Monthly Archives: February 2016

Gold to glitter which could be a bit bitter

Gold had been the most under performing invest asset since last 4 years since it pinched to new high but in recent past it has outperformed all the equity markets with some quick short term gains. Today i finally managed to get some time to analyse asset from the longer term perspective and just caught hold of a channel on Monthly chart of USD Gold and we could notice that its perfectly trading in that channel since late 2013.  Though the channel is downward sloping which means overall outlook is bearish and this is just a short covering, but look at the indicators. Indicators are highly oversold that too on monthly chart, and are their moving averages are emerging over the indicator. This gives me a bit bitter moment being a equity guy. It is usually believed that Equity and Gold are inversely related because in rest of the world, except india, its just considered as an alternative investment idea!  So if the gold demand is increasing, it simple states that equity money is following to Gold worldwide. But still a long term reversal confirmation is AWAITED. As you all could notice in the chart, gold is approaching resistance on the channel which is at $1258 (100 Months moving average) while another strong resistance is just above it which is at $1300 (Fibonacci resistance and channel resistance). So for confirmed breakout on Gold and a confirmed sell-off in equity, range of $1258-1300 is crucial breakout. Only time has the say now…so lets wait and watch.

Fear of Fall revisits chart

Nifty has finally given a breakout of a wedge on the downside and have seen a close below the same which has meant a bearish mood on the markets for coming days. Though yet we need confirmation for the pattern breakout with 2 more close, we can stay cautious for the long positions. Today after the close, i have tried to mark Nifty into the red channel, suggesting that we could see 6690 levels if we didnt recovered in next two days and closed above 7200. Technically, on weekly chart we need to trade below 6960 which is previous  weeks low to get confirm bears party. So tomorrow being expiry, we can expect a volatile session and Friday can be a crucial close again. So may be we could still avoid trades for next two days and wait for a confirmation weekly close.

So crucial levels for on Nifty remains 6960: Previous weeks close, 6869: 200Weeks average and for the upside anything above 7180 is safe. So just wait and watch!!

My view on Railway Budget

February’s last two weeks each year, newspaper are flooded with the word “Railway Budget” and its always difficult to understand for a common man what exactly it is. So let me explain you guys in some simple words what is it and what shall we expect. To define Railway Budget, ” It is the estimation of Income and expense of Railway department for next financial year”. For the Railway major revenue comes from Sale of passenger tickets and second most source of income is Goods carriage or say freight. On the expense side they have a long list from maintaining coaches, tracks etc to staff expenses.

On the budget day we all wait for new trains to be announced from our home town while companies related to rail industry waits for new tenders and staff wait for rise in salary. But leaving all this expectations aside, i feel this year we also should lookout for some other announcements from the minister which are though minor but will surely improve our travelling experience with railway.

These are some of the points which i personally feel should be focused:

  • Internet on Travel:  Today when we are talking about Digital India and trying to connect more and more Indians through internet, we should think of seamless connectivity with less disconnection. At present, we are not able to get seamless connectivity on 2g/3g on mobile while travelling on trains but if wi-fi connection is available , though at some minimum cost it should surely make our travel more easy.
  • Entertainment on the Go: Entertainment could be by many ways, but on the simpler note we should have a small screen display on each compartment which may display a list of movie just as we have on international flights or may be a common movie should broadcast  across one bogie. This has a minimal cost but requires a lot post installation maintenance.
  • Quality Food: A major step is required for quality food to be served on the train. We have seen some unhygienic food served so i expect some private contract for the catering. Even the tea quality hasnt been maintained.
  • Verified Staff: It has been noticed many times that passenger finds it hard to verify the staff that whether he is a railway appointed or a random guy in the cloths alike railway staff. So may  be some system that could make it easy for passengers to identify railway staff on the go
  • Cleanliness: Of-course to some extent we the passengers are to be blamed  for the dirty coaches but may be we can have a on demand staff to clean our compartment while the travel with some charges, because sometimes in long journey its difficult to travel with dirt around but we dont mind paying few bugs and get it clean. By this way may be we can improve overall conditions.
  • Instant Quota: Though we have a Tatkal Quota, but we should also have some instant quota wherein a last minute travel can be arranged for which booking opens only 2 hours before with some high charges.

