Wednesday, December 31, 2008

>Nifty Outlook for First Quarter 2009

2008 would be an year which will be well remembered by investors in the Indian Market. An unprecedented fall of 65% from the peak achieved in Jan2008 would have ruined the portfolios of most market participants who did not recognize the Bear Market in time. As we end 2008, there is very little cheer for investors as we head into 2009.

2009 would in general be a repeat of 2008, as the price destruction has already been of a large magnitude, a repeat of 2008 price performance of the same order might not happen, although I believe that price fall in 2009 could also be large . The Bear market is likely to continue right through the Year in more or less the same fashion as in 2008. There have been several fundamental optimists who believe that the economy would bottom sometime later this year and are expecting a market bottom in the first quarter. The answer to this is simple, the bear market has very many months and quarters to go. I believe this would be the worst bear market that we might witness in living memory. Its quite likely that several investment methods and tools which have been usually been deployed to explain markets and its behavior over many years would get rewritten after this Bear Market is done.

The Silver lining for 2009, i believe would be a few counter trend bear market rallies which might offer good returns for whose who are nimble footed and can enter and exit market without any fundamental bias. In 2008 there were 3 major rallies March-April, July-Aug and Nov-Dec. All of these rallies produced about 22 to 25% return on the nifty. 2009 might offer more counter trend rallies than we saw in 2008, with a couple of them of a larger magnitude than we witnessed in 2008. I am not too sure if the bottom of this Bear Market is going to be produced in 2009.

As far as the First Quarter goes, its going to be a two way market, this is how i see the broad Trends in the first 3 months:

Jan1st-Middle Jan - Down

Mid Jan - End Jan- Up

End Jan-Mid Feb- Dn

Mid Feb - Early March- Up

Early March - 3rd Week March - Dn

3rd Week March - Early April - Up

On a rough calculation i find that the number of Up days and Down days are more or less the same in the period between Jan-March. However being a Bear Market, down tick produces larger swings than the uptick, would presume that there could be a net loss of 400-700 Points in this period. As the nifty is closer to 3000 as of date, i would presume that nifty should be trading in the 2300-2600 price zone as we end the first quarter. Of these swings, i estimate the first swing in Feb might probably be a bad one , sometime of a repeat of Nifty swing between 23/9/08 to 10/10/08.

The ability to trade the market turns correctly both ways would determine the returns you can produce in this period. The moot question is, in what range could the nifty trade in this period. The answer to this would depend on where the market lands up in the upswing from Mid Jan to End Jan. With current price Structure i would estimate a swing to 3250-3300 price zone. I was initially looking at a higher swing to 3800 by End Jan, however the price swing in Dec has been lower been lower than my expectations, it appears that downside swings are more prominent than the upside potential. The Upswing to End Jan might well be the last chance to exit investment positions, i presume this could be the high for 2009. The subsequent upswings are likely to produce lower tops.

There have been 2 Major Down pivots in 2008 - 2250 made on 27/10 and 2500 made on 20/11 and the up pivot at 3240 on 5/11. My estimate right now gives me a range of 3250-3300 on the upside and 2250-2500 on the downside. The potential for a break of 2250 would depend on the price behaviour in the month of Feb. I must add that the Nifty price structure on the weekly charts are not as good as its Asian Peers.

Would 2250 be the Bear Market lows as lot of optimists believe - This level would be broken sometime in the first half of 2008. It remains to be seen if this level would be broken in the first quarter, a lot depends on the price swing in Feb. If the price fall is somewhat of the same degree as it happened in Sept-Oct, it opens up the possibility of a major low in March.

How about the World Markets mainly the Dow - Dow made an important bottom on 29th (remember it made a top on 8/12) and is likely to rally till 3rd week of Jan. If you recall my earlier posts on this, i had a target of S&P 1000 for this pullback and i believe its likely to go there. Its dn till last week of march and i suspect newer lows might happen in that fall.

There is only caveat to this outlook - If there are any military disturbances in this period, the price performance might get affected during that period.

The only exception to the Bear Market in all asset classes is likely to be the yellow metal, i think it headed for a super cycle in 2009-2010.

As a final comment, i would add that comparisons between this bear market and the past ones are irrelevant. There is no symmetry with time, hence each bear market would have its own character and trying to make judgments based on the price patterns of the past can prove to be dangerous.


