SPECIAL ANALYSIS

This is the special analysis report produce by EquityPandit.com to help our visitors. We get hundreds of emails daily with the questions:

- What would be trend of market in near future?
- Why market is going down?
- When market would stabilize?
- What time market would take to reach again the previous heights?

For last one month, I and my team including Mr. D.J. Shah (Financial Analyst, EquityPandit.com) is working on all these questions. And finally we were able to make all the questions regarding Stock market, transparent. Behind these following lines, there is a lot of analysis, which was done by EquityPandit.com

Let’s move into the History of Indian Stock Market.

The 1992 Cycle

Market Peaked – April 1992
40% correction – July 1992 (3 months)
Market Bottomed – April 1993 @ 60% of peak level - Total correction
Sensex PE at bottom – 10x
Back to previous high – October 1999

6.5 years from bottom to reach April 1992 highs – Recovery


The 2000 Cycle

Market Peaked – February 2000
40% correction – October 2000 (8 months)
Market Bottomed – September 01 @ 58% of peak level - Total correction
Sensex PE at bottom – 10x
Back to previous high – January 04 –

4.25 years from bottom to reach April 1992 highs – Recovery


So now let’s talk about the present crisis:

The 2008 Cycle

Market Peaked – January 2008
40% correction – August 2008 (8 months)
EXPECTED Market Bottom @ 60% of peak level = 8320 level (We guess)
EXPECTED Sensex PE at bottom – 10x

2.75 - 3 years from bottom to reach previous peaks. (We assume)


From this analysis, you will come to know market behaviors that it will never change its mentality. How it follows its history.
We have taken two terrible examples from the history of market & when We compare its price (%) movement with present one, it follows in a same way in a same time frame.
So it shows that why we need a kind of model which can guess the upcoming moves of market under different circumstances, which EquityPandit.com is doing right now.

Conclusion:-

1) Market flow will depend on FII movement only. Movement Chart is directly proportional to FII inflows or their outflow.(Ex: Year 2000 FII investment increase by 52% @ the same time market increase by 60% n when they withdraw their 53% investment in sep 2001 market was downed by 55%)

2) Market reacted five/Six month before some good/Bad happened actually (Ex: Prices of metals have broken by 38% within this three month but market already taken that factor before six month when prices of all metal sector shares started down by 10-20% and that trend continue now also).

3) In Every down cycle the correction gets higher and higher where recovery time becomes shorter and shorter (See case of 1992 vs. 2000) so this market will take recovery time of atleast 2.75years as per our analysis.

4) It created same percentage of volume during a day or two day before great fall n great jump.

As we assumed in morning that market would see both uptime and downtime, market followed the same trend today. We already assumed in morning that market would create new lows today, and the result is here. Market ended below 10K ! At the end of the day market ended with:

Sensex: 9975.35 ( -606.14 Points down)

Nifty : 3074.35 ( -194.95 Points down )

But friends, even in this downtrend, you might have earn a good profit today as we assumed the market in morning. So guys, get ready for our tomorrow's post, our hard work for last 1 month, The big research and analysis on the market. Stay connected........

Market is assumed to see both up and downtime today in trading session. Day to stay active and conscious. You can go for both intraday and shortselling but timing is very important.

BSE Sensex: (10581) we were expecting a test on the previous low of 10240 and market reached that level and made a new low of 10018. The market came of its low in the late trading session due to the psychological 10000 mark but gave up its gain in the last hour. Now if 10000 goes than 9700 is a strong support to deal with.
The support for the Sensex is 10000-9700 and the resistance to the up move is at 11410.

NSE Nifty: (3269) the support for the Nifty is at 3000-2907 and the resistance to the up move is at 3378-3411

Volumes suggest that market creates temporary bottom and comes into consolidation phase n again it will make new lows cyclically so just wait n watch.

The following companies are going to declare their results tomorrow.

