Stock Tip - ORCHIDCHEM

Orchid Chemicals & Pharmaceuticals Ltd.
NSE Symbol - ORCHIDCHEM
Current Market Price - Rs.280.00 (April 17, 2008)
Recommendation - SHORT SELL
Target - Rs.250.00 (by April 25, 2008).

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Disclaimer - Stock market recommendations are based on fundamental and technical analysis of stocks and no profit can be guaranteed. Investors are advised to make their own investment decisions with the information provided. Any investments, trades, and/or speculations made based on the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk.

I Remember April...!

"If you want to understand today, you have to search yesterday." ~Pearl Buck.

          Following Mr. Bucks great words of wisdom, I decided to look back in time and see how the month of April unfolds for the stock markets.
          The month of April is very important for the stock markets, as this is the earnings season. The companies report their earnings and there is a lot of volatility as these numbers affect stock prices.

           I have taken data from 1999 to 2007. 
 

April 1999 :-
Nifty on April 1st - 1063.65
Nifty on April 30th - 978.20


April 2000 :-
Nifty on April 1st - 1534.75
Nifty on April 30th - 1406.55


April 2001 :-
Nifty on April 2st - 1138.20 (April 1st was holiday.)
Nifty on April 30th - 1125.25

April 2002 :-
Nifty on April 1st - 1138.95
Nifty on April 30th - 1084.50

April 2003 :-
Nifty on April 1st - 984.30
Nifty on April 30th - 934.05

April 2004 :-
Nifty on April 1st - 1819.65
Nifty on April 30th - 1808.95

April 2005 :-
Nifty on April 1st - 2067.65
Nifty on April 29th - 1902.50 (April 30th was holiday.)

April 2006 :-
Nifty on April 3rd - 3473.30 (April 1st and 2nd were holidays.)
Nifty on April 29th - 3557.60 (April 30th was a holiday.)

April 2007 :-
Nifty on April 2nd - 3633.60 (April 1st was holiday.)
Nifty on April 30th - 4087.90

April 2008 :-
Nifty on April 1st - 4739.55
Nifty on April 30th - ????.??

Markets know the future 
--------------------------

While going through the charts since 1999, one thing is very clear. If in April the Nifty is at or close to its high since January, then the earnings are good and markets move up. 

On the other hand in the years when Jan or Feb or March are higher than 
April then it means that the markets are expecting poor earnings and the 
month of April triggers a fresh bear move.

This year we are way off our highest close of 6287.85, hence it is very clear that the markets expect poor earnings and a confirmation of the same this month will trigger a fresh bear move.

Market's first brush with reality will come when YES Bank announces its results on the 9th of April. Further confirmations will follow next week with industry leaders like Infosys issuing their guidance for Q1.

Strategy for this month
------------------------

Traders should take short positions at every rise. However, the best way to make money this month are likely to be Options. By trading in the right options at the right price a lot of money can be made.

Do not venture without the right advice
----------------------------------------

Irrespective of whether you are a trader or an investor, you must not venture into the stock markets for the next few months without a financial advisor. 
Also remember that a financial advisor cannot make things better unless 
you act on his advice.

Commercial Information
-------------------------

Every year, irrespective of the trend, you can easily earn 100% returns,
year after year after year by subscribing to my services. 
It costs very less and gets you huge returns. 

Contact me at benitism@gmail.com and I will design for you a winning 
strategy.

Disclaimer
-----------

Stock market recommendations are based on fundamental and technical analysis of stocks and no profit can be guaranteed. Investors are advised to make their own investment decisions with the information provided. Any investments, trades, and/or speculations made based on the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk.

Now... India Does Not Believe In Tears

INFLATION IS RISING
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While you were busy counting your stock gains, you probably did not notice the signals of a global shortfall in commodity and food supplies. One fine morning last week people woke up in Kolkata to find Tomatoes cost Rs.50/kg! Thankfuly it was only Rs.16/kg in Bangalore but soon the prices will even out. The prices of wheat, pulses and oil are all touching the sky. While people are struggling to make both ends meet, industry is crying foul over rising steel prices. Some hypocrites are even expecting the stock markets to rise! They would surely rise if they were commodities but unfortunately they aren't.