Deepak Narayanan

Writer is a trader who uses price-time geometry to analyze markets.

Comments invited...


Tuesday, December 30, 2008


533029Alkali Metals LimitedMavi Investment Fund Ltd--S1747131.712879522.82
500425Ambuja Cements Ltd.B L Taparia22/12/2008 - 23/12/2008S30000
519383Anik Industries LimitedNeha Shahra10/11/2008 - 28/11/2008B145300.05145300.05
508136B & A Ltd.Hemendra Prasad Barooah22/12/2008B4350
531937Beckons Industries Ltd.Mr. Jasjot Singh16/12/2008 - 19/12/2008B6889
532330Biopac India Corporation LtdPankaj B Doshi23/12/2008B2000
532548Century Plyboards (India) Ltd.Brij Bhushan Agarwal.23/12/2008S60000
531977Chartered Logistics LtdLalit Kumar Gandhi24/12/2008B5800000.0079170016.01
531977Chartered Logistics LtdChartered Capital and Investment Ltd--S58000011.35--
530871Chembond Chemicals Ltd.Visan Holdings & Financial Ser Pvt Ltd.23/12/2008B376
512018CNI Research LtdK P Ostwal - HUF24/12/2008B1000000.331702500.56
532339Compucom Software Lt.Compucom Technologies Pvt Ltd.--B100000.03263453610.48
500096Dabur India Ltd.Mr. Rajan Varma16/12/2008 - 23/12/2008S7250
511072Dewan Housing Finance Corpn. Ltd.,Wadhawan Holdings Pvt Ltd23/12/2008 - 24/12/2008B2959
511072Dewan Housing Finance Corpn. Ltd.,Wadhawan Holdins Pvt Ltd19/12/2008B125070.0239750966.57
511072Dewan Housing Finance Corpn. Ltd.,Wadhawan Holdings Pvt Ltd22/12/2008B166300.0339917266.60
532868DLF LIMITEDPraveen Kumar19/12/2008S30000
500246Envair Electrodyne Ltd.Mr. Shripad Mirashi26/12/2008B4000.01155942251.29
526227Filatex India Ltd.Nouvelle Securities Ltd22/12/2008 - 24/12/2008B30160
500202India Lease Devl. Ltd.,MGF Services Ltd.24/12/2008B3301
532976Jai Balaji Industries LimitedJai Salasar Balaji Industries Pvt Ltd.24/12/2008B404760.0918688203.97
530405Jindal Capital Ltd.Sarita Agarwal.26/12/2008B15220
532741Kamdhenu Ispat LimitedKamdhenu Overseas Ltd24/12/2008B198190.11223297911.75
532942KNR Constructions LimitedK Narasimha Reddy23/12/2008 - 26/12/2008B22032
512559Kohinoor Foods LtdTemptation Foods Ltd.19/12/2008B2000000.75318064811.98
500247Kotak Mahindra Bank Ltd.Vyomesh D Kapasi18/12/2008S1500
500247Kotak Mahindra Bank Ltd.Mr. KVS Manian22/12/2008 - 23/12/2008S20000
500247Kotak Mahindra Bank Ltd.Ms. Oisharya Das18/12/2008S10000
523323Kovai Medical Center & Hospital LtdDr. Thavamani Devi Palaniswami15/12/2008B21000.02134938512.33
516007Mangalam Timber Products Ltd.,Smt. Vidula Jalan.23/12/2008B1297
532469Mather & Platt Pumps Ltd.Wilo Se.--B4513004.89832268590.17
532819MindTree LimitedJanakiraman S22/12/2008 - 23/12/2008S5100
526642Mirza International LimitedIrshad Mirza11/12/2008 - 19/12/2008B151126
501343Motor & General Finance (M.G.F.) LtMGF Services Ltd.--B229890.113743671.93
500294Nagarjuna Construction Co. Ltd.,AVSR Holdings Pvt Ltd01/12/2008B12000
531157Organic Coatings Ltd.Rajnikant K Shah19/12/2008B22000.0375265011.27
500315Oriental Bank Of CommerceThe Childrens Invest. Master Fund19/12/2008S49230001.97164308526.56
531120Patel Engineering LtdPraham India Pvt Ltd18/12/2008B2000
531120Patel Engineering LtdMs. Sonal Patel24/12/2008B2000
530695Prime Property Development Corporation Ltd.Padamshi L Soni22/12/2008 - 24/12/2008B14499
532106Rei Agro Ltd.Aspective Vanijya Pvt Ltd10/12/2008 - 18/12/2008B32284
532793Shree Ashtavinayak Cine Vision LtdDahlia Traders Pvt Ltd24/12/2008B199000.19342872732.72
521034Soma Textile & Industries LtdAjit Singh Chawla03/12/2008 - 08/12/2008S550000.17508100.15
521034Soma Textile & Industries LtdAjit Singh Chawla -HUF03/12/2008 - 08/12/2008B550000.1716243814.92
532833SPARSH BPO SERVICES LIMITEDMr. Kapil Puri22/12/2008 - 23/12/2008B3200
532874Suryachakra Power Corporation Ltd.Mrs. M. Mangatayaru22/12/2008 - 24/12/2008B13600
531426Tamil Nadu Newsprint And Papers LtdReliance Growth Fund19/12/2008B150000.0249674807.17
500148Uflex LimitedAnshika Consultants Pvt Ltd.23/12/2008B686
500148Uflex LimitedFlex International Pvt. Ltd.24/12/2008B83
526879UT Ltd.Smt. Vandana Khaitan19/12/2008 - 23/12/2008B6268
532953V-Guard Industries Ltd.Kochouseph Chittilappilly16/12/2008B4145
532824Vijayeswari Textiles Ltd.Seshraj Enterprises Pvt Ltd23/12/2008B325000.17709266239.03
532824Vijayeswari Textiles Ltd.Seshraj Enterprises Pvt Ltd22/12/2008B230000.12706016238.86
511333VLS Finance LimitedM.P. Mehrotra (HUF)26/12/2008B35000.014908251.23
511333VLS Finance LimitedM.P. Mehrotra (HUF)24/12/2008B66000.024873251.22
B - Buy
S - Sale


