WINNING STROKES:THINK DIFFERENT:

[Updated at 2.44 p.m.]

Repo rate has been cut as expected and hence my recommendation of buying all banking counters came out to be correct once again. The bank stocks will now give fabulous returns going forward.

BUT WHAT IS LAMENTING IS THE THREE DEPATMENTS, THE SEBI, THE RBI OR THE FINANCE MINSTRY ARE VERY LATE IN TAKING DECISIONS. THESE THREE DEPARTMENTS HAVE TO SHED A LITTLE BIT OF THE FAT GENERATED OVER THE YEARS; TO FUNCTION WELL.

Of course a good point is that now more than 2 (two) lakh crores will enter in the system and the markets are expected to move up in IDEAL CONDITIONS.

BANKS ARE NOW FLUSH WITH FUNDS FOR LENDING THIS IS EXPECTED TO INFUSE GREATE DEAL OF LIQUIDITY IN THE SYSTEM....BUT ALL THESE IN IDEAL CONDITIONS........

Now SEBI has to BAN short selling for at least 7 days so that the Capital Maket gets stabilised. But today the reverse could happen, which means the markets could rise up in the late hours on the fear of SEBI banning short selling.

From Friday's Data of late afternoon it is evident that there are deliberate attempts to SHORT SELL by some entities. The way the markets came down HEAVILY at the late hours shows that shorts were being deliberately created to influence the markets and hence this kind of market manipulation should be stopped immediately to bring about some stability in the markets.

Now all that money market gyrations are complete with the cut in Repo Rate and SEBI has to ban short selling to give upward movements in the markets.

SEBI will ultimately BAN SHORT SELLING within the next 7 days, and this I can tell from my experience in the markets for the last 10---15 years...

Ofcourse the banking stocks are expected to do well in the days to come. Buy YES BANK Ltd at the CMP of Rs.79 for a target of over Rs.100 in the next 30 days time frame. The cut in the Repo rate will be very positive for the aggressive banks like Yes Bank Ltd.

Excepts of my Morning Mail to the Paid Groups:

Meanwhile, in a key change in its stance, the Securities and Exchange Board of India said it is keeping its options open on banning short sales, which a section of brokers believes are responsible for the collapsing stock market. The benchmark Bombay Stock Exchange Sensex fell below 10,000 Friday, the first time since July 2006. Clarifying the regulator's stand, a senior Sebi official told Business Standard, "We should not close the options available before us."

The regulator is studying the data before taking a final decision, the official said. This actually need of the hour because of massive shorts which are being created by HNIs, FIIs and some brokerage firms taking advantage of the current negative news flow are dragging the indices down everyday--systematically and in a planned manner. The way the market collapsed in the last hour on Friday is an indicative of that..... Short selling or "shorting" refers to the practice of selling shares that the seller does not own at the time of the sale with the intent of buying it later at a lower price. Short-sellers attempt to profit from expected decline in share prices.

The market regulator has so far maintained that there is no need to ban short selling, ignoring growing pressure from a section of brokers to do so. These brokers believe that a cartel is "shorting" to pull the market down at a time when Foreign Institutional Investors, under pressure in their home countries, have been sellinselling consistently since September 15, when Lehman Brothers, one of the largest investment banks in the US, filed for bankruptcy.

SEBI has also begun receiving data on short selling by foreign investors by borrowing shares through participatory notes (P-notes). The first set of data has proved that short selling has been taking place and the regulator has now asked for data before October 9, 2008..........................................