page ind : any investor’s dream stock. has never closed below 200 dma and has never corrected by more than 20% since early 2009. currently it seems to be in the last uptrend of this major bull market since 2009. once it closes below 200 dma(currently 3650) for a week, we could see a sizable correction. until then, its a buy on dips.
mayur - currently undergoing consolidation since last 1 year which looks like primary wave 4 of this cycle wave 1 bull market. i would expect one more uptrend to 550+ before the bull market concludes. any close below 400 and we are looking a significant correction.
adtiya birla nuvo’s charts right now don’t give me any indications that a major bull run has started there which could take the stock 5x in 5 years. my observations are:
there was a good uptrend in early 2009 where stock rallied from 350 to 1050 in a few months after which it moved into multi-year consolidation between 700 and 1050 before it broke out of this range in late 2012 and until recently was trying to consolidate above this range. only recently has the stock started to move higher after taking support at 200 dma on each correction. we need to see non-overlapping uptrends before we can conclude the stock has started a major bull run. first step would be a rally to 1500+ and the subsequent correction holding above 1200. this would be the first encouraging sign. i would like to take one step at a time and see how this uptrend goes.
Thanks as always for taking the time to reply to everyone.
Could you please share your buying strategy as you mentioned that you are expecting a major low in Nifty (around 4600 levels) and also loading up on some of your favorite stocks now?
If Nifty were to go that low dont you think we would get better entry levels?
Just trying to learn from your experience.
Also if you could give your technical views on GRUH please …
my expectation if nifty crashing has come true. i am a market addict and like to stay invested regardless of market situations unless my stocks are extremely overvalued like 2007. on every significant dip or crash i keep buying in small lots with fresh cash or sometime rotate within stocks. i follow pyramid buy strategy which comes in handy in case of severe falls like the one now. i buy 10% of my desired quantityat 20% fall, 20% at 20% fall and so on…this way i buy more when its cheaper. this has served me well over time. i still think over the next 1 year or so nifty would keep finding new lows and i will keep investing when i have cash and find an oppurtunity.
Accelya business model is a bit different but easy to understand. Unlike other Indian IT cos it’s successful n leading a product company n that too in its forte of revenue n business intelligence sector of airlines. The busines is non linear not proportional to head count . Operating leverage comes into play once the top line increases due to its fixed cost which it seems is working beautifully since Accelya took it over.
It’s business is directly proportional to no of transactions taking place as its paid on per transaction basis . The key differential is the choice of Accelya as IT partner by fast growing Ethihad airlines . Ever since then the no of transactions are growing fast thus directly benefitting Accelya. Other airlines too find this opex based outcome based pricing model very attractive. Accelya besides getting steady business gets a client for 5-6 years .
Ethihad which has recently taken over Jet Airways in India has also tie up with other air lines like Air Seychelles, Air Berlin, Serbia Air, air lingers, Virgin Australia n is on lookout for others as well. This is turning very beneficial for Accelya as well
Indian IT cos want to go in for non linear business model and as such ET now had floated a news that Accelya might get sold for around 2100 cr mkt cap compared to 900 cr mkt cap.
Co doesn’t need much cash n is distributing heavy dividend n depreciating rupee is also acting as major tailwind.
Was reading your comment about the Nifty yesterday and today I read about Shankar Sharma’s interview in ET about India and other emerging economies entering into bear market. He was very sceptical about banks in particular. He was particularly bearish about private banks. What is your view on the whole issue of derating of private banks? I do agree that private banks have better credit appraisal processes in place as compared to PSU banks (most of the rotten companies have PSU banks as its lenders) but still Yes Bank took exposure in Deccan Chronicle (have worked in debt markets for a year and Deccan had a very bad reputation) or Indusind Bank still lends to Tractor sector (there are whole lot of issues there with over financing). I think HDFC Bank is of different pedigree all together but even it has started lending to infrastructure sector. Would like to hear your views on it?
I have another question for you. What are your targets for NIFTY in the near term? How is the bear market expected to affect the stock prices of growth companies like Astral, Ajanta, Kaveri, PI, Cera etc? What should be a strategy of an investor like me who invests on a SIP basis be in the current markets? Should I accumulate cash and then invest at the bottom or keep on investing on monthly basis (it might be difficult to catch the bottom but currently the bottom seems far)?
gruh continues to be in time-correction phase with stock moving between 190-250 since the beginning of the year. i do think gruh will continue to be in this range over the medium term. this could be setting up the base for next leg up. below 190 we could see a much deeper correction.