Monday, December 29, 2008

>INSIDE TRADING 29-12-2008

515055Anant Raj Industries Ltd.,Shri Ashok Sarin22/12/2008 - 23/12/2008B6337
531881Arvind Chemicals ltd.Newage Vinimay Pvt Ltd & Others23/12/2008B501750.25224833311.35
508136B & A Ltd.Hemendra Prasad Barooah24/12/2008B1730
500039Banco Products (India) Ltd.,Mr. Mehul K. Patel23/12/2008B7089
522261Dolphin Offshore Enterprises (India) ltd.Mr. Navpreet Singh24/12/2008B32
522261Dolphin Offshore Enterprises (India) ltd.Dolphin Offshore Projects Ltd23/12/2008 - 24/12/2008B831
532751EASUN REYROLLE LTD.Mr. Raj H. Eswaran21/12/2008B2344071.132344071.13
532984Enso Secutrack LtdCorporate Strategies Pvt Ltd.22/12/2008 - 23/12/2008S750000.677050006.31
500144Finolex Cables Ltd.,Shri Atul C Choksey22/12/2008 - 23/12/2008S155000.01--
500144Finolex Cables Ltd.,Shri Atul Choksey- HUF22/12/2008 - 23/12/2008S2250
500144Finolex Cables Ltd.,Smt. Parul Atul Choksey22/12/2008 - 23/12/2008S6000
532996FIRST WINNER INDUSTRIES LTDReal Marketing Pvt Ltd.19/12/2008B1700000.9510538695.94
532345Gati LimitedMahendra Kumar Agarwal24/12/2008B41000
532754GMR Infrastructure LimitedGMR Holdings Pvt Ltd19/12/2008 - 23/12/2008B16600000.09134812621074.04
522217Gujarat Apollo Industries Ltd.ICICI Prudential Mutual Fund15/12/2008S711570.685101704.86
517271HBL Power Systems Ltd.A. J. Prasad17/12/2008 - 18/12/2008B41000.0219224417.92
531524I.C.S.A. (India) Ltd.G Bala Reddy24/12/2008B50000
532976Jai Balaji Industries LimitedJai Salasar Balaji Industries Pvt Ltd.22/12/2008B486000.1017810863.78
532976Jai Balaji Industries LimitedJai Salasar Balaji Industries Pvt Ltd.23/12/2008B472580.1018283443.88
532617Jet Airways (India) LtdBaytree Investments(Mauritius) Pte Ltd22/12/2008S1250000.1525328182.93
500380JK Lakshmi Cement LimitedBengal & Assam Co. Ltd.--B989739816.181453655823.76
532162JK Paper Ltd.Bengal & Assam Co. Ltd.--B1424240718.221434440718.35
530007JK Tyre & Industries Ltd.Bengal & Assam Company Ltd.--B812414619.80843425020.55
502937Kesoram Industries LtdSmt. Manjushree Khaitan19/12/2008B75
516007Mangalam Timber Products Ltd.,Smt. Vidula Jalan.22/12/2008B6129
532819MindTree LimitedLSO Investments Pvt Ltd18/12/2008 - 19/12/2008S69000
532819MindTree LimitedRostow Ravanan17/12/2008 - 19/12/2008S17249
532819MindTree LimitedSubroto Bagchi17/12/2008S2000
532819MindTree LimitedJanakiraman S17/12/2008 - 19/12/2008S2031
532912Net 4 India Ltd.Sterling Capital P ltd--B550580.33231760013.84
532541NIIT Technologies LimitedRajendra Singh Pawar22/12/2008 - 23/12/2008B95056
526753Roselabs LtdSinghal Overseas Ltd--S23050
532993Sejal Architectural Glass LimitedSejal Finance Ltd.24/12/2008B38000
532993Sejal Architectural Glass LimitedDhiraj Shivji Gada.24/12/2008B10000
532993Sejal Architectural Glass LimitedMitesh Kanji Gada.23/12/2008B50000
532993Sejal Architectural Glass LimitedShantilal Shivji Gada.22/12/2008B52000
511754Shalibhadra Finance Ltd.Mrs. Sheetal M. Doshi24/12/2008B1
511754Shalibhadra Finance Ltd.Mrs. Sheetal M. Doshi22/12/2008B1
511754Shalibhadra Finance Ltd.Mrs. Sheetal M. Doshi23/12/2008B52
502563Shree Bhawani Paper Mills Ltd.,Alankar Tandon20/12/2008S10400
532833SPARSH BPO SERVICES LIMITEDMr. Kapil Puri19/12/2008B31840.0211831767.33
505196TIL Ltd.,Marbellous Trading (P) Ltd.15/12/2008B2090002.096035356.02
505196TIL Ltd.,Marbellous Trading (P) Ltd.16/12/2008B630000.626665356.64
505196TIL Ltd.,Avijit Mazumdar17/12/2008B55000
B - Buy
S - Sale


