LET THE MARKET TELL WHO WE ARE

Pundits around the world have signaled “All Clear” and it’s time to go all in, right? Wrong. We’ve been avoiding calling a bottom here at Q1 Publishing for months now. However, that could be about to change. Four of our five bottom indicators are turning bullish and we’re just waiting for one more. 1. Signs of a Market Bottom: The VIX sets new highs The CBOE Volatility Index (“the VIX”) continues to set record highs. The VIX is a measure of the premium value placed on S&P 500 option contracts. It’s basically the cost of portfolio insurance. When fear is high, so are insurance costs. The VIX set an all-time high of 89.53 on Friday. Previous market bottoms were set when the VIX went into the 40’s in 2003 and when it surged into the 50’s in 1998. The VIX, at this level, is somewhat of a bullish sign. On its own, the VIX doesn’t mark the bottom of anything, but it is a good indicator to see that fear is reaching some extremes. 2. Signs of a Market Bottom: Weak Hands Walk Away One of t...

Frontline stocks that have been beaten down badly in the October mayhem may offer good long-term potential for investors willing to stick their necks out and buy them at attractive valuations, analysts and equity experts say. Many of these stocks such as Bharti Airtel, BHEL, Hindustan Unilever, are fundamentally strong companies with sound management in fast-growing areas of the company, they add. "We like stocks like RIL, Bharti Airtel, HDFC Bank, BHEL and GAIL. Though the downside risk is linked to the market, these companies have solid business fundamentals. They are leaders in their respective businesses and have the ability to deliver," Rajat Rajgarhia, head, institutional research, Motilal Oswal. "All the banks in the Sensex like SBI, ICICI Bank, HDFC bank, IT stocks such as Infosys and RIL have fallen significantly and have the least downside risk," says Dipen Shah, vice president, private client group of Kotak Securities. For example, Bharti Airtel has lost ...

After swinging between positive and negative terrain throughout the session due to October F&O expiry, Indian equities ended marginally higher on Wednesday. Shares of metals and oil & gas companies surged as commodities bounced back in international markets while realty, pharmaceuticals and FMCG ended in the red. Bombay Stock Exchange’s Sensex closed at 9,044.51, up 36.43 points or 0.40% from Tuesday’s close. It touched an intra-day low of 8,894.34 and high of 9,297.76. National Stock Exchange’s Nifty ended at 2,697.05, up 12.45 points or 0.46%. The index touched a low of 2,631.90 and high of 2,781.25 during the day. However, BSE Midcap Index closed lower by 1.99% and BSE Smallcap Index ended down 1%. “Market is volatile both ways and anything can happen. We may even witness a strong rally. Investors should slowly get in on declines by putting in cash into the market at fixed time intervals. Avoid metals and real-estate until a bull market is confirmed”. Among the sectoral ind...

Indian investors, who missed out on the stock rally that followed the rate cut by US Fed, had a chance on Friday when Bank of Japan lowered interest rates after seven years. This, together with a softening of inflation in India and expectations that RBI and other authorities like the European Central Bank could pursue a loose monetary policy, prompted some institutional buying in Indian stocks. Even as most Asian and European markets bled amid fears of a global recession, the Sensex rose 744 points to 9,788 on Friday on the back of more than Rs 1,200-crore net stock purchase by FIIs. However, domestic institutions, including MFs, which are battling redemption pressures, chose to book profits. Market sources said Friday’s upswing was kind of a relief rally which would not last long, as the undertone still remained bearish. The trigger was mainly the drop in inflation, which fell to 10.68% for the week-ended October 18, from 11.07% in the previous week. “The market will continue to be v...