Though this all our points which i feel that should be prioritize for the betterment of our travel rather than expecting new travel options. There may be many other such suggestions, keep it coming the comments below.!! Lets discuss and get some idea what other things should helps our railway to improve. Until we dont consider as OUR we can keep it better. Government takes the initiative but we should follow it with true heart.


Disclaimer: All views mentioned are my personal and they are not intended for any one in person.



Unexpected Speed Breaker

Where it was expected that we shall just cross over the bridge of Expiry safely and without volatility, all of a sudden we got a big speed breaker where almost everyone touched its SL. Though yet road hasnt changed for the Nifty’s move, but it has surely gave a sudden jerk which has given a small injury to profits. As you all could notice in the attached graph, we are back on the support line which has been tested for the third time in recent past. A triangle pattern which was expected to be intact, has proved to be false breakout and after redrawing the patter, a Wedge could be marked out which could be brutal on breakout on either side. So again its time be cautious. And tomorrow we could have another volatile session. So after triggering SL of 7180 on my yesterday’s call, i recommend to wait till tomorrows close!!!  Safe traders stay away from the road.

Not a time to rest, traders!

Since many months traders havent made money on either side because volatility has been unpredictable. But since last few sessions, Nifty seems to be giving some signs of clear trend in near future. As i had mentioned before, 6869 support had been crucial as it was on 200 week average and also a support level based on Elliot wave. Now a bounce back is sure but whether this a relief rally or start of new rally, that we shall get a confirmation only when we close above 7500. But till then, for time being we have got a small confirmation for a rally on daily charts.  As you all could notice on the attached chart, blue line outlines a ascending triangle and it has given a breakout at 7204 with a small target of 7460. But for this weekly target we can assume it to be at 7363 where we have untouched gap and also a small resistance line. So for time being stay long on Nifty with tgts of 7363/7460 and stop loss of 7180.


Aviation industry is surely risky but a good bet

Airline industry has been one of the worst performing sector in last 5 years on our equity platforms, but now i feel that one should be surely taking a risky bet from current levels for a long term perspective and it could be multi-beggar. KFA grounding and Spice Jet liquidity crunch has almost brought scare for investors for this sector but recent restructuring in Indian aviation industry has been quite promising. If we take about particular companies, then new management of Spice Jet has been successful in bailing out company from liquidity crunch and management has also shown confidence on future of the company. Spice jet seems to have place a good order for new plans which is also positive for the guidance. Talking about Jet Airways, after it Etihad stake and closing of its low cost domestic carrier has provide beneficial as of now on their balance sheet. And Indigo Issue too has been successful on the D-street. So my gut feeling for this sectorial investment is strong.

Now lets talk about some primary numbers:

  • Revenue Passenger Kilometers

The RPK of an airline is the the sum of the products obtained by multiplying the number of revenue passengers carried on each flight by the distance – it is the total number of kilometres travelled by all passengers. So this numbers gives us a vague idea how air traffic has been in recent time. As in the graph, we could notice that last 3 years we have seen a increasing trend of RPK in india, which means more passengers have been travelling more kilometers which indicates sector revenue would have been increasing. This is surely a positive trend for the aviation markets and if we continue to witness such growth, we shall get  improving results.


  • Load Factor

Load Factor can be simply defined as the capacity utilization of airline industry. Looking at the beneath graph, we could see that Load factor across indian aviation sector has been improving since 2014. Though in 2015 we saw some slump in mid-year but that is considered to be off-season for airlines. Last two months of the year which is generally season as NRI visit increases has seen load factor at the highest level in recent time.

load factor

This sums up saying that airline company’s next quarter results should be the best as Load factor and the  RPK both have improved. Ofcourse there are many other factors to study before investing but a overview and mood seems to be improving in the industry and one should surely have atleast one of 3 listed airlines in portfolio for the long term!!

Disclaimer: This views are purely my research. Invest on my idea only after studying markets and stocks throughly. Take advise of your financial consultant before investing. And equity markets are subject to market risk.




Patanjali, a potential competition for FMCG Co.’s?