Sunday, December 28, 2008

>Reliance communication technical analysis

We had a good swing trade in Reliance communication a solid 50 points.
Check old post to see the set up Reliance communication technical analysis
All given targets were touched 250.

Now as we have seen a week's more movement in the RCOM chart ,It looks more or
less like a triangle can see clear 3 waves in each triangle wave...
Here we have two opportunities (would be) the safest would be to try to buy
it near 185-190 with a stoploss below 180 for a possible 10%upside target.

Another idea which is a risky one would be to try to long one it gives a breakout
above the yellow line,Why risky? Because breakouts in BEAR market usually get sold



>INSIDE TRADING 26-12-2008

531590Bilpower Ltd.Suresh Kumar Choudhary.17/12/2008B10170.012707222.57
531590Bilpower Ltd.Suresh Kumar Choudhary.18/12/2008B9840.002717062.58
532330Biopac India Corporation LtdPankaj B Doshi22/12/2008B2100
532330Biopac India Corporation LtdPankaj B Doshi19/12/2008B2830
532548Century Plyboards (India) Ltd.Brij Bhushan Agarwal.15/12/2008 - 16/12/2008S73500
532548Century Plyboards (India) Ltd.Brij Bhushan Agarwal.19/12/2008S16301
532339Compucom Software Lt.Compucom Technologies Pvt Ltd.--B160000.06260953610.38
532339Compucom Software Lt.Compucom Software Technologies Pvt Ltd.--B150000.05262453610.44
506401Deepak Nitrite LimitedC.K. Mehta.11/12/2008B1093
522261Dolphin Offshore Enterprises (India) ltd.Mr. Navpreet Singh22/12/2008B1100
522261Dolphin Offshore Enterprises (India) ltd.Dolphin Offshore Projects Ltd19/12/2008 - 22/12/2008B1928
500246Envair Electrodyne Ltd.Mr. Shripad Mirashi15/12/2008 - 19/12/2008B200
532345Gati LimitedMahendra Kumar Agarwal18/12/2008 - 23/12/2008B13687
532767Gayatri Projects LimitedMr. T V Sandeep Kumar Reddy19/12/2008B62262
509567Goa Carbon Ltd.,Shrinivas V Dempo18/12/2008 - 23/12/2008B38261
532015Gravity (India) Ltd.Smt. Dakshaben R Thakkar22/12/2008B17100.02476750.53
526797Greenply Industries LtdPayash Securities Pvt Ltd15/12/2008B5113463.018619035.07
500180HDFC Bank Ltd.Life Insurance Corporation of India17/12/2008B1585190.03213062605.01
532741Kamdhenu Ispat LimitedKamdhenu Overseas Ltd16/12/2008B6125
532732Kewal Kiran Clothing Ltd.ICICI Prudential Mutual Fund17/12/2008S88500.076622454.56
512559Kohinoor Foods LtdTemptation Foods Ltd.16/12/2008B3500001.32298064811.23
523704Mastek LimitedAshank Desai.23/12/2008B2300
523704Mastek LimitedSudhakar Ram.23/12/2008B2556
523704Mastek LimitedKetan Mehta.23/12/2008B3000
507609Olympic Oil Industries Ltd.,Vijay Balwant Patil.11/12/2008S10000