Company
ADOR FONTECH
ASIA IND NET
AUTOMO COR G
BANARA BEADS
BRESCON CORP
CANFIN HOME
CAPRIHAN IND
CHASE BRIGHT
COMP DISC IN
CYBERMAT INF
ECLERX
EIMCO ELEC I
ELANTAS
ELECON ENG C
EMMESSA BIOT
FAG BEARING
GOA CARBON L
H.S.INDIA
HIND.FLUROCA
HOUSING DEVE
I BRIGHT ST
IND INFOLINE
INDIACO VEN
INE ABS L
JK PAPER
KELTECH ENRG
MADRAS ALUMN
MIDPOINT SOF
MYSORE CEM
NOVARTIS IND
NU-TECH CORP
ORIEN.HOTEL.
PANACEA BIOT
PONNI ERODE
PULSAR INTER
RANE BRAKE
RATNAMA META
ROHIT PULP P
SATYAM COMP
SHUKR BULL
SHUKRA JEW
ST BK TRAVAN
SUPREME PET
TAM.JAI.MILL
TATA COFFEE
TATA ELXSI
TOTAL EXPORT
TRITON VALVE
VST INDUSTRI
WELCAST
ZENOTECH LAB
ZENSAR TECH

As we assumed in morning market was down for the whole day, no big effect was seen by decrease in CRR by Finance Minister. Market is now totally dependent on FII inflows and outflows. For more details you can visit our Post Role of FII in Indian Stock market. Market ended lower led by sell off in oil, capital goods, technology, auto and power stocks, though they saw V-shape kind of recovery in the second half of session after the free fall in the first half of the session. Recovery was led by short covering as well as some buying in the overbeaten down stocks. At the end of the day:

Sensex:10581.49( -227.63 Points down )

Nifty: 3269.30 ( -69.10 Points down)

You might have earned by shortselling and intraday as we already predicted the market trend in the morning. Shortly we would come with our new research on the market and FII which would help you to predict the market trend beforehand and take care in investment strategy. So guys, Stay connected !

Still not a very good time for the market. Even though CRR cut is there it will shows it’s effect in the medium term specially on the banking system so market wont take it positively unless we get clear clues from global market. Cause market will stabilized only if FII selling will stop.

BSE Sensex: (10809) So far the structure still looks weak and we see a retest on the previous low 10240.The support for the Sensex is 10240-10000-9700 and the resistance to the up move is at 11410.

NSE Nifty: (3338) the support for the Nifty is at 3198-3000 and the resistance to the up move is at 3491.

The second quater results of the following companies are going to come tomorrow on Thursday, October 16, 2008. Market would again react on these numbers.
ASIAN STR CO
CAMLIN FINE
CHETTINAD CM
DAIRYFIELD
DOVER SECURt
ETC NETWORK
FINOLEX CABL
FOSECO INDA
GTL LIMITED
HDFC BANK LT
HIND.FOODS
IND INV TRUS
INDAG RUBBER
INDO ASI FIN
INDO GREEN P
INDUS IND BK
INUSVISTA
JHAV FLEXO
JIK INDUSTR
MAFAT FIN CO
MPHASIS LTD
NIIT TECHNO
OIL COUNTR T
PENLAND LTD
PIRAM LIFE
RALLI INDIA
SASKEN COMM
SCHRADER DUN
SPAN DIAGNOS
SR RAYAL ALK
SRINIVA HATC
UNITECH INTE
VMF SOFT TEC

It was a dreadful session for the markets. It seemed that markets fizzled out two days pullback rally due to bad global cues, wherein financial stability is still big concern for global banks. Asian and European markets have witnessed huge selling pressure. The Sensex has closed below 10,900 and the Nifty tanked below 3350.
Flows are negative at FII desk. A leading foreign fund has turned negative on the metal sector. L&T has failed to impress dalaal street by its second quarter numbers; entire capital goods space is under pressure post results. Midcap and small cap stocks are still vulnerable to margin call pressure. At the end of the day :

Sensex:10809.12 ( -674.28 Points down )

Nifty: 3338.40 ( -180.25 Points down)

As we assumed in morning that market would surely react to the numbers presented as results of the companies, we might be at the safer side.

