Thought for the day
"The ruling ideas of each age have ever been the ideas of its
ruling class."
-
Karl Marx (German, 1818-1883)
Word for the day
Grok (v)
To understand thoroughly and intuitively.
(Source:
Dictionary.com)
Teaser for the day
Imagine the chaos if "No
parking - no car" rule is implemented retroactively!
"Kya lagta hai?"
In a recent interview, Rahul Dravid famously commented that had
he charged one rupee each time he was asked to answer the question "why
did he declare the innings at Multan (2004) when Sachin was batting not out at
194?", he would be millionaire by now.
I can also say the same thing with some confidence if I consider
how many time my friends ask the question "Kya lagta hai?" (how does
the market look?)
I have no hesitation in admitting that I have been often far off
the mark in predicting Nifty or Sensex targets over near term. Any hit in the
bull's eye had been purely accidental and was never intended.
The only motivation for people who repeatedly pop the question
perhaps is that more often I could see the direction of market move right. For
example, only last month I suggested that market is in buy on dip mode and any
short selling should be avoided for next two years. I was right on this count.
Though I did not anticipate market moving above 8250 mark so rapidly.
Anyways, that is an occupational hazard everyone who has to
answer "Kya lagta hai?" must live with.
Given the eagerness of many readers and people I interact
frequently in the course of my quest for assessing the ground realities, I
would like to address this question once again, before I take up more academic
issues like reforms and budget expectations.
Near term outlook (3 months)
Near term direction of market is now a function of FII flows and
budget expectations. With BoJ and ECB committed to keep the market flooded with
liquidity, flows should not be a major problem. The technical overbought
conditions may ease in next couple weeks. No surprises if Nifty tests 8970 in
next three months. For mow, downside looks protected at 8120 to me.
Short term outlook (6-12 months)
Market may witness higher volatility and larger moves in next
6-12 months. While not much further negative is expected to occur on domestic
front, global uncertainties may rise with deceleration in Europe, Japan, China
and major commodity producing emerging markets. Save for a drastic global event
like Lehman collapse (not improbable), Nifty should move closer to 9400 and may
not fall below 7420 level. Strong buying and leveraging opportunities will
emerge in to 7850-8000 Nifty range.
Mid-term outlook (12-24 months)
Expect Nifty to make a strong positive move over next two year
with upper bound at 10800. The risk reward at present from this perspective is
positive. Much sharper move could be expected in broader markets.
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