507609Olympic Oil Industries Ltd.,Tushar Rangnath Patil.19/12/2008S4860
532391Opto Circuits (India) Ltd.Mr. Vinod Ramnani03/12/2008B9789288
532391Opto Circuits (India) Ltd.Mrs. Usha Ramnani03/12/2008B2361567
532391Opto Circuits (India) Ltd.Mr. Jayesh C Patel03/12/2008B3435819
532391Opto Circuits (India) Ltd.Mr. Thomas Dietiker03/12/2008B4448567
532391Opto Circuits (India) Ltd.Mr. Suleman Merchant03/12/2008B101917
532391Opto Circuits (India) Ltd.Mr.V Bala Subramaniam03/12/2008B8190
532391Opto Circuits (India) Ltd.Dr. Anvay Mulay03/12/2008B595
532391Opto Circuits (India) Ltd.Mr. Rajkumar Raisinghani03/12/2008B9000
526753Roselabs LtdSinghal Overseas Ltd--S45376
526753Roselabs LtdSinghal Overseas Ltd--S329010
532793Shree Ashtavinayak Cine Vision LtdDahlia Traders Pvt Ld23/12/2008B5000
532945Shriram EPC LimitedR Sundarajan--B3000
532945Shriram EPC LimitedR Sundarajan25/06/2008B4800
532945Shriram EPC LimitedR Sundarajan--B2000
532667SUZLON ENERGY LTD.Amarsinh A Parmar22/12/2008S21000
532667SUZLON ENERGY LTD.Ranjitsinh A Parmar22/12/2008S26000
532667SUZLON ENERGY LTD.Balrajsinh A Parmar22/12/2008S26000
532667SUZLON ENERGY LTD.Vasant A Parmar22/12/2008S3500
532824Vijayeswari Textiles Ltd.M/s Seshraj Enterprises Pvt Ltd23/12/2008B325000.18709266239.03
511333VLS Finance LimitedM.P. Mehrotra (HUF)22/12/2008B200000.054807251.20
B - Buy
S - Sale


Friday, December 26, 2008

>The great American Bailout

A very good write up about American bailout read on..
ed Chairman Ben Bernanke has done it. He's thrown down the gauntlet. Desperate times call for desperate measures, as they say, and the Federal Reserve has now gone "all in."

Specifically, Bernanke and other Fed policymakers ...

• Slashed the federal funds rate to a range of 0% to 0.25% from the previous target of 1%. That is the lowest level in U.S. history. The Fed is now pursuing the same "ZIRP" (Zero Interest Rate Policy) strategy Japan tried several years back to boost its economy.

• Said they would "support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level." That's Fed-speak for "We're going to print money and flood the banking system with massive amounts of reserves."

• Reiterated the Fed's intention to buy "large quantities" of debt sold by Fannie Mae and Freddie Mac, as well as the mortgage backed securities (MBS) that those agencies guarantee.

• In fact, they upped the ante by saying the Fed "stands ready to expand its purchases" if necessary. And it said it was continuing to study whether it should also buy long-term U.S. Treasury bonds.

