Massive sell-off on Friday

Blog meant for 5 Feb 2018 Monday

Dear Friends,

As mentioned in the blog, markets had a huge fall on Friday. Markets fell massively by 256 points to close at 10760. The fall was mainly due to the new Long term capital gains tax introduced in the Budget and also very weak global cues in all global markets.

It looks there is more weakness in the markets on Monday too due to weak global cues.

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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-  YES BANK, HDFC, TCS, INFOSYS, HDFC BANK, ITC

DON’T BUY – HINDALCO, ASIAN PAINT

WAIT TO SELL – VEDANTA, M&M

SELL –AXIS BANK,RELIANCE INDUSTRIES,

DON’T BUY – SBI, TITAN, MARUTI

There are no fresh buy indications for short term.

Due to the massive fall, many of the bluechip companies have fallen, thereby giving us opportunity to buy for long term. Do not get worried because of the weakness. Since markets had a dream run in 2017, it could be the much needed consolidation that was required.

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Question of the day –

I have invested in Orient Paper shares 2 months back and the shares have fallen a lot and now I am in loss. What to do now? Should I hold and hope for recovery or sell?

Answer –

We have been stating in our blog and in our Workshops to invest only in selected bluechip stocks of leading companies. Inspite of this, many of our participants have been investing with great over-confidence in all kinds of companies which have no fundamentals and profitability. When markets are having a good time, all stocks do well. But when markets are falling, only the bluechips are somewhat stable and the smaller, unknown companies massively fall.

Only stick to bluechips companies and do not ‘experiment’ with smaller companies which your friends or other people tell you. Also, ignore all SMS, emails that you receive asking you to buy certain unknown companies.

Have self discipline and patience in Stock Markets and more importantly have the discipline to invest in only 5-6 bluechip companies for long term.

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All the best!

Dr.Bharath Chandra and Rohan

Please do not comment on the blog. Any questions or clarifications can be asked by sending us an email with your registration number given to you during the Workshop. Questions without quoting registration number will not be answered.

(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)