My personal opinion is that even if Gruh falls 10% from here on still its expensive. Because, historically it has traded around 15 or lesser PE … so maybe Gruh good(again not screaming buy) buy at 150-160. But bear market history shows that true bear markets actually offer screaming buys
torrent pharma - stock had a dream run from 60 levels in early 2009 to almost 338 in july 2011. this can be counted as primary 1. stock since thenwas trading rangebound for an year or so before it broke out in apr-13 after good results. this seems to be a part of primary 3. the stock is currently testing 100 dma and there is decent support at 365-370(200 dma). if 330 is broken, then this wave analysis is wrong and we could be headed to much lower levels.
pi industries - I am bullish on this stock. the stock has been uptrending since 2009 with occasional test of 200 dma. even in this current carnage, it has held out pretty well. wave-wise, primary 1 from 9 in 2009 to 130 in sep-11. primary 2 from there to nov-12. since then it has been uptrending in initial part of primary 3 which should take it to much higher levels once this correction is over. for this wave analysis to be true, 100 needs to hold.
private banks will do well over long term but one would have to ride out the volatility in the short term. this correction also provides excellent long term oppurtunity to buy these private banks at fairly cheap price. hdfc bank would do better than most but yes bank would recover the fastest once the market stabilises.
good quality stocks usually hold on pretty well in the initial stages of the bear market but in the final stages everything is dumped without making any differentiation. thats what happened in 2008 and that is how i expect this bear market to end. the only caveat is once the correction is over(believe me you will not find out until many of the beaten down stocks almost double in value), the good stocks would recover most of the lost ground and rally even more because until then, their earnings would have grown and PE would eventually play catch up to that. I prefer to invest when i find value regardless of index levels. i do that in phases and i have explained my pyramid strategy in another post. currently i find deep value in ajanta, indusind bank, yes bank, kaveri and PI ind. i have been buying them slowly on each fall. always do keep some cash with you at all times because you never know when you can get to buy one of your favourite stocks at 20% lower circuit because a big investor panicked and wants to get out.
Ajanta is at a very tempting level. Hows the technical charts looking? I know you mentioned 800 is a good level to buy, but considering the fall to 720 and overall market conditions do you see even better entry point? Are you buying at this level?
atul auto - stock has been correction since the all-time high it made in early 2013. it is currently wave C of this decline and has decent support at around 140-145. once that breaks, it could drift towards 100. in this weak market, that is quite possible. i would either buy it at 100-105 or on rally above 200 dma at 180 where stock gets into an uptrend again.
mps - after the rally from 50 in late 2012 to 150 in early 2013, the stock has been rangebound between 100-150. this seems like a wave 2 correction after intial wave 1 uptrend. until 100 breaks on the downside, the medium term outlook remains positive. once the stock clears 150, it could rally towards 250 next. stock could be bought at 100 with a strict 5% stoploss.
sun pharma - stock has been in a very strong bull market since 2008 supported by equally strong fundamentals. it has rarely ever traded below 200dma and hasn’t corrected by more than 20-25% in this entire bull market. the whole bull move appears to be as primary wave 1 which is still ongoing. stock has strong support at 200 dma(around 440). any correction to that level is a strong buy. once the stock gives a weekly close below 400, I would expect primary wave 1 to be over and a large correction of upto 50% from the peak to follow. i have been accumulating it on every dip in this market correction.
ultratech - stock has crashed below 200 dma which makes the long term trend down for now. it would turn positive on a rally above 1800. stock is oversold is due for a bounce.strong supports come in at 1250 and then 1000.
ajanta’s medium term trend is down but long term trend is still up as the stock continues to trade above 200 dma at 700. it has corrected in a ABC corrective pattern since the peak to the current level and the current downtrend is last leg of this downmove. once this downmove is over(i expect it to bottom out in 675-700 range), i expect it to touch all time highs again over the course of next 12-15 months. i am accumulating it at every dip and have increased my exposure significantly recently. stocks on my buy list recently in this carnage have been - ajanta, astral, hdfc bk, indusind bk, kaveri, pi and sun pharma. I still see quite a bit of downside in the market and hence have been accumulating in small quantities. hope this helps.