• Said the Fed will "continue to consider ways of using its balance sheet to further support credit markets and economic activity." What does that mean? Potentially whatever the Fed wants it to mean, as far as I can tell.

The Fed and Treasury are already directly manipulating the secondary market for home mortgages. And they've announced that they're going to intervene in the consumer loan market, too.

Why shouldn't commercial real estate mortgages come next? After all, credit conditions there are tight, aren't they?

Or how about buying the Dow? Higher stock prices would allow troubled banks and corporations to raise money and support the economy ... wouldn't they?

What about corporate bonds? Junk bonds? Artwork? My old football card collection?

I used to think the idea that the Fed might buy assets of all shapes and sizes as kind of crazy — "Kookburger" stuff, to use one of my colleague's terms.

But now? Nothing surprises me.

The 10 Questions
We Should ALL Be Asking ...

Wall Street couldn't be happier with what the Fed and Treasury are doing. Thunderous applause erupted in trading rooms after the Fed's statement came out Tuesday. And the buying of stocks came fast and furious. Ditto for bonds.

I watched fund manager after fund manager — you know, the supposed capitalists out there — come on television and praise the Fed. Heck, they were urging even more socialistic ... er, intervention ... to support the market.

Apparently almost everyone agrees with the idea of a small group of men and women deciding that THEY know the "right" price for mortgage bonds, Treasury bonds, or other assets — while the entire universe of private investors out there has things "wrong."

And the consequences? Nothing to worry about, according to the pundits ...

Question #1: Is the 10% plunge in the U.S. dollar in the span of a few days a clear vote of "no confidence" in the Fed's policy from currency traders?

Pundits' answer: Who cares! We can keep shafting our foreign creditors and they'll come back for more. They always do.

Question #2: How about the deterioration (albeit minor) in the cost of insuring U.S. debt against default?

Pundits' answer: Who cares! We're the U.S. and investors will always flock to our shores.

Question #3: Aren't we completely abandoning 200+ years of American free market principles?

Pundits' answer: Don't bother us with that long-term stuff.

Question #4: Isn't the Fed submitting prudent savers to total abuse by slashing the returns they can earn on their savings accounts and Treasuries?

Pundits' answer: Who cares about them! We need Americans to spend, spend, spend!

Question #5: Was it wise to "fix" the dot-com bubble with easy money ... which led to the housing bubble that has since popped ... and which the Fed is now trying to fix with ... you guessed it ... more easy money?

Pundits' answer: Quit whining! The Fed never makes mistakes. You just don't get it.

Question #6: The idea that maybe, just maybe, the cure for inflated home prices is ... drum roll please ... lower prices? Prices that allow NEW buyers to purchase homes without taking out ridiculous mortgages — and eat bread and cereal to make their payments?

Pundits' answer: We can't have that! We have to prop them up!

Question #7: What about the hundreds of billions of dollars of additional debt our country is taking on? The first TRILLION-dollar deficit in U.S. history? The massive interest costs my little girls, and probably THEIR children, are going to pay for years and years as a result of all these bailouts?

Pundits' answer: Who cares! That's someone else's problem.

Question #8: And finally, have we forgotten the whole concept of occasionally having a cleansing recession? A downturn that, while painful, cleans out all the crud — the crud built up by years of recklessness by greedy bankers, clueless speculators, hands-off regulators, crooked scam artists, and head-in-the-sand policymakers?

Pundits' answer: Nope. We have to prevent that at all costs. Don't bother us with that "healthy business cycle" claptrap.

Look, I keep hearing about how the Fed is doing a great job. I keep hearing that "there are no atheists in the foxhole" and that the government has to do what it's doing to save us all from apocalypse.

But I have two more questions ...

Question #9: What if the economy and asset prices are going to get where they're headed ... no matter WHAT the government does?

What about the idea that we're just delaying the inevitable by trying to prop up home prices?

And the biggest question of all ...

Question #10: What if we spend all this money and end up with nothing to show for it — except for a multi-trillion dollar bill that we'll be paying for the rest of our lives?

Sound crazy?

Then maybe you should check out the December 16 piece in the Wall Street Journal entitled "Barack Obama-san." It chronicled how Japan spent exorbitant amounts of money trying to revive its economy after the twin real estate and stock market busts there.

