Auto stocks: Right time to buy cheap?

Auto stocks were under a huge selling pressure in Sept-Oct, dragging Nifty Auto index down to a correction. Rising insurance costs, increasing interest rates, and volatile commodity and fuel prices made the investors jittery ahead of the earnings, which also came out muted at large. In November, auto stocks have exhibited some strength led by good price-volume action in stocks like Maruti Suzuki and Eicher Motors (up 16% and 19%, respectively, from their recent lows). However, as per the CAN SLIM methodology, it is important to wait until the stocks display strong earnings and breakout from a strong base pattern. Continue reading “Auto stocks: Right time to buy cheap?”

Special Article

Current Market Status

The market showed signs of weakness with three down days in the holiday-truncated week ended November 22. The general trend of the market faced resistance from global sell-off during the week. The Nifty IT and Nifty Metal indices were the top losers.. A strengthening Rupee was a major concern for IT firms. With the ongoing negotiation between the Reserve Bank of India and the government on the PCA framework not ending with a material result, Nifty PSU banks lost 2.75% in the week. The next RBI meeting, scheduled on December 14, will be critical in this regard. Nifty Pharma managed to end flat, supported by Dr Reddys Laboratories’s gains, whereas Nifty FMCG, Media, and Realty ended in the green. Continue reading “Special Article”

Special Article – Market Condition and How to Approach the Markets this Week?

Current Market Status

A majority of the Nifty 50 companies have reported their september quarter earnings. A healthy double-digit average growth has been posted, hinting at a revival. The relatively benign movement of Crude Oil prices and the Rupee also contributed to the Nifty sustaining the 10650 level during week ended Novemeber 16. The Nifty and the Sensex were up 0.92% and 0.85%, respectively. Nifty Midcap and Smallcap on the contrary fell 0.55% and 1.23%. According to MarketSmith India’s methodology, at the end of the week, Nifty Reality, Bank, Financial Services, Energy, and Auto are in a Confirmed Uptrend, whereas Pharma, IT, Metal, and FMCG are in a Rally Attempt. For the week, Nifty PSU Bank (+2.5%) and Nifty Financial services (+2.4%) were among top gainers whereas Nifty Pharma (-3.6%) and Nifty Metal (-2.3%) were the top losers. The YTD returns for the Nifty and the Sensex are 1.7% and 3.8%, respectively. Continue reading “Special Article – Market Condition and How to Approach the Markets this Week?”

Market Condition and How to approach the markets this week?

Current Market Status

The Indian market bid farewell to Diwali week on a positive note. Barring Nifty FMCG (-0.37%) and Metals (-0.21%), all the indices ended in the green this week. Top gainers for this week are Nifty Realty (+2.15%), IT (+1.09%), and Auto (+1.06%). According to MarketSmith India’s methodology, at the end of the week, Nifty Reality, Bank, Financial Services, Energy, and Auto are in a Confirmed Uptrend, whereas Pharma, IT, Metal, and FMCG are in a Rally Attempt. During the week, the Nifty and the Sensex were up 0.31% and 0.42%, respectively. Broader indices continued their winning streak as the Nifty Midcap and Smallcap rose 1% and 1.32%, respectively, both the indices are in Confirmed Uptrend currently. The YTD returns in the Nifty and the Sensex are 0.52% and 3.23%, respectively. Gains on the Nifty were driven by Yes Bank (+11.70%) and Tata Motors (+8.9%).

Looking ahead, What’s in store?

Last week, we changed the market status to a Confirmed Uptrend, since then we have seen some strong actions in leading stocks like Tata Motors, Maruti Suzuki, and Yes Bank. Ideally, after a follow-through day, we would like the Nifty to retake its key moving averages. Currently, the Nifty is ~1.65% below its 200-DMA and we will get a strong conviction about the current rally once it crosses that level. Today, it broke the 10,600 mark and the next key support level to watch out for is 10,490.

What can investors do?

The earnings season has been a mixed one with some companies being badly impacted due to rising raw material costs. Sudden rise in global markets, stable crude and currency price movement is helping the Indian market to march toward its key support levels. As the market is in a Confirmed Uptrend, investors are advised to look for fundamentally strong stocks trading constructively above their 50- and 200-DMA, and are about to break out on higher volume, to add to their portfolios. Some of the good quality stocks are Aarti Industries, ICICI Lombard, Vinati Organics, Divis labs, and PVR. On the contrary, the stocks that have undercut their key support levels such as 50- and 200-DMA on heavy volume should be sold as it indicates a technical weakness.

What do you think? Please email us any questions or comments.

Stocks for Muhurat Trading

Samvat 2074 was largely impacted by subdued investor sentiment and diminishing foreign inflows, while the Sensex and the Nifty remained nearly flat. The broader indices followed suit and underperformed, with key composites such as the Nifty Midcap and Smallcap falling nearly 9% and 30%, respectively.

On the sectoral front, Realty and Auto stocks hogged the limelight, while IT and FMCG stocks performed poorly. Overall, it turned out to be a negative year for most sectors. Continue reading “Stocks for Muhurat Trading”