The strength in Indian equity markets in last month or so has been phenomenal, we have broken past all resistance and now atleast on technicals we are looking as strong as in most bullish phases in recent times. FII’s has been the rainmaker with more than $5bn flowing into Indian markets.

Nifty was in the Downward channel for past few months but recently broke out from that range making a higher high which can be clearly seen by the chart below

As we can see above 5180 on Nifty it has given a breakout and with last week giving a minor pullback Nifty has broke the months long bearish pattern, now with technicals improving market sentiment, now institutional money will try and focus on fundamentals to justify this runup and with expected rate cut by RBI as a response to decreasing food price inflation and faltering GDP growth this rally can have more legs upward.
Now all eyes from D-street will be on Budget and any positive announcements can fual the rally further to all time highs in next three month.
sector specific, high beta like Banking & financials, Reality, Autos and Metals are expected to do well, with some support from IT.
FMCG and Pharma will under perform as they always do in upsurging markets.

It is expected that in FY13 India will have GDP of over $2-trillion and that too on high internal consumption, this will improve sentiments and more foreign money is expected to chase Indian market.
It is still a very good time to build a long term equity portfolio for those who have not invested yet or missed out on the previous rally as we are only in initial stages of a Bull market, as a consensus India is expected to do very well in next 3~5 years and Equity markets will reward handsomely to those who will be invested during this period.

Now for traders there is only one advice, Trading is the game for more sharper people and for those with high risk taking capacity.
it should not be tried by everyone, else you’ll only be burning money.
And those who do trade keep in mind this line and you all will do good.

“The Trend is your Friend Till It Bends….. But Those Who Worried About The Bend will Never Earn Till The End.”

At the outset, let me wish you all a very Happy New Year.
After ending the 2011 on disastrous note with Benchmark Indices Nifty going down by 37.5% in Dollar terms and eroding close to 20 lakh crore of Investor wealth in single calendar year, things are not looking any better either while we make step in to new year.
Interest rates are high,Fiscal deficit will overshoot its target and might go upto 6% of GDP, Investor sentiment is at all time low that’s why we are not seeing any fresh buying emerging even after such a massive fall in markets.
Sensex is trading at 12 PE on earning projection for FY13, which is historically on the lower side of the range, and adding to woes of Central Bank rupee has depreciated by 16% this year which makes life hell for RBI, which is solely fighting inflation with monitory policy.
On the other hand Global environment is also looking gloomy, with Euro zone ‘s debt crisis will continue to haunt global markets and decline of Euro to an all time low against dollar will compel investors to park there money in Commodities and precious metals like Gold and Silver. So no respite for equity markets as the first half is looking very tough for the markets in 2012.
On the domestic front Government has led down on every front, markets have been zotted by massive unearthing of 2G scam and corporate biggies spending their time in prison to huge inflationary pressure on the food articles and adding to woes the Govt. inability to take any policy decision for economic reform, the way govt. took the issue of FDI in retail was like inviting somebody for lunch and when they accept the invitation you say i was just joking.
Technically speaking we are in middle of nowhere, markets have been trading in bearish territories for so long and i don’t see markets getting out from the clutches of bears.
i am not posting any charts as there is nothing new emerging in terms of chart pattern, what markets are likely to do in the next one year will be more determined by the action taken by Govt. and RBI.
Any start of rate cutting initiative by RBI will boost market confidence and i believe it might happen from this month onwards.
I am ready to hang my neck out and say we are very near to bottom and probable range for SENSEX for 2012 might be 14000 to 20000 as i see a recovery staged in second half of 2012.
but

Before you get the goodies, you have to under go pain first.

This is a monthly chart of Nifty from 2005 onwards and the Fibonacci Retracement  levels are presenting very clear picture in front of us.
If Nifty is able to hold onto 4750 levels on the closing basis on monthly chart than the chances of start of another bull market when global environment become conducive,  are very bright.
But in case we break the 4750 than we are looking at 4300 which is also a long term support for the market, below this level pull up your pants and run because Nifty is going to dogs in this case.
On the upside we can safely assume that the worst is over whenever we start trading above 5400.
In between Its a market for both Traders and Investors who want to bet on long term growth story of India, as i feel there are lots of  largecaps with huge amount of cash on the balance-sheet are just waiting for the opportunity to grow inorganically, one prime example is Reliance Industries.
Traders should stick to there systems and use proper Position sizing and Money management rules by following stop-loss on trades and look for smaller profits rather than playing for that big move.
I have been busy myself, but hope i will be more active than in the past.
Thanks for Visiting and sharing.

It was a hot Tuesday afternoon, with markets trading flat when one of the biggest shocks of the recent time for Indian Stock Market came storming in.
State Bank of India, the largest Indian bank came out with utterly disappointing financial numbers for Q4 FY11.
The Profit After Tax (PAT) tumbled a whopping 99% y-o-y to a meager Rs 20.8 crore, and Stock reacted quickly and crashed nearly 8%.