The steps that Japan took included a 10.7 trillion yen stimulus package in August 1992 ... a 13.2 trillion plan in April 1993 ... 6.2 trillion in September 1993 ... 15.3 trillion in February 1994 ... 14.2 trillion in September 1995 ... 16.7 trillion in April 1998 ... 23.9 trillion in November 1998 ... and 18 trillion in November 1999.

Grand total: A whopping 118.2 TRILLION yen or about $1.35 trillion at today's dollar-yen exchange rate.

Yet it was all for naught. The economy still suffered a "Lost Decade" of deflation and lackluster growth. Or as the Journal explained:

"Keynesian 'pump-priming' in a recession has often been tried, and as an economic stimulus it is overrated. The money that the government spends has to come from somewhere, which means from the private economy in higher taxes or borrowing. The public works are usually less productive than the foregone private investment."

Maybe Bernanke will get what he wants. Maybe his helicopter drops of money will pay off. Maybe the incoming administration, and its team of economic advisors, will do better than the Bush bunch.

But considering the success rate of the past government programs targeted at helping the housing and credit markets (TARP anyone?), I wonder why nobody is worried about waking up another day older ... deeper in debt ... and right back at square one.

Until next time,


This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit


>Will Ambani Brother's patch up?

In the midst of a meltdown, the most intense sibling rivalry in corporate India — the Ambanis — is heading for a rapproachment, says SHANTANU GUHA RAY
LAST WEEK, brokers circles at Asia’s oldest bourse, the Bombay Stock Exchange (BSE), were awash with the rumour that a patch-up between the world’s richest brothers, warring since an infamous split in 2005 and a settlement a year later, might just be possible.

That the good news was merely a rumour was evident from the fact that neither brother — nor anyone from their respective camps — was willing to confirm its veracity. But the very lack of a vociferous denial did help increase the price of their stocks by almost 14 percent.
However, the possibility that there was indeed some fire beneath the smoke was borne out by the fact that this was the third such incident within a fortnight. In the first week of December, the Reliance (RIL) scrip rose to Rs 1258.90, ostensibly because of market talk that it was within reach of a gas supply deal with Reliance Natural Resources Limited (RNRL), owned by sibling and rival Anil Ambani. The value of the RNRL share rose by as much as 26 percent, its sharpest daily rise in 18 months. The two firms are locked in a dispute over whether and at what price RIL is required to sell gas to RNRL.
To read the full story.....

Will Ambani Brother's patch up?


Wednesday, December 24, 2008

>Stock option(out of money option)

Options,A word which generates tremendous interest in a traders mind.A usual

thinking behind buying an option is making more money by risking small amount
of capital,But many tend to loose big time in options.

What Does Stock Option Mean?
A privilege, sold by one party to another, that gives the buyer the right,
but not the obligation, to buy (call) or sell (put) a stock at an agreed-upon
price within a certain period or on a specific date.

Now a Option can be any of the following three depending on the choice of
strike price


An option is said to be 'at-the-money', when the option's strike price is equal to the
underlying asset price. This is true for both puts and calls.

A call option is said to be in-the-money when the strike price of the option is less than
the underlying asset price. For example, a Nifty call option with strike of 3900
is 'in-the money',when the spot Nifty is at 4100 as the call option has value.
The call holder has the right to buy a Sensex at 3900, no matter how much the spot
market price has risen. And with the current price at 4100, a profit can be made by selling
Sensex at this higher price.

On the other hand, a call option is out-of-the-money when the strike price is greater
than the underlying asset price.

Now here ,I would concentrate on out of money calls,as i believe that here if you
can predict future stock movement big money can be made by risking a small
amount of capital of course it should be timed.
Time is the biggest enemy of option traders:).

Fine, So the big question ariese how to decide when to buy an out of money option.
Here since i use Elliott waves principles for my Trading ,I would try to explain
according to it.

The best option trade would be to buy an out of money call in an impulse
at the fall of 2nd wave for a great profit in third wave blast.
of course you need to find a correct wave structure for that.
Option trade is also possible at start of 1st wave or at end of 4th wave but
then the risk is more.

Now to buy a put option best time would be to catch a out of money put at B top.
Have made a small chart to explain it clearly.
Can try near 5th top too for a A wave fall but getting a good point there is a tedious
job,I hope these small hints would help traders in optimizing their trading capabilities.
If someone has got more ideas abot trading out of money options comments are welcome.




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B - Buy
S - Sale