Market Outlook (14/01/2008)

Hi Friends
The markets are neglecting all the weak cues and moving very volatile. The volatility is expected to continue for this week as well and would suggest investors to avoid day trading and swing trading for some time and wait for the right time to enter the markets. As far as the mid cap/small caps are concerned I beleive that the profit booking phase in some of the counters should be over and we can enter some good quality stocks in the days to come. I have a list of stocks which I feel would be multibaggers in days to come and we have a great opportunity to take them into our portfolio in this profit booking phase. I wont recommned those stocks right now because of the huge volatility the stocks like all other mid cap and small caps could well go for a lower circuit due to profit booking and a fear amidst investors about a BIG FALL in the markets. As of now all our recommendations have been SUPER HIT and all were Investment Calls. The call given on COMPACT DISC last week remains a BUY at every decline ( AS I HAD ALREADY MENTIONED IN THE BLOG THAT PLEASE BUY IN SMALL QTY DUE TO VOLATILE MARKET CONDITION). I got many queries regarding the stock and hence I am refraining my self from giving some other Investment based ideas for the time being because there are very high possibilities that the stock might go down for the coming few days because of the mid cap and small cap index lossing some steam due to profit booking. hencforth I advice everybody not to indulge into fresh buying at this point of time. I have in my mind a few stocks which I feel can start moving up in a very short period from now but would wait for some time for the market to stablize and then recommend it to all here.
This was the week where apart from the BANKEX all other sectorial indices lost by more then 2% BUT STILL the sensex closed 140 points above the previous weeks close of 20686.89. Almost all the world indices were down more then 2% but Sensex was up by 0.67% for the week ended. This confirms that there are few stocks which are moving the index right now (R-PACKS basically) and they are even when the world indices are closing in red we are able to recover. These are few things which worries me as an analyst as well as an investor. The Nifty might make new highs again on the built in euphoria about the DEVELOPING MARKETS, ECONOMIC POWERHOUSE etc etc but still we would advice a CAUTIOS approach and PLAY SAFE.
According to me nobody is really paying any attention towards business fundamentals, valuations (which I feel are over streched) and looking TOO FAR ahead projecting income estimates of FY09-FY10 and even FY 2011. I see companies trading at 70-80 times there forward earnings which I am not comfortable with and feel that these projections of forward earning estimates would come down heavily when the markets realise this and that day we could be taken for surprise ride.
MARK MY WORDS-- THE MID CAP/SMALL CAP STOCKS WHICH HAS TAKEN A BEATING IN THE LAST WEEK WOULD SOON SEE RECOVERY AND WE WILL GIVE YOU SOME STOCKS FOR DELIVERY IN THAT PERIOD. (AS OF NOW WE WOULD AVOID BECAUSE IF THE STOCK GOES DOWN FOR A DAY OR TWO SMALL INVESTORS DO GET JITTERY AND START PANICING)
HAVE AN EYE ON RELIANCE INDUSTRIES... RESULTS COMING SOON...
TODAY (14/08/2007) THE MARKETS WILL OPEN WITH A NEGATIVE GAP AND WE WILL SEE SOME BUYING COMING AT LOWER LEVEL--

Happy Investing
Investomaniac
JAIDADIKI