morning thoughts...
The markets reacted from resistance zones and saw a sell in the last hour of trade trapping longs for intraday trade.
Technically not much has been affected on charts and volatility is likely to continue in coming sessions.
However , midcaps on an average are trading at 40% higher valuations as compared to the benchmark indices; smallcaps trade at a premium of about a fourth.
"It is evident that there is a solid bull rally in the smallcap space.
We have no doubt that many smallcap companies are geared to grow at a solid clip in the coming years. The optimism in the valuations is a reflection of the expected turnaround in the Indian economy. But investors should not go overboard as smallcaps tend to be highly risky. There are these four things you should never forget while investing in smallcaps. 1) Look for companies with sustainable business models; 2) For companies with strong fundamentals, it may sometimes make sense to pay a slight premium. But as a thumb rule, don't overpay. 3) Invest for the long term. Don't be swayed by short term price swings. Smallcaps are a pretty volatile lot. 4) Asset allocation is the key. Don't overexpose yourself to a single smallcap stock."
We would like to emphasize on the last point. Asset allocation is key in such markets and we believe rebalancing one's portfolio would be key to ensure one does not have too much exposure to a particular stock. A quick gauge at the risk reward ratios should help in identifying the stocks that need trimming in case they have shot up in this bullrun.
Coming to the commodity markets bullions , base metals and energy looks negative in the coming session.
Yesterday's calls sent
Nifty - buy at cmp 8847 sl 8825 tar 8900 - hit sl
Convert 10k into 30k Tata comm 480 ca - buy at cmp 11 sl 8 tar 25 - went 33
Century 760 pa - buy at cmp 23 sl 20 targets 35 - went 37
Axis bank - buy at cmp 567 sl 564 tar 578 - hit sl
Zee - buy at cmp 347 sl 345 tar 355 - hit sl
Upl - sell at cmp 480 sl 485 tar 460 - went 458
Hdil - sell at cmp 138.50 sl 140 tar 135 - went 133
Copper Mcx - sell at cmp 373 sl 374.50 tar 368 - booked at 369.20
Silver Mcx - sell at cmp 36315 sl 36400 targets 36000 - booked at 36077
The markets reacted from resistance zones and saw a sell in the last hour of trade trapping longs for intraday trade.
Technically not much has been affected on charts and volatility is likely to continue in coming sessions.
However , midcaps on an average are trading at 40% higher valuations as compared to the benchmark indices; smallcaps trade at a premium of about a fourth.
"It is evident that there is a solid bull rally in the smallcap space.
We have no doubt that many smallcap companies are geared to grow at a solid clip in the coming years. The optimism in the valuations is a reflection of the expected turnaround in the Indian economy. But investors should not go overboard as smallcaps tend to be highly risky. There are these four things you should never forget while investing in smallcaps. 1) Look for companies with sustainable business models; 2) For companies with strong fundamentals, it may sometimes make sense to pay a slight premium. But as a thumb rule, don't overpay. 3) Invest for the long term. Don't be swayed by short term price swings. Smallcaps are a pretty volatile lot. 4) Asset allocation is the key. Don't overexpose yourself to a single smallcap stock."
We would like to emphasize on the last point. Asset allocation is key in such markets and we believe rebalancing one's portfolio would be key to ensure one does not have too much exposure to a particular stock. A quick gauge at the risk reward ratios should help in identifying the stocks that need trimming in case they have shot up in this bullrun.
Coming to the commodity markets bullions , base metals and energy looks negative in the coming session.
Yesterday's calls sent
Nifty - buy at cmp 8847 sl 8825 tar 8900 - hit sl
Convert 10k into 30k Tata comm 480 ca - buy at cmp 11 sl 8 tar 25 - went 33
Century 760 pa - buy at cmp 23 sl 20 targets 35 - went 37
Axis bank - buy at cmp 567 sl 564 tar 578 - hit sl
Zee - buy at cmp 347 sl 345 tar 355 - hit sl
Upl - sell at cmp 480 sl 485 tar 460 - went 458
Hdil - sell at cmp 138.50 sl 140 tar 135 - went 133
Copper Mcx - sell at cmp 373 sl 374.50 tar 368 - booked at 369.20
Silver Mcx - sell at cmp 36315 sl 36400 targets 36000 - booked at 36077
