Thursday, December 15, 2011

Santa Claus Rally

The “Don’t Worry, Be Happy” crowd on
Dalal Street would very much like to get their greatest fable into full gear – the Santa Claus rally. Unfortunately, a few silly matters they would like us to consider unimportant, like the financial crisis in Europe and the coming debt disaster here in the U.S., has caused a flight delay of Santa’s ride over Wall & Broad.
But with “Gobble, Gobble” day near, I suspect the “happy” people and their favorite landing place for Santa’s reindeers .
As the name suggests, a Santa Claus Rally is when the stock market indices move higher.
There are certain times of the year when specific markets and sectors do better. We call this seasonality.The Santa Claus rally is a rise in stock prices in the month of December, generally seen over the last week of trading in December.
Focusing on the month of December and taking into account the last 10 years of market activity, I have created probability for you.The December Low Indicator was originated by Lucien Hooper, a Forbes columnist and Wall Street analyst back in the 1970s. Hooper dismissed the importance of January and January's first week as reliable indicators. He noted that the trend could be random or even manipulated during a holiday-shortened week. Instead pay much more attention to the December low. If that low is violated during the first quarter of the New Year, watch out!
As sugested in our blog last time booking profit on Nifty at 5090 turned true we gave you to go short on nifty which in turn did fall to 4670.Now as told previouly 4650 on nifty and 15500 on sensex seems to be good support.Now some bullish stand can be built expecting markets to go up in december .
Thanking You
Atul Sikrai.
Sr Vice President & Head Equities
wiTdom investment advisory.

Tuesday, December 6, 2011

Book Profit: Take Your Money Home!

We gave you buy call and markets around the world have bounced back.
Nifty has risen from 4650 to 5090 level and Sensex too has bounced back to 16900 levels from 15500 today. We suggest you to book profit in long trade.
Why to book profit?
We have seen quick gains in markets .Index have raised any where more than 7- 10 percent from recent lows and stock have raised any where from 10 – 20 percent.We see Euro finding resistance around 1.35. This will give support to dollar index at 78.It’s smart to book quick gains by going bullish on market.
So, it is important to realize that profit-booking is an important part of investment. And there are a couple of ways one can book profit. For that, the advice varies from stock experts to financial advisers, as the two communities play different roles. On the other hand, financial planners’ job is goal-oriented. They decide on investment, depending on what is to be achieved and when. They also take the risk appetite of the investor into account and, accordingly, allocate the money. As per them, profit-booking can be done at several stages.
When it comes to stock market investment advisers, they believe in booking profit at every rally. These experts look at equity investment only as a tool to grow wealth.

The journey of the market is never linear. There are interim rallies or corrections every now and then. These experts suggest that investors should buy at these interim dips and sell during rallies. But this does not mean that the entire portfolio should be sold and then bought back.
Smart Investor can go Short Too.

Thanking You
Atul sikrai
Sr Vice President & Head Equities.
wiTdom investment advisory.