All time high for Nifty!!

Blog meant for 11 May 2017 Thursday

Dear friends,

Good rally for markets today to push Nifty above the 9400 mark for the first time in its history and today’s close of 9407 is a record high. In the last 4-5 months itself, Nifty has gone up by around 15% and many individual stocks are at 52 week high and some are life time highs.

Although, this is a good news for investors and overall markets, I urge investors to have a balanced view of the current situation. Let us not get too carried away or over enthusiastic / greedy of the markets nor should we be too pessimistic or fearful of the markets when it is falling or it is at a low level.

It is only when investors behave in extreme manners do they become too emotional and make investment decisions without sound thinking. Just because all stocks are going up in such situations, many investors forget the important principles of buying only good quality companies and buy all sorts of companies. If and when the markets fall, they may then realise the mistake of compromising on quality of the companies they have bought.

Stick to bluechips for long term and continue monthly investments since we must all realise that markets do not go up forever nor do they go down forever. But over a long period of 10-20 years, good companies would definitely give good or satisfactory returns.

As per 30 days moving average, Nifty is in Hold zone.
The indications for short term for individual stocks are as follows –

THE HOLDS ARE – L&T, HDFC BANK, MARUTI, ASIAN PAINT, M&M, SBI, AXIS BANK, BHEL, ONGC, HDFC

Buy – Titan (It has once again entered Buy zone)

Just Buy – DIVISLAB (It has just crossed the red line. Buy if you have good risk appetite).

Wait to Buy – Reliance

Don’t Buy –  INFOSYS, LUPIN, ITC, TCS

Like always, short term trading is for people who have some risk appetite. Having risk appetite means having the ability to bear small losses in the short term if the stock does not appreciate as per your expectations in short term.

For example, if you have kept Rs.1 lakh for short term trades only, then, you must be ready to bear around Rs.3000-5000 loss at times, hoping that when you make short term profits of higher amounts, these small losses will be covered up.

If you are not willing or do not have the capacity to bear small losses in short term trading, then you can avoid short term trades and only invest for long term on a regular basis to make good wealth for your future.

All the best!

Dr.Bharath Chandra