In a short span of less than a decade, Patanjali recorded a turnover of Rs. 2,500 Crores in FY15, higher than what existing FMCG companies had achieved over a decadeAccording to the industry data, it has a market share of 4%-5% (FY15) despite having fairly limited distribution. Patanjali has also gained considerable traction in the toothpaste category.

Patanjali Ayurved Limited was established in 2006 by Baba Ramdev along with an Ayurveda practitioner, Acharya Balkrishna. Although Ramdev baba does not own any stake in the company, he has played an important role in gaining brand’s visibility.

The company manufactures around 800 products and has expanded to a full range of consumer categories, from edible oils, biscuits, and noodles to toothpaste, hair and skin care products. It sells its products through clinics, wellness centers and outlets. The company partnered with Future group to sell its products through Future Group’s stores and has plans for joint manufacturing in future.

The exponential growth of Patanjali is attributable to increasing appeal of ayurvedic and ‘natural’ products, price discounts (10% – 30%), better quality, and a growing desire to consume Indian brands. It also has an advantage of being associated with Yoga guru, Baba Ramdev. The company stepped up its advertising and promotional spends and roped in Hema Malini as its Brand Ambassador. According to BARC, Patanjali’s advertisements were one of the top three brands advertised on television (Nov’15).

Hence, Patanjali is definitely an exciting development in the FMCG Industry. Patanjali has been a disruptor in the FMCG market. It poses challenge to FMCG companies like Dabur and Marico that focuses on natural products. Going forward, Patanjali might eat market share of the FMCG majors present in oral care, hair care and OTC (over the counter) products. The future may see price wars or new product launches to cope with the stiff competition. Bring it on! As we know the major FMCG players are not going to be quiet!

Why Invest in India?

Global economy scenario is a bit vague at current situation but this should be considered as an opportunity to invest for the long term, those who have liquidity. Am sure many of you are confused that where should we Invest? Answer is INDIA. It is not just because i am an Indian citizen but currently if we compare developed and developing countries, India has the most favorable factors to outperform in next 5 years. Now, you guys would say that if world economy is fragile, India would not grow too. But i am going contrary to this statement as i believe we have so many domestic factors that are going to lead our economy. I am trying to list down few points which i feel are positive points or may say booster to our economy.
    • Government with Vision: NDA in center this time is most differential with all past government strongly on one point which is, it has vision for changing India. I am not politically against or for any government, but what i feel different about this government is that it  has initiated many ways to change India at same time. Ofcourse previous governments too took steps to change india, but this time they are going with Digital world which is helping to reach out large pool of people at one time and also making work quit easy for departments to manage data. So biggest game changing for this government could be Digital India campaign, more than even any other change because it is connecting people and also its making  information available to citizens easily. With Make In India campaign, government is trying to support all sectors of India and its also boosting on Exports. I may go down to write endless pages, if i mention all the points of visionary government but in short to say,if we see even 35% change than current situation, its going to change India in alot better way. So i have faith in this government!!
    • Youth Population: As per the UNFPA’s 2014 report, India’s 25-30% of total population is Youth between 10-24 of age which i believe are going to spend the most in coming decades as they are going to be next work force who will earn. In terms of total population, India is the second highest and so a simple math would suggest that atleast we are going to stay in top 5 country to have youth population in next decade. Even as per CIA report 2015, India birth rate is far more than China, Australia, USA or say any other developed country. Considering this angle of economy, other factors remaining constant across countries, Multi national companies would surely choose India as its destination for manufacturing. To add to this, Indian Government, Led by Modi, has initiated a programme, SKILL INDIA to create a ecosystem to train labors across India through training partners. So am sure main blood for economy to prosper is always human and stats says India is going to be most preferred.
    • Change in Workforce: It could be considered a continuation of above point but there were two things which i wanted to mention here which was China, who has largest workforce, is losing in numbers where as India has added 366 million in last decade as suggested by articles in leading magazines. This could be the biggest example that youth population of our country is joining skilled labor more than agriculture. So this is surely changing our demographic. Secondly, women workforce is increasing in India which could increase demand of various products in next decade as they would have purchasing power. Until recent or even still many families have tradition of housewives but now as more and more girls are completing their graduation, they prefer to stay working even after marriage. Though still many families doesnt allow to work but thought is changing at rapid pace. This will surely push more women in labor market. Now how this is positive for India? Its simple logic…As now women would earn themselves, they dont have to be dependent on Husbands to fulfill their demands for luxury products. This  will raise demand for clothing, jewellery, cosmetic etc and the money will keep circulating in economy. So i Feel even this could play part in changing India.
    • Untapped Rural markets: As per the census report of 2011, India’s approx 68.84% population stays in rural while just 31.16% are living in urban. That number has improved from previous 72.19% in 2001 so we can assume that this number could max be revised to 60% in coming census . Which means still more than half of India is going to stay in rural in next decade. That also concludes that halve of our population is dependent on Agriculture. But interestingly, if you guys notice around you, we are witnessing major change in vision of rural people. Until before 2 decades, it was by default assumed by a farmer’s son that his future is going to be farming, but now the scenario is different. Now 50% of farmers want their children to be a doctor or engineer or even a chartered account. What has brought this change? Awareness!  Today Digitization has made it possible for information to be available at each and every corner of the world where there is Internet. As we are having largest pool of mobile users, even internet is reaching  each part of India, which is bringing awareness in Rural India. People there are getting informed of Education, Products, Jobs etc. This is creating demand of each and every type of products and services in Rural. As Food inflation is rising so is income of rural india. This states that when urban people are into somewhat liquidity crisis, rural people have purchasing power as money has been transferred to rural india by the way of food inflation and real estate inflation. On opposite, they havent spent at the same pace as they earned because they were unaware of spending option until now. But now Internet have educated them. In next decade they would demand say Electric appliances, Education services, etc more than urban in term of sales growth. So untapped rural markets is biggest advantage of India currently.
This were 4 basic points which are  creating biggest opportunity to invest in India for next 5-10 years. Ofcourse there are many other financial factors and commodity factors such as lower crude oil price which are also going to play crucial role for growth but that is common for many developing countries. While 4 points which i mentioned are unique advantages of India over developed countries and developing countries so i feel we should STAY INVESTED IN INDIA OR START INVESTING! Where and how should you invest within India, is upon you to decide. You may take advise of your financial consultant and work the best investment opportunity as per your goal. So my formula for next decade is I.I.I (Invest In India)
Disclaimer: All the views are personal and the actual figures may differ. I am not biased to any political view. Please refer to you financial consultant before investing on my idea. This is purely what i think.

