[SmartCat]

Originally Posted by sukhoi

So we have seen a 1000 point upmove on Nifty between yesterday and today (so far). Am not able to understand what is driving the markets up? Are markets factoring in something else or any other reasons?

In a bull market, the markets don't go up all the time. There will be corrections. Similarly, in a bear market, markets don't go down all the time. There will always be retracements (upmoves).

[sunilch]

Originally Posted by sukhoi

So we have seen a 1000 point upmove on Nifty between yesterday and today (so far). Am not able to understand what is driving the markets up? Based on whatever I have seen in the news, we are not near a cure yet and in India there is no clear direction around whether lockdown will be lifted or extended or partially lifted.


There was some news today about an upcoming aid package (saw the headlines flash on TV) but that does not explain the run-up of yesterday. Are markets factoring in something else or any other reasons?

Originally Posted by SmartCat

In a bull market, the markets don't go up all the time. There will be corrections. Similarly, in a bear market, markets don't go down all the time. There will always be retracements (upmoves).

There are multiple reasons why markets are (and can be intermittently) UP now after a series of downs.

1. What SmartCat has already said. Players are just taking a pause and buyig what they like/believe in. Net-net there are more buyers than sellers for these couple of days.
2. This is a start of the month which also had a couple of holidays (markets closed). We have many SIPs during the first 10 days as opposed to the later part of the month. Hence you may see a lot of buying by DIIs/MFs.
3. China has stuck to its commitments. They had announced opening of Wuhan on April 08 and they did so. Wuhan is now open to both incoming as well as outgoing traffic. Flights are now open, so is road traffic.
4. China has also reported that there were no new deaths on Tuesday, April 07. Both of these factors are giving confidence to the players that things will eventually settle down. If China remains open for business for another 10 days without any second round of wave of infections, the world will start forgetting the bad past and look at the future in full glory again.
5. Regarding the Vaccine for this Virus. The world has by now completely understood and accepted that we are unlikely to have the same for at-least 1 year. We need to get moving without it, with pre-caution and hence this rise and fall of markets is not dependent on the same.

Off-course all this is my understanding and nothing official. Not a recommendation to enter/exit the markets.

[CrAzY dRiVeR]

Originally Posted by sunilch

This is a start of the month which also had a couple of holidays (markets closed). We have many SIPs during the first 10 days as opposed to the later part of the month. Hence you may see a lot of buying by DIIs/MFs.

True. Monday was a holiday and again Friday is!

Plus I believe there is an expectation in the markets that the prices may go up next week once if the lockdown is lifted, and people are assuming we have hit the bottom of the Corona period and trying to get into the markets! Even stocks like INOX and PVR have seen a small uptrend.

Expecting another win for the bulls tomorrow.

Will be interesting to see how the market reacts next Monday morning, depending on how the lockdown is treated going forward! Incase we have further extension in certain core areas where the infection numbers are still rising, all these gains could be wiped out next week.

[Thermodynamics]

Honestly, I am confused. Last few weeks have been extremely volatile. Vix was pretty high. I thought to wait.

Now that Vix has come down and many countries in the coming weeks will see a decline in Covid. Also, FII have started to pour in lured by attractive rates. So can we take this as a sign of market recovery?

The flip side:
IMF has announced that recession has officially started. Historically, it would take at least 10 months to bottom out but this has been just 2 months into it. What would be the effect of lock down on economy, MSME health, India's poverty ratio and buying capacity.

I tend to believe a bear market in the near future despite present gains. I may be wrong.

[SmartCat]

Originally Posted by Thermodynamics

Last few weeks have been extremely volatile. Vix was pretty high. Now that Vix has come down. So can we take this as a sign of market recovery?

India Vix or Volatilty Index is a good indicator of market mood.
https://www.moneycontrol.com/indian-...ia-vix-36.html

Vix has come down to 50 levels, but that is not enough. Average Vix of Nifty is around 15. If Vix slips down below 20 levels as Nifty is rising, only then it is a reasonably good indicator that we are out of the bear grip.

[JMaruru]

Originally Posted by SmartCat

You should NOT look at dividend history. You should look at dividend payout ratio (DPR) history. If a company claims to generate Rs. 100 cr as profits, they should payout atleast Rs. 15 cr as profits.

Well, the DPR which is shown on the table is against the 'Face Value' of the stock and NOT against the 'Profits'.

Please confirm.

[Sherlocked]

Can someone explain the logic behind the HDFC Bank share's price movement of today. It had a gap up opening and later settled at 895-900 and has been trading in those levels only.
Thanks.

EDIT: What I mean to ask is why such a flat movement?

[CrAzY dRiVeR]

Originally Posted by Sherlocked

Can someone explain the logic behind the HDFC Bank share's price movement of today. It had a gap up opening and later settled at 895-900 and has been trading in those levels only.
Thanks.

EDIT: What I mean to ask is why such a flat movement?

Similar question I came to ask, but I want to know the opposite because I expected a fall today.

Wondering what made the market gap up on opening? I was quite interested to see the response to the lockdown extension - but guess that was already factored in the prices during the earlier fall?

[SmartCat]

Originally Posted by CrAzY dRiVeR

Similar question I came to ask, but I want to know the opposite because I expected a fall today. Wondering what made the market gap up on opening? I was quite interested to see the response to the lockdown extension - but guess that was already factored in the prices during the earlier fall?

