SENSEX 25000

I wish all the readers a “HAPPY AND A BULLISH NEW YEAR.”

In 2010 Informed investor had given me an opportunity to share my views in a conference organized at Thane and my topic was SENSEX 25000. That time the nifty was trading at 5500 odd levels and Ril Ind at 950 odd. When I started the seminar the topic raised many eyebrows about the figure. But I was successful in answering them. I had given nifty target of new high and sensex at 2500 within a year. Nifty made a high of almost 6300 levels. I hope this year we shall see new highs in market.

2010 proved to be very good for some many people but at the same time has been one of the nightmares to some. CWG scam, 2G scam and lot more are now in public. The peopled linked with the scams have surely been made a killing on their Income. No doubt if the Indian markets have just given a return of 15%, but some have turned up multiple times also. But at the same time many people have tasted dust too. Investors who are stucked up with the midcap and smallcap stocks are still trading at their lower circuit levels after their names announced in connection with the stock operators.

Indian equity markets have gained almost 15% with the highest ever FII inflow. FII inflow for 2010 totaled to $28.8bn. On the MF side saw an outflow of nearly $7bn. But Domestic Insurance saw an inflow of $11.5bn. Only Metal index gave a negative return while the other entire index gained in the range of 20-50%.

Crude prices have gained 13%. Silver has gained the most in the precious stone side. It gained nearly 80% while Gold gained just 28%. This reader had suggested buying SILVER at $16. Now it’s almost $30. The Bull Run will continue the same way with some hiccups.

China to control its rising inflation raised the Interest rates on Last Saturday, the second rise in just over two months. The Peoples Bank of China said it would increase the lending rate by 25 bps and deposit rate also by 25 bps.

Inflation in India is been a major concern since a long time. Rising commodity prices lead to the rising inflation rate. Crude Oil prices are on the run and will continue the same in the coming months. There will be no stoppage for the same, as there is no immediately alternative available in such a big quantity.

Coming month once again we will witness volatility and stock specific movements on back of Quarter 3 results. Banking stocks will be in limelight.

In the metals sector, a trader will think gold and silver will be good performer sin 2011, but industrial metals like lead, zinc, copper, nickel and aluminum are more likely outperform than others. The world is running in to potential supply shortages in copper and nickel, demand remains strong.

In precious metals, platinum is also undervalued with relation to gains of gold and silver.

Gold is up more than 28% in 2010 and silver 81% but platinum is only 16% up while copper gave gains of 24%. Investors purchased gold and silver primarily as safe havens for inflation hedge. China has been buying and maintaining stock of copper which is used in wiring, cable and plumbing has a great potential for global growth. London Metal Exchange copper future hit a new all time high in December.

An aggressive pick is crude oil, the world demands more and more. An investor will see some significant appreciation in the coming next year for such reasons. The record high price of 2008 may not be seen in the near term, but technically, crude looks bullish for the coming year. On the other side, OPEC seems happy with higher prices and doesn’t look to change production levels, where as demand from emerging markets and low interest rate environment will have lead to addition in demand in US and the world.

Technically speaking Nifty has given breakout on the upside. As mentioned in my last article that the Nifty chart has shown some positive signs. Nifty had taken good support at its 23.6% retracement levels and bounced back. Today it has closed above its long term trendline. Last week MACD has given positive divergence. And this week Indices gained. Nifty closed at 6134. Sensex closed at 20509.

Nifty will face resistance at 6145-6180 levels. It seems that the Nifty is now in a new territory and the run will continue for some more weeks. Nifty chart suggests that now it’s in the making of a “W” recovery. It has breakout above its trendline and looks firm. Nifty might in the coming weeks may cross.

Last weeks Call

Buy SBI with a SL of 2730 tgt 2792-2805. Tgt reached, made a high of 1827.

Sell Ultratech Cement below 1040 SL 1045 tgt 1030-1018-1007. Did not trigger.

Sell Torrent Power with SL of 270. SL triggered

Sell Tata motors belo 1303 SL 1307 tgt 1286- 1269. Tgt reached, made a low of 1252.

Buy Suzlon above 51 SL 49.50. Made a high of 55.35

Buy Sunpharma above 470 SL 467. Made a high of 490.

Buy Relcapital With SL of 641. Made a high of 672.50.

Buy Rcom with SL of 132. Made a high of 146.35.

This weeks call

Buy Ashok Leyland with SL of 62.25.

Buy Axis Bank above 1354 SL 1345. tgt 1365-1370-1384.

Sell Bpcl below 656 with SL of 661.

Sell DrReddy below 1662 SL of 1676.

Buy Hdil SL 188.

Buy Ibreal SL 127.

Sell Infosys below 3430 SL 3440.