Stock Market analysis for FY19 or 2018

Stock market analysis

In last few days, market had seen some interesting buying which remained only for 2 days. This buying helped Nifty to climb from lows of 10200 to almost 10450. However, now nifty is consolidating around 10400.

Bearish or Bullish!

As per media reports, past few days has brought many views of many analyst and experts on stock market. Some are in favour that stock market is in consolidation and will see the comeback soon. While on the other hand, some experts are in favour that market is trading at a very risky level and may face another 10-20 percent fall from current levels. The reason they have suggested behind expected 10 fall includes Problem of NPA for Banking sector, Power sector and telecom. All these three are suffering from NPA issue or overload of Debt on Balance sheet.

Negativity in Power, Telecom and Banking sector

If we take a look on charts of these three sectors, we will find that none of them have performed well in last four years. However, it is possible that we would discover negative returns given by many power, telecom and Banking stocks. For any Developing country, these three are considered as very important because they are the real backbone of any Developed country.

Meanwhile, it is also true that there are many other sectors which have seen a long and consistent buying. Like Auto sector where most of the stocks have outperform the overall market gains in last four years. IT sector is another outperformer which has started its rally in recent time.

Another thing which is important to note in current market is that FIIs are now continuously selling in our market after January end. It may largely possible due to LTCG Tax came in 2018 Budget. However, DIIs have supported our market from FIIs selling by inflowing great amount of money in Stock market. A large portion of money coming from DIIs mostly includes of Mutual Fund which are on a good rise.

At current levels, it is very difficult to predict any maximum downside level for markets. Because Elections are coming and any failure of BJP in election may result in a huge selling pressure.

 

Few positivity in market still present!

On the positive note, is also possible that Markets may see a good recovery and further buying soon because once the problem of NPA will come down to Normal level, PSU banks would able to again lead the Indian Economy and contribute to it in a good way. And perhaps, if we have better Credit facilities in our nation, we will be able to grow much faster. And for Stock market, better Credit facilities will generate a huge value for Investors because their companies will then have a better business finance options in Domestic market. As of now, NBFCs are controlling most of the businesses which are operational under Banks also

Therefore, if I had to say in one line, if we soon resolve this NPA issue, we could see a great buying in overall markets which will last for long-term. So, don’t think that current NPA and Debt problem which has affected most of the sectors is a long-term issue. Once, the better Credit Facilities, transparent and easy procedures for getting loans and returning them would be there for Industries, stock market will definitely see some great and long rally.

Be stock specific and invest in high potential stocks!

One more thing I would like to remind all the investors and traders is that they should now try to invest in those stocks where Potential upside is bigger and Downside is very limited. And if you are going to invest in a company for long-term, please become familiar with it. For this, try to understand the corporate history and Business Risks of the company where you are going to invest.

In our stock market, there are numerous cases teaches us many things. In case of PC Jewellery when it had gone very deep on that day when the Vakrangee Relationship came in front of public after Price manipulation news of Vakrangee shares, the stock had taken a deep cut of more than 60 percent in a single trading session. But same day, positive clarification by Board Of PC Jeweller helped the stock to recover most of the lost market capital. Those who had made a buy position around Rs 230 and had taken a exit on the same day around Rs 350 would now be sitting on a bug profit.

There are many other stocks like JP Associate where Investors had loose many of their money in last 5-10 years. But in last one year, most of the traders have earned a lot of money from Stock. From last few months, stock is in a strong range bound. In lower levels, stock is always taking a support from around Rs 14-15 most of the times. Whereas in higher side, strong resistance lies around Rs 20 which has been broken only once during December after massive rally of JhunJhunwala Buying. So, traders who are using this range bound for entering around Rs 15 and taking a exit around Rs 20 will also be sitting on a huge profit.

Although, i just want say that please try to invest for short-term only in those stocks where Risk-reward ratio is favourable and Potential upside is in good amount. And for discovering such high potential stocks, stay connected to our blog.

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One thought on “Stock Market analysis for FY19 or 2018

  • October 4, 2018 at 8:00 am
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    I’m not sure exactly why but this site is loading incredibly slow for me.
    Is anyone else having this problem or is it a problem on my end?
    I’ll check back later and see if the problem still exists.

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