In these times, Indian markets will ignore India news and will follow S&P 500 (American index). So why is Indian market up 2% today? Because American index S&P 500 was up 2% yesterday night. Blue line is Nifty, green line is S&P 500:



So if you want to predict (with reasonably good accuracy) what will happen to Nifty tomorrow, just look up today's S&P 500 movement - US markets open at 7:00 PM and close at 1:30 AM Indian Standard Time.

[wheelguy]

Originally Posted by SmartCat

In these times, Indian markets will ignore India news and will follow S&P 500 (American index). So why is Indian market up 2% today? Because American index S&P 500 was up 2% yesterday night. Blue line is Nifty, green line is S&P 500:

Where can we get to compare different indexes on the same graph, I mean what website?

Any insights on Pidilite Industries, looking to add it to my long term porfolio.

Thanks in advance.

[SmartCat]

Originally Posted by wheelguy

Any insights about Pidilite Industries, looking to add it to my long term porfolio.

Pidilite has a PE ratio of 57. It means the market value of Pidilite is equal to 57 times its net profit, which is too expensive. I prefer buying stocks with a PE ratio lower than 20.

Where can we get to compare different indexes on the same graph, I mean what website?

www.tradingview.com

You can also compare Index with commodities (eg: gold, crude etc) or currencies. Here is a graph of NIFTY (blue line) against USDINR (red line)



Note that Nifty and USDINR have negative correlation. If NIFTY goes down, USDINR goes up (Dollar gains against Rupee). That's why people recommend Gold as a hedge - if there is bad news in India, foreigners will flee with their capital. When that happens, USD appreciates against INR (from 70 to 75 in this case). Since Gold is priced in USD, Gold in INR appreciates in value too.

[highlander]

While a lot of stocks are down, it is expected that these will drop even further as quarterly results start coming out.

Originally Posted by SmartCat

Similarly, in a bear market, markets don't go down all the time. There will always be retracements (upmoves).

So, are there any indicators/params (like a lower threshold) to determine the optimal time in this drop to buy the stock? I do not mean about the absolute lowest price, but somewhere lower in the 'V' curve to maximize gains.

Here is one such advice.

Here is a simple plan to follow (which can be evolved based on your personal risk profile and time frame)

Invest 1% of your earmarked amount into equities daily (this can be automated via a process called Systematic Transfer Plan)
If markets decline by 40%, that is, Sensex@26,000, invest up to 50% of your earmarked amount in equities
If markets decline by 45%, that is, Sensex@24,000, invest up to 75% of your original earmarked amount in equities
If markets decline by 50%, that is, Sensex@22,000, invest entire 100% of your earmarked amount in equities

Read more at:
https://economictimes.indiatimes.com...campaign=cppst

Is there a better plan than this? Can someone improvise this.

[SmartCat]

Originally Posted by highlander

So, are there any indicators/params (like a lower threshold) to determine the optimal time in this drop to buy the stock?

The safest thing to do is NOT invest in the markets when India Vix or volatility index is at such elevated levels.



Historically, the average NIFTY Vix has been 15, and it usually trades between 10 and 20. But when there is "risk" in the market, Vix shoots up. It shot up to 80 levels last month, before trickling down to sub-50 levels now.

If coronavirus risk abates, India Vix will fall down to normal levels (around 15) and you can start picking stocks. Remember that not all stocks will recover at the same pace - so you will have lots of time to buy your favorite stocks even if NIFTY recovers. But the disadvantage of this methodology is that you won't get stocks at absolute lowest prices.

Here is one such advice. Is there a better plan than this? Can someone improvise this.

This is what I do in a bear market:

On www.screener.in, I have setup rules that lists out high dividend, low price to book and high RoE growth stocks as separate categories. As soon as a stock enters my screener (because of falling prices), I evaluate the stock for investment. Eg: my search string for largecap growth stocks



Running the query displays these stocks:



I will then evaluate each stock displayed by my stock screener and then invest a fixed amount. I do not usually average down a stock. If markets fall further, new expensive stocks will fall in value and "enter" my screener. I will then decide on purchasing those stocks. The advantage of this strategy is that "buy decisions" are made by hard inflexible fixed rules. Only if a stock is trading at what I think is fair valuation, only then I'll buy. The disadvantage of this strategy is that one might soon end up with a large number of stocks in a bear market.

If anybody needs my screener.in "formula" (settings) for shortlisting stocks, let me know and I shall share them here.

[Pancham]

Originally Posted by highlander

While a lot of stocks are down, it is expected that these will drop even further as quarterly results start coming out.

Not sure about this since the COVID effects were mostly seen in the last few days of Q4. No? Correct me if I am wrong.

Originally Posted by SmartCat

On www.screener.in,
If anybody needs my screener.in "formula" (settings) for shortlisting stocks, let me know and I shall share them here.

I had a query since you use Screener.in. Couple of days back I saw some script data that was wrong/not updated. Is it a reliable website?

EDIT: Please do share the formula. Very interesting.

[OHCVtec]

Originally Posted by SmartCat

If anybody needs my screener.in "formula" (settings) for shortlisting stocks, let me know and I shall share them here.

Hi SmartCat, would appreciate if you can share the formula here. It will definitely help a lot of us to make some buying decisions in these volatile times.