Not a convincing close on Weekly Chart

Nifty had shown some high volatile characteristics last week but yesterday finally it did manage to close over 7205 which was acting as strong resistance throughout the week. Daily charts have seen a reversal confirmation BUT weekly charts havent given any strong chart pattern or candlestick pattern to show reversal except sustain 200 Weekly average at 6869.  I have also redrawn channel from the highs indicating last one year between the same by index. I believe we should trade between this channel for some more time. But if we witness this channel breaking support than we could achieve retrenchment level of 61.8% of long term rally which is at 6680 but thats too early to say. Looking at the derivative data it suggest that base for this expiry is formed at 7100 while 7350-7400 is the resistance range where we could see Nifty expiring. So now next week remains crucial and we wish that we can get some confirmation on weekly charts next week. For now risky traders stay long on stock specific!!

A myth: CPI and Nifty inversely related?

Its commonly believed by a trader that a Higher inflation means bearish trend in the market. That may be true for a day or 2, but interestingly i noticed that we are wrong! Attached graph is a comparative study between CPI and Nifty for last 10 years on QoQ basis. Green line is Nifty while other one is CPI ie., consumer price index or you may say inflation. As you all can notice that both the lines are trending the same direction except near bottoms and tops which clearly states that Inflation and Nifty are directly related on broader time frame. So now may be we can workout that inflation to some extent is needed for the growth of economy. If there is inflation more money would be spent by consumer which means large sum in circulation. More and more circulation of money in the market would divert extra margin or say extra profits to equity markets so logical it fits too. If u take recent example, we saw Nifty high in last march and since than we have seen decrease in Inflation too. Interestingly now in January we saw marginal rise in inflation which makes us believe that nifty low too can be near by or say in this quarter. Investors can now atleast buy partial portfolio at CMP. Can this theory be true, will check after we complete this quarter in March. Till then lets wait and watch!!