What to Expect

As a premarket check , the SGX Nifty October 2008 is around 63 pts up @ 9.30 am IST and SGX Nifty Nov 08 seris is up by 108 pts at the same time. This shows the market may open up by around 100 to 150 points (Sensex) up in the opening and the trend may change around 12.30 pm IST when European markets open.

In the stock specific ICICI Bank says there is no need of panic, and their Capital Adequacy Ratio at 13% where it is required only 9% as per RBI norms. ICICI Bank CEO Kamath also clarified the same along with RBI and FM.

As we have written earlier the market may find the bottom in the comming days. Longterm investor can start buying shares in the battered frontline stocks in the mid cap segment like Hindalco, Indian Hotels and Allahabad Bank. In large cap RIL and L& T looks better.

The short-term outlook remains weak in spite of the fear of a recovery. Traders need to sell and identify sell opportunities irrespective of the stop loss violation. The only problem is the gap down opening, which does not offer scope to trade for day traders. Traders, who can risk more and roll the trades can benefit. This means that only a handful of traders can take advantage. All others will be left watching the match from the pavilion.

Long-term investors who have the liquidity and holding capacity and do not get worked up by short-term underperformance and who don’t follow the market on a daily basis, will get an opportunity to accumulate in low volumes in a staggered way. There is a ‘Sale’ in equity markets and buyers have the choice to accumulate stocks at attractive prices. The lower level of 8800 would be ideal for investors with long-term horizon to accumulate in a staggered manner. Since traders cannot adopt this strategy, they must follow the price and trade with the trend.

Happy Trading