Analysis on Indian Stock Markets

Indian stock markets may continue their volatile runs with investors are hoping for correction. My advice for long term investors is stay away from markets for another month. Day traders and short-term investors may gain if they concentrated on good stocks like Reliance Capital.

Though stocks like Reliance Industries, Welspun Gujarat, Jindal Saw, Sail and JSW Steel are good stocks with strong fundamentals, they are near lifetime high values. I don’t prefer such stocks as there is a scope for little rise and high fall.

Why Indian share Markets will move upward?

1. Political uncertainty was over. UPA Government will complete its full term.
2. Inflation is under control. There may be no change in interest rates.
3. There may not be noticeable slow down in Indian economy.
4. Telecom sector is continuing its dream run.
5. There will be huge investments in capital goods and power sector.

Why Indian stock markets may move downwards?

1. Investors may book profits on the upside.
2. Real estate bubble may burst at any time.
3. High P/E of many blue chip stocks. Companies may not continue their dream run.
4. Foreign investors may move away from Indian markets.
5. Metal prices may fall at any time.

Hot stock picks and their movements:

1. Teledata:

Though it is a good long term bet, this stock is experiencing too many fluctuations. It may again touch 80-90 and then will fall to 50-60 mark within a short span.

2. Reliance Petro:

This is getting attention from institutional investors. It may touch 100-110 within 5-7 trading sessions and then fall back to 80-85 level.

3. IFCI:

This is a fundamentally sound stock with medium term bet. It may touch 60-65 and will return back to 50.

Sugar Stocks:

Stay away from this sector at least 4-6 months. Recent rise in these stocks lacks fundamental reason. Sugar prices are falling in open markets. This trend may continue in the upcoming 4-6 months.