Larsen and Toubro crashed 11% on the back of dissappointing second quarter numbers. The company's Q2 topline is in line while bottomline is below street expectations. Net sales stood at Rs 7682.20 crore and net profit at Rs 460.26 crore while market estimated numbers were Rs 7,314 crore and Rs 494 crore, respectively. Margins also declined to 8.8% from 10.7% YoY. There was about 25% cut which let the Indian market go down.

Today, Following companies are going to produce their quaterly results. Market would surely react according to their results.

AMALGAMATED
ARMAN LEA FI
ASTRAL POLY
B NANJI ENTR
BHARAT SEATS
CIRCUIT SYS
CMC LTD
CONTAIN CORP
ELECTROSTEL
FACT ENTERP
HCL TECHNO
I.C.S.A. IND
JAYANT AG OG
KAVERI TELE
KFA
L.G.BALABROS
LARSEN & TOU
LGB FORGE
NAKODA TEXT
NCL RESEARCH
R T EXPORTS
RICHA IND
SANWAR AG OI
TTK PRESTIG
U G HOTELS R
UNI OFF AUTO

Today, Indian market is assumed to go down. Lot of selling would be done today to book profits. Market would end lower for the day.But L&T result, today, can cause a lot of recovery in the market. So timing would be important factor for today's trading.

The support for the Sensex is 11180 and the resistance to the up move is at 11761-12230

The support for the Nifty is at 3468 and the resistance to the up move is at 3620-3702-3751

As we assumed in morning, markets ended higher on account of buying in technology, pharma, realty, capital goods, few banking and telecom stocks. Midcap and small cap stocks too were on buyers' radar. Strong global cues were supportive to the markets. However, metal, few oil and power stocks were under pressure.
Benchmark indices had started on a strong note; the Sensex and Nifty had jumped over 500 points and 150 points respectively in early trade due to sharp rally in global markets. However, they lost more than half of their gains in the second half of the session on account of profit booking at higher levels and sell off was seen in metal stocks, but they didn't slip into the red and remained in the positive terrain throughout the day. Market ends with:

Sensex: 11483.40 ( +174.31 Points up)

Nifty : 3518.65 ( +27.95 Points up )

Market is sure to see downfall again, so guys i would suggest you to sell your shares with profit in this upward rally or invest for long period for atleast 1 year to gain a good amount of money. Remember guys, Our main aim is to book profits.

Today a very good day for Indian and Global market, Indian Market is assumed to see a lot of uptime today. Market would rise today. A lot of buying would be seen in market today.

BSE Sensex: (11309) our upward bias turned out to be a strong up move, capable of further upside from here. The support for the Sensex is 11000 and the resistance to the up move is at 11761-12230

Nifty : (3490) the support for the Nifty is at 3300 and the resistance to the up move is at 3620-3702-3751
Sensex would go up for short time, So guys you can encash your shares which you bought few days earlier (when i suggested you to buy shares).

Markets have witnessed a sharp pullback rally on the back of short covering and strong global cues, after a severe crash in the last week. Benchmark indices have broken five-day losing streak and ended on a strong note. The market ended with:

Sensex : 11332.23( +804.38 Points up)

Nifty : 3490.70 ( +210.75 Points up)

We assumed market by 11:00 a.m. when sensex was nearly +500 points and it crossed +800 Points according to our assumption. You guys might have made good profits by trading intraday. I and my team would always be with you at this critical phase of market, so guys , always stay connected.

As we discussed in the morning today indian market would see some relaxation and also will show some uptime. After Market started it bounced exceptionally as european market raise 5%. And by 10:30 A.M. market got fire by finance minister statement. Market Frontrunner was ICICI bank. The market is assumed to see highs today. And today sensex may reach +800 Points at some point of time.

Today There would be some relaxation in Indian Market. Both uptime and downtime would be seen in Market. The overall Market would be down or flat. You will get a good time to react, whether to go for shortselling or intraday....

