By the end of the Sunday evening we are all riding on the horse of Monday's speculation about where the Nifty and The BSE sensex will head in this week. Junks of coffee with nonstop phone calls among the close circuit of the brokers and traders community are the routine works of Sunday evenings. We speculate catch fancy expectations of which some gets the clinch where majority end up with a hole in pocket. Nifty is moving around the range of 4900-5300 for the last couple of months followed with certain abnormal hiccups due to the European debts crisis followed with abnormal global imbalances. No predication can be made regarding these hiccups and abnormal days, unless you are gifted with a Magical power to foresee the future.
I am not here to lecture you up or add some magical foresights but in a plain vanilla way Nifty will touch 5800-6000 in Diwali .Shocked, mouth watering and don't believe attitude are the reactions might have been shown by after reading this. The first two are the worst and the last one is the best reaction. Since don't believe will not make you land up in a situation where you pocket gets a hole.
The Nifty have the tendency to catch up 5800-6000 in Diwali due to some running healthy factors. We all know that monsoon have started well in time. Now how we declare that before the government declared it. Very simple if it's raining in your city at this point of time and for the past 2 weeks monsoon has forced you to wear rain coat then monsoon is well in time. Monsoon began in many part of India at its official time of arrival.
Good monsoon gives boots to agriculture. So commodities are going to perform well. Good agriculture will result to increase utility of fertilizers. Healthy production of agriculture will also increase the demand for tractors and agriculture/commercial related vehicles. Irrigation sector stocks also get a huge growth from the healthy monsoon. So the stock and the sectors where you will invest to get good return and which will push the Nifty to 5800 levels are
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Commodity stocks
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Fertilizer stocks,
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Automobiles particularly the ones deals with tractors and commercial vehicles.
Now auto sector demand pushes the demand of steel and auto ancillaries. Banking sector is the biggest winner among all these positives gains and outcomes .Since banking loans picks up due to demand and healthy agriculture growth.
So the final list which come out from the above analysis of healthy monsoon which will place the Nifty in 5800-6000 levels are
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Steel,
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Banks
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Auto ancillaries
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Commodity stocks
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Irrigation stocks which includes pipes and irrigation ancillaries,
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Fertilizer stocks,
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Automobiles particularly the ones deal with tractors and commercial vehicles.
Now many of my readers will raise the voice that if monsoon fails to boost up the agriculture sector then what will be the portfolio of stocks at that point of time. My prescription will be stay to these sectors mentioned above. Since if monsoon fails to bring cheers to full extent , even the half extent of it will bring 10%-25% growth in the above sectors. It might sound conservative but that's the best way of anticipating speculations. This 10%-25% will bring Nifty around 5700 levels during Diwali. So the portfolio of your stocks for the next 6 months should have stocks from these sectors followed with Cement and infrastructure and realty. Since during monsoon the demand and the growth of these sectors decline and pots monsoon they slowly pick up the growth. These sectors will be in your portfolio but .with less priority ranking as compared to the other mentioned above.
This is not a speculation created on the magical functions. This is called plan in advance and keep your funds ready for picking up stocks. Only request is not to pick up stock at this point of time. Invest when the market will be a mood for short term profit booking. Their is no need of any panic of choosing the stocks at this point of time. The rally in these stock will begin when the government will declare in the month of September that monsoon have been healthy. Those who are holding stocks in these sectors should go for HOLD option and should go for further build up of stocks of these sectors.Till that time you will get enough time to plan for the super ride of 5800-6000 Nifty in Diwali.
CAclubindia