THE BULLS CAUSED THIS
------------------------------------

When the process of economic liberalisation started in India, Harshad Mehta and his bunch of bull market operators applied so much pressure on the Government that the Government's first steps were focused on money markets. FIIs were allowed entry, banking and monetary reforms were introduced. The bulls wanted lower input costs, so duties began to be reduced, companies began to operate with more freedom and stock markets went crazy. No one bothered about the farmer. In a nation of farmers, no one thought of introducing agricultural reforms.

CHIDAMBARAM'S CHALLANGE
-------------------------------------

Finance Minister Mr. Chidambaram faces a tough task to control inflation and that too in a year when elections are likely. High food prices are highly unlikely to win votes. On one hand he has the industry and on the other the "aam aadmi". The "aam aadmi" wants lower food prices. The industry is more bothered about commodity prices and monetary policies. So far Mr. Chidambaram has been very creative. He has removed import duties on select products and reduced the duties on some other products. He has also forced steel producers to roll back price rises. He has also so far managed to avoid an increase in CRR and repo rates. But can he control global price rise? I don't think so.

THE MARKETS AND REALITY
--------------------------------------

As soon as the farmer loan waiver was announced the foolish analysts and ignorant investors began blaming the Government of populism and election politics. As it turned out the banks had nothing to lose except a small potential income. However, it became increasingly clear after ICICI Bank's MTM loss disclosure that something was wrong. Soon we had L&T report Forex losses and a company in Chennai filed a lawsuit against ICICI Bank. Now we are waking up to reality. We are realising that India Inc. was speculating in the Forex markets to an extent that it could wipe off some of the companies' entire annual profits! One can't blame the Government for that now, can they? Weren't bulls asking for a very liberal monetary policy and more freedom for companies? Now with all that freedom we seem to have made a mess of our earnings. Any Government action related to liquidity will be bad for the markets but they should have no complaints, markets move on earnings and if the earnings decline then we cannot blame the Government.

THE GLOBAL GRAMMAR
------------------------------------

Mr. Chidambaram recently said, "We cannot change the global grammar". Very true. If globaly there is a slowdown in Industrial growth we cannot do much. In the past we have seen some economies collapse in such situations. We have seen Thailand, we have seen Argentina. Let us see who faces trouble this time around.

AMERICA'S DEBT
-------------------------------------

America's debt is going largely unnoticed. In 1998, reeling under heavy external debt, USSR defaulted sending global markets into a crisis. Though such a situation may not arise again, one cannot discount the possibility of a devaluation in US Dollar to balance the situation. It will mean lower earnings for Indian IT firms and a possible Rupee appreciation to curb price rises.

THE ROMANCE OF SOCIALISM
-------------------------------------

We must not forget that we are a socialist nation. We have to think about the "aam aadmi" first. There are many options to curb price rises including the possibility of the Government taking almost total control by determining prices. However, the only long term solution is to increase supply. If you are running short of steel, increase steel production. If you are running short of food, increase food production. Implement agricultural reforms to attract people to agriculture. Make farming more attractive than an IT job. Strengthening the Rupee will reduce import costs but it will punish the IT sector. Increase in CRR will slow industrial growth. It does not matter what the Government does, there will always be a negative side to it. So we can as well go ahead and take some strong steps. We must not forget that we are for the good of the common man and not for the IT and Banking sector. If some policies can help the common man even at the cost of exporters we should not hesitate in using them. Bring back the romance of socialism.

Great Offers for Traders and Investors

Saurabh Singh is a Stock Market analyst who has been consulting retail investors and stock broking houses for the last seven years. He offers advice based on both, Technical as well as Fundamental Analysis. He is one of the very few Indian analysts who advices on global markets. He offers regular recommendations and trading advice on Indian and US stocks.


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March Review - We beat the market again!

In the month of March the stock market indices dropped but we were able to deliver positive returns to all of you who followed the advice given in this blog once again.

Here's a quick review :-

DBTK :-
Recommended Price - $10.39
Current Market Price (Apr, 01, 2008) - $12.04
Profit - 15.88%

FORM :-
Recommended Price - $16.38
Current Market Price (Apr, 01, 2008) - $20.12
Profit - 22.83%

MDRX :-
Recommended Price - $8.76
Current Market Price (Apr, 01, 2008) - $10.40
Profit - 18.72%


Average return for the month of March was 19.14% despite the Dow, S&P 500 and Nasdaq giving negative returns.

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