggered panic selling - It was the worst week in 4 months with a net fall of 1400pts.
22/05/2006 - ONE MORE BLACK MONDAY -
Market opend 155 Pts + but quickly went down & by 12 noon crashed 1111 points to hit the circuit breaker and trading suspended for 1 hr. Unfortunately I was not in the market as I had to accompany my son for his Engg.Admission. As I had kept the mobile in silent mode, the calls kept comming but I could not attend. By 1.30 when I was out of the college & rushed to the office I had 32 missed calls. Market managed to recover a bit and closed 457 pts negative @ 10481. the high & low of sensex on that day was 12671 & 9826
Again with sad face the CNBC reporters were saying that while it has taken 69 days to rise, the fall took only 7 days.
So remember that always it is difficult to go up but easy to come down(which may be true to a lot of other cases but my view is only towards stock market) and selling is as important as buying & holding.
Happy investing. Bye Bye
posted by manipayal @ 10:23 PM
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