So guys all the best for today's trading......

The growth of institutional investors in the market is having its own advantages as well as its own share of problems on the brighter side almost always purchase stocks on the basis of fundamentals. And this means that it is essential to have information to evaluate, so researchbecomes important and this leads to increasing demands on companies to become more transparent and more disclosures. This will lead to reduction in information asymmetries that plagued the Indian markets for quite a while. Also, the increasing presence of this class of investors leads to reform of securities trading and transaction systems, nurturing of securitiesbrokers, and liquid markets. If we see the numbers of FII flows, It is increasing every year :

On the flip side the increase of foreign investors in particular will bring a very welcome inflow of foreign capital, but there are always some dangers if certain limits are exceeded. Firstly, the foreign capital is free and unpredictable and is always on the look out of profits. Flls frequently move investments, and those swings can be expected to bringsevere price fluctuations resulting in increasing volatility. Here we analyze the comparative trend of sensex and FII, how it affected the market, Here the grey curve shows sensex indeces and black curve shows the FII cash flow, Here we can see how FII cash inflows increases the market indeces and cash outflows decreases the indian stock market indeces:

This is the way FII is supplimenting volatility in Indian market. This is what is happening in current scenerio. Also, increased investment from overseasmay shift control of domestic firms to foreign hands. Which showed us how the Indian market is interdependent on global markets like U.S., Europe and other asian markets. This was the same as happen in current scenerio, U.S. and other market meltdown slotted in direct impact on Indian market. The FII are taking out the money and the impact is shown on current Indian markets.

It's been the worst weekly performance for the markets. Today, the markets were very close to hitting the 10% circuit filter twice in the session, but pulled back off those lows. At one point, the Sensex was down over 1,000 points. The Reserve Bank was quick to step in with a 150 bps CRR cut, which includes a 50 CRR cut on October 6. But lower August Industrial Productivity numbers at 1.3% versus 10.9% YoY added to the pall of gloom. Even a lower inflation number at 11.80% and reassuring statements from Finance Minister P Chidambaram and Sebi Chairman CB Bhave failed to lift sentiment. The market finally closed with:

Sensex: 10,528 ( -800 points down )

Nifty: 3,280 ( -234 points down )

But guys, i think we made a good profit today by short selling, as we already assumed this situation in morning.

So guys, Stay connected with equitypandit.com and make profits even in this falling market.

Today market is assumed to go down sharply. Market would start at a big lows. Lot of buying was seen in U.S. and global markets. This time is really good for long term ( 6-12 months) investments.
Today the time to play at margins, but very carefully.

NEVER forget that what goes up, must come down and vice versa.

This rule, I believe is the cornerstone of a successful and contented life. A sudden rise in the stock indices may have you smiling. It's the slide that tests your real strength. I have seen may investor losing their money. But i would say that it is not the fault of the market, its your investment strategy that is faulty. Here, I would unveal few tips for better investment outputs.

Don’t panic: As i stated earlier, what goes up, must come down and what goes down must come up. I have seen many small investors start to panic when market comes down and sell their shares and stocks at lower rates. This is wrong strategy and the investors loose . I would suggest them to wait, until the stock rises. The market going down have to rise again.

Invest 60%: When market rises, I have seen many investors, invest all their money in the market. This is wrong strategy. Invest only 60% of your amount in market. Keep 40% of amount for bad situation. Never let yourself with shortage of cash.

Invest in business not in company: Don't invest only in big companies. To gain a good amount of profit, do your homework ( analysis ) about the small companies in the same business having ability to rise. Always their is the point of saturation in big companies. Remember, we invest to gain profit, not to put our amount in safe deposits.

Don’t be impatient: Don't react according to market. Make your own plans. Dont be impatient when market goes up or down. React according to your priorities.

Take calculative risk: People say, take risk in market. I dont say to take risk, rather take calculative risk. Before taking risk analyse the market and the company to invest for. Calculative risk always pays.

These are few tips ,by which you will always find yourself in a safer and Profitable side.