Sell when markets rally and buy on short dips
Prime Minister Narendra Modi plays a musical instrument during an election rally for the second phase of State Assembly elections, in Ambikapur, in Chattishgarh. Pic/PTI
Markets continued their upward trajectory for the third week in succession. BSESENSEX was up 298.61 points or 0.85 per cent to end at 35,457.16 points. NIFTY gained 97 points or 0.92 per cent to end at 10,682.20 points. The broader indices saw the BSE100, BSE200 and BSE500 gain 0.69 per cent, 0.61 per cent and 0.45 per cent respectively. BSEMIDCAP was up 0.36 per cent while BSESMALLCAP was down 1.27 per cent.
The top
The top sectoral gainer was BSECONDUR up 3.15 per cent followed by BSEBANKEX 1.45 per cent and BSEFMCG 1.15 per cent. The top sectoral loser was BSEHEALTHCARE down 2.34 per cent followed by BSEMETAL 2.30 per cent and BSEREALTY 1.96 per cent. In individual stocks, the top gainer was Bharti Tele up 11.78 per cent followed by Eicher Motor 9.85 per cent and Bharat Petroleum 8.68 per cent. The top loser was Yes Bank 16.04 per cent followed by Sun Pharma 12.80 per cent and India Bull Housing 11.10 per cent.
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Calm returns
The Dow Jones was under pressure and lost 576.08 points or 2.22 per cent to close at 25,413.22 points. Indian Rupee gained 57 paisa or 0.79 per cent to close at R 71.92 to the US Dollar.
The RBI board is to meet today Monday November 19. The meeting is supposed to be a routine one after the RBI Governor met the Prime Minister and Finance Minister in the week gone by. It appears the issues have been resolved and expected fireworks in the RBI meeting will not explode. The Govt. cannot afford to have major differences with state elections a fortnight away. Troll over of commercial paper on November 14 passed peacefully without any major hiccups. At the same time, the government has asked the RBI to open a special window to help disburse liquidity to the NBFC sector. Calm has returned to the sector and things are quieting down.
Consolidation time
In the following week, November futures would expire. Currently, the bulls have an upper hand with NIFTY up 557.30 points or 5.50 per cent ahead. With nine trading sessions to go, it clearly appears that bulls are in complete control and would end being the winners in November.
Markets have been gaining over the last three weeks and have come a long way from the bottom. It appears that they are likely to consolidate around these levels and needs news flow to move sharply in either direction. The next news event is expiry nine trading sessions followed by election results of five states on Tuesday, December 11.
Tough session
Parliament will begin its winter session on Monday, December 10 and it will be a tough session for all parties concerned. Election results should determine the mood on the floor of Parliament and the market. Of course these elections are only the run up game and the main action is the general elections in April-May 2019. One should continue the strategy of previous weeks where one should sell when markets rally and buy on sharp dips. Keep your position light and refrain from shorting, as bulls love these situations.
Arun Kejriwal is founder of the Mumbai-based advisory firm Kejriwal Research & Investment Services Pvt Ltd.
Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is for educational and information purposes only.
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