The company and the whole banking sector itself was feeling the heat for a time since RBI has been raising key policy rates to curb soaring Inflation. The Apex body of banking has raised interest rates for the 9th time since mar 2010. In latest policy meet on May 3 they have also raised the interest rate on savings bank accounts by 50 basis points (bps), or half a per cent, from 3.5% to 4%. This key policy change might bring some smile to a large no. of account holders but it will certainly hit Net Interest Margin(NIM) of Banks, and SBI is is not spared either in fact it will suffer the most because of  large base of Savings Account in its overall deposits.

The Net interest income(NII) was up 20% y-on-y to Rs 8058 crore, along with Net interest margin falling 31 bps to 3.3% in Q4, FY11.
The biggest reason for this shocking Financial performance by this PSB major is higher provisioning, It made a provision of Rs 4157 crore versus Rs 2349 crore a year ago. Out of total provision, the bank has earmarked Rs 3264 crore for NPAs as against Rs 2187.  Gratuity provision rose to Rs 1565 crore as against Rs 46 crore in FY10.The company’s provision for NPAs was up 49% at Rs 3,264 crore versus Rs 2,187 crore, YoY. Its gross NPA at 3.28% versus 3.05%, YoY. Its net NPA was at 1.63% versus 1.72%, YoY. The Reserve Bank of India has mandated that banks must reach provisioning coverage ratio of 70% for the NPAs recorded till September, 2010. (Data Taken from Major Financial portals)

The road forward for SBI is also ain’t smooth with similar kind of provisioning expected in quarters to come the Stock may remain under-performer and lose out on the traders interest.
My view still remains the same, for an investor looking for long term opportunities the recent crash in stock price has only sweeten the deal, so go ahead and by in truck-loads.

In other major development, The Govt. has  increased upstream share to 38.5% of total subsidy burden of about Rs 77922 crore for FY11, Now the Upstream companies like ONGC will have to bear burden of Rs 30,000 crore in FY11, when i first saw the news i thought i should not react to it as in my whole life i have never Invested or given any kind of investment recommendation to anybody for ONGC (used to be the biggest PSU, now sharing the spot with Coal India and IInd largest listed firm, now  coal India and TCS catching up).

A company of this scale and size, was never an investment opportunity according to me, This gem of an company has been turned into stones by we Indians only, As quoted by an investor “ONGC is the victim of most absurd petroleum  products pricing, subsidizing and misusing activities of Indians.”  First we will put up alcohol like tax on petrol and diesel only to increase under-recoveries and then subsidized it by taxmen money and put financial pressure over Fortune 500 companies like ONGC and IOC.
why an ordinary taxpayer pay the price of the diesel used in electricity gen. sets and in luxery diesel sedans.

This article owes to my friend who asked me something related to fundamental analysis so here i decided to write a complete article on this. I am also quoting my reply given to him which i feel may help a lot of people having similar doubts.

here i am assuming one is familiar to stock markets and had been involved in trading or investing in markets directly or indirectly.

Fundamental analysis is looking at a business at the basic or fundamental financial level, which means you do analysis and comparison between companies operating in same sectors before you pinpoint on a particular company to park your hard earned money.
Now we come back to how it is done and why it is done, the answer for why it is done is quite simple, wont you like to make smart decision so you can invest wisely with proper information and most importantly with knowing what you are doing so that whatever decisions you take is based on some concrete analysis of data and you yourself are convinced to make an entry into companies list of shareholders to attain the satisfaction and peace of mind knowing.
So now we are left to find an answer to how it is done, one of the most important ways is by using the known financial ratios like:
Earnings per Share – EPS
Price to Earnings Ratio – P/E
Dividend Payout Ratio
Dividend Yield
Book Value per share
Projected Earning Growth – PEG
Price to Sales – P/S
Price to Book – P/B
Return on Equity – ROE or Return on capital employed – ROCE

to get an overview on what these ratios stands for you can use Google or jump to http://niftystrategy.com/knowledge-center/ and if you are left with any doubt you can also ask here.

For fundamental analysis I have one more thing to share, I feel the fundamental analysis is very subjective thing because of lots of factors, one example I’ll give you to make you understand what i am saying is;
one of the most important part of fundamental analysis is “history or background of promoter” in short “who is the promoter” because we really don’t want to invest in a company run by Mr. Ramalinga raju
so tell me is there any possible ratio or financial statement or for that matter software, which can tell the difference between narayan murthy and deepak parekh or can compare them with scamster like Raju. So there are many ways to do the job of fundamental analysis but i do feel one can get the hang of it only after he/she had been involved in stock market for a while, these things come with experience. As you keep researching about different aspects you will eventually learn and you will get your answers related to fundamental analysis.

Thanks everyone, share and discuss more to learn more.
you can also join Facebook page of niftystrategy.com at http://www.facebook.com/pages/Indian-Stock-Market/121754187894140
hope to meet all my readers there.
Thanks