10500 level touched by Nifty

Dear Friends

Nifty went up by 53 points on Friday to close 10493. It touched the 10500 mark for a few seconds before it went down below the mark. Global cues were negative in Europe and US on Friday evening before the long weekend for Christmas.

The next working day for markets is 26 Dec (Tue)

The analysis for Short term as per technical analysis is as follows:

Nifty is in Hold zone. The indications for individual stocks are –

THE HOLDS ARE- MARUTI, INFOSYS, TITAN, HDFC BANK, ITC, VEDANTA, HINDALCO, HDFC, AXIS BANK,

THE DON’T BUYS ARE – ASIAN PAINT

JUST BUY – RELIANCE (Buy if you have risk appetite)

WAIT TO SELL – YES BANK

WAIT TO BUY – TCS, SBI,

HOLD – M&M (Since M&M issued bonus shares on Thursday and hence the price adjusted for the bonus, we had mentioned as Sell to be on safer side. Now that the graph has been adjusted for the new price, it is showing Hold. If you have not sold M&M, you can hold it until Sell indication arises. If already sold, then do not Buy freshly)

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Government rules instruct share brokers to transfer any unused balance in trading account at the end of every quarter to the investor’s bank account. Hence, at the end of every March, June, September & December, if there is some cash balance in the account, it will automatically get credited to your savings account unless you utilise the funds for purchase of some instruments or shares.

Hence, in future, you have two choices:

1. Instruct the broker to let the idle money get credited to your bank account.

2. Buy some shares if you want to with the balance

Brokers may also suggest that they can buy some liquid mutual funds or similar instruments to ensure that balance does not get transferred to your bank account since it is a hassle for many investors to re-transfer the funds to trading account to purchase shares in future.

This purchase of liquid funds or similar instruments may result in a transaction cost of Rs.10-20 which is quite reasonable. The fund can be sold anytime and the proceeds will get credited to your trading account.

Suppose, Mr.A had Rs.14500 in Dec end in his trading account, he can:

1. Tell broker to transfer money to savings account

2. Buy shares partially or fully with the balance available

3. Instruct broker to buy liquid funds (usually Liquid Bees) and can sell it once the quarter has ended. After the sale, the same 14,500 minus some minor transaction charges will be re-credited to your trading account.

Hence, please understand the above and decide accordingly.

Remember that when an investor is aware of how the things around him/her work, then he/she is in a better situation to take good decisions and nobody can misguide.

All the best!

Dr Bharath Chandra and Rohan

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(The above comments are only the personal views of the authors of this blog. Please do your own research before taking any investment decisions. The reader of this blog must understand and take full responsibility for the Profit or Loss made by taking actions based on the above views)