WINNING STROKES: THINK DIFFERENT:

My recommended Relaxo Footwear Ltd recommended last year around Rs.39-47, touched Rs.381.45 yesterday, giving almost 8-9 times return in one year. The stock yesterday closed in the positive even as the markets tanked by more than 200 points. 

In another development, Ambalal Sarabhai Enterprise Ltd, is appointing an advocate as the director to quell the workers' strike in the main plant (at Baroda), in the shortest possible time. The scrip closed in the positive with good volumes.

Energy Development Ltd also closed in the positive yesterday, with good volumes. There were some very good developments in the company in the last few months, with the company announcing a series of orders. 

ANALYSIS:

Even as the government went in for oil decontrol, the Indian Stock market closed in negative territory, yesterday. 

What is heartening is to see that GOI has not touched Kerosene as it is thought as the much essential commodity for the poor.     

The rise in oil prices  will definitely add pressure on inflation in the next few weeks and hence market reacted today negatively yesterday, though global factors also has their effect. 

To tame the inflation monster RBI may act to tweak the current interest rate scenario. If this happens then the markets could tank further and stand somewhere at 5150, in case of Nifty. 

U.S. stocks plummeted yesterday (Tuesday), sending the Standard & Poor’s 500 Index to its lowest level since October, 30, on concern over weakening growth in China and a slump in American consumer confidence. China’s exports is expected to face “strong headwinds” in the second half of the year from policy tightening measures and the European debt crisis, according to some experts. Now world seems to be too much dependent on Chinese Engine for growth or the whole world is looking to replace US engine with the  Chinese ones. But then too much expectation from China will only bring disappointmements.

Back Home, lot of goodies have come, in the last few weeks. With record amount of money generated from auctions earlier and now another Rs.40, 000 Cr expected to come from PSU stake sell, the GOI’s kitty has swelled to around 150000 Cr. This is a large amount for economies like India and would help in brining down the fiscal deficits to less than 3% in the next 12-18 months time frame. 

Moreover, reforms coming in the field of Fertilizer and Oil Marketing companies are expected to give less sleepless nights to our Finance Minister. In the infrastructure space also, lot of developmental works are going on. 

With so many development and with the expected reduction of Fiscal deficits in the next few months, the FIIs could pump in money into Indian bourses. 

With the inflow of money hitting the Indian shores, it would not be difficult for the Sensex to cross 5400 in the next few days and head towards 5800-6000—7000 mark. Considering a 5-year cycle, the markets are likely to peak out in 2012-1013 and that is not too far away. 

Now, with the Indian GDP growth likely to continue, reduced fiscal deficit could lure more and more FII money into India. If you compare today’s scenario with what happened in 2000-2003 period then we would find that, the markets started to rise the day US attacked Iraq and quicky crossed 5000 in matter of a couple of years. The same thing is likely to be repeated this time also. 

But a couple of days back, some disturbing statement coming from none other than Paul Krugman, which stunned the financial world, he said, “We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost, to the world economy and, above all, to the millions of lives blighted by the absence of jobs, will nonetheless be immense”. This also had an effect on yesterday’s market with a brokerage house coming out with a sell on Nifty. 

But then MF chief Dominique Strauss-Kahn on Tuesday ruled out the immediate prospect of a double-dip recession scuttling the fragile global economic recovery, despite various risks.  He said, “The recovery will go on without a double dip," to a forum hosted by the Peterson Institute for International Economics in Washington. 

Global markets went into a tailspin Tuesday as sagging American consumer confidence, weak Chinese economic indicators and European financial problems renewed fears the global economic recovery may falter.  The United States and many other key economies plunged into the worst recession in decades following an American home mortage meltdown that triggered a financial crisis.  

In the Indian markets the returns from A-group will be comparatively slower now or taper-off now, as compared to B-group.  

Hence herein lies the cream of the entire stock market story. The selling is A-group has started by the operators to take position in the B-group.  A couple of days back, I mentioned that the much expected rally in the B-group has started. Hence if one blocks ones margin in A-group then one will miss the opportunity to cash in on the B-group story, which is more prominent now in case of many scrips. It needs no  introduction to mention that B-group, B-group rally is always sharp and power. It is here quick money is made by the punters and traders.

Yesterday, even as the markets fell much deeper, some of my earlier recommended counters like Ambalal Sarabhai Enterprise Ltd, Energy Development Company Ltd, Relaxo Footwear Ltd (Recommended at around Rs.39-48 last year, can you believe), etc. did well. Reliance Mediaworks Ltd made new weekly high yesterday at it touched Rs.235. 

Therefore buy my recommended counters and hold the scrips for some time to get good return. Buy now and never regret later.....!!