Stock market message from ROHAN MEHTA - technical analysit - watch him live on few business channels of india

Bears Rules!

As per my last month write up we had mentioned that because of Political instability and the Technical Outlook of Double Bottom @ 5750 a break decisively we had seen we are around the levels of 5350.

We had seen that we are below our 200DMA in major stock of NIFTY & Sensex

Dow Jones has hit its 2 years high and as we had written before some months Dow had attractive valuations at the range of 10500 as looks like lot of fund of FII is shifting from Emerging Countries to Developed Countries.

Politically Instability, Higher Interest Rates, Higher Cost Price of Material looks India Inc. Poor performance as this time Fundamental has joined Technical’s and we have entered into bearish markets.

Corporate Results on the other hand started on a positive note. Around 400 Companies have declared their results with a Top line Growth of 22% and a Bottom Line Growth of 25%. This is one of the robust growths.

We are heavily bullish on 2 Stocks i.e. Standard Chartered Bank IDR & CRISIL India and both of them have outperformed in this falling markets i.e. we have a difference between a Value and a Price.

We have seen that there is a lack of Interest is going on in Equity and lot of Retail Money is shifting to GOLD & Real Estate. Where i personally believe that Equity will be more attractive as an investment leaving this 2 other asset class as Gold below 19300 may enter into Long Term Bearish Zone & Real Estate are at pick but with money tighten in real estate i believe that it may also correct around 10-15%.

Fundamental Outlook: We are Trailing near about 19 xs PE, we believe that 17x will be a greater opportunity to invest in the markets considering the valuations. IT Stocks seems to be over prised where as we believe Infrastructure available Deadly Cheap Valuations.

Technical Outlook: 5350 a Triple bottom formation is made in NIFTY, any close below that we may come around 4900. Till we are not closing above our LONG Term Average i.e. 200 DMA 5635. We cannot consider this market as a bottom fishing opportunity. Anything above 5750 will hit a Bulls eye for further upside!

Recommendation: Don’t bottom fish any stock just because it has gone down a lot. Buy value not price and in this market the Safest Investment is NIFTY,JUNION,GOLD Bees ETF.

Happy Trading&Investments

Rohan Mehta