Dalal Street Investment Journal - July 09, 2019

6 DALAL STREET INVESTMENT JOURNAL I JULY 8 - 21, 2019 DSIJ. in^

Stay Long As The Bull Market Is Intact

B

y the time this issue reaches you, the “most-awaited Union budget” would have been released

already and the markets will be taking cues from the specific proposals and the overall

contours of the budget. Mostly, the budget should set a bullish tone, thus pushing the markets

to all-time highs.

The bullish market structure is still intact even as the premium for Indian markets, when compared

with the emerging markets, has reduced owing to the slowing of growth and the liquidity concerns

impacting the corporate profitability. All eyes will be on the June quarter results as investors would

be keen to know how their holdings are performing. While the interest rates are coming down, the

crude oil prise rise is something that impacts the economy negatively. Ideally, softening interest

rates, along with softening of crude oil prices, should do the trick for the Indian economy as the

fiscal deficit situation is not worrisome and the overall the macroeconomic situation can propel

growth in the coming quarters.

The highlight, in my view, of the first half of 2019 is the very few IPOs that have hit the markets this

season. Only 8 IPOs – can you believe that? Only eight companies have raised capital via main

bourses on a YTD basis so far. But then, past is history, and who wants to focus on history when it is

the future that we are looking at. Our cover story on the IPO market in this issue talks about the

prospects of the IPO market in the remaining part of the year. Looks like the IPO market is all set to

revive. Do let us now your feedback on the cover story.

Penny stocks is one subject in the stock market that everyone loves to talk about, but very few are

able to invest in profitably. In our special story on penny stocks, we have highlighted the

performance of penny stocks in the past few years. We have highlighted the best practices for penny

stock investing and also pointed out the risks of

penny stock investing. It will be exciting to read

your feedback on the special story.

While attempting to predict the markets, studying

the trend reversal patterns is very important and

useful. In our special story on trend reversal

patterns, we have highlighted the most important

trend reversal patterns that you can bank on. It is

interesting how much these patterns reveal about

the stock price behaviour. I am sure you will

benefit from the story.

At this juncture when the Indian market as

represented by Sensex is trading near its all-time

high and yet underperforming its global peers, investors can stay long and avoid succumbing to any

sort of pessimism on the market moods. The FIIs are interested in putting more money in India, MF

investments are still witnessing healthy inflows, global equities are on a song, trade war tensions are

de-escalating, interest rates are expected to remain soft and growth is expected to pick up. The

liquidity problem faced by the NBFCs is real and is being addressed as we speak. The profitability of

Corporate India will take a boost once the interest rates are rationalised further and the GDP picks

up its growth trajectory.

Focus on consistent performers where valuations are not too expensive. Avoid buying leveraged

stocks and stocks facing any corporate governance issue.

Stay tuned, stay bullish!

Happy Investing.

V B PADODE

Editor-in-Chief