Time to look at the fertilizer stocks..

Well, we're witnessing yet another correction with the markets opening another 700 points lower in early morning trade. This came on the back of dismal services data in the U.S. The service sector reported a slump after nearly 4.5 years and investors across the globe fear that the U.S. as well as Europe are slipping into a recession at the same time.

The Fed rate cuts in the last 2 weeks, together amounting to 1.25 percent, have done little to ease the concerns of the investors. More robust need to be implemented if the Fed is to be successful in putting the U.S. economy back on the recovery path. Asian markets too have been trading lower odue to poor global outlook.

In the long-term, however, Asian markets stand to gain from the dismal performace of the world's economies. Who knows, during the course of the current recessionary period and the subsequent recovery, the center of power may shift to Asia!! Wild thought, but stranger things have been known to happen!!

Oh, and I almost forgot, with the Budget round the corner, its time to bild some position in the fertilizer industry. The fertilizer stoks have regained some ground in the last couple of trading sessions and have tended to outperform the market hsitorically, around the time of the Budget.. Look at parking some funds in Nagarjuna fertilizers...

Also, I expect sharp appreciation in the values of Neyveli Lignite & Deep Industries in the coming days! So, keep a sharp eye on these counters and continue tuning in to the SenseXXXational Ride!!

Reliance IPO money refunded!!

With the Reliance Power IPO money being refunded to QIBs (Qualified Institutional Buyers) and non-institutional buyers on February 1, I expect the markets to rise in the coming week due to increased liquidity and the cheap levels the markets are at the moment. Additionally, global sentiments seem positive at the moment and with the U.S. markets closing in the green in yet another session on Friday, chances of the Indian market opening higher are pretty high on Monday!

I would like to advise those investors with a bit of a risk appetite to buy a Call option (Strike price 5500, expiry 28 Feb 2008) on Nifty (lot size: 50 Nifty). The call option was trading at a price of Rs. 170 - Rs. 180 on Friday, towards the close of trading. It is likely to go higher on monday on the back of psoitive global sentiments. Still, I expect the market to move higher because 1) Refund of the Reliance power IPO money has provided investors with a lot of cash, 2) FII buying could provide a boost to the market. Historically, the FIIs have made 20% of their annual investment in Feb and FIIs were back in the thick of action on Friday. 3) Global sentiments coupled with average to positive Q3 results should help the markets stage a rally now, and finally, 4) Sentiments remain positive ahead of the 2008 Budget and with the Fed cutting rates by another 50 bps, I strongly believe that RBI too will have to follow suit, albeit with a lower rate cut.

So while you are busy reading this latest entry and analysing/digesting what I've said, I'll sneak across and warm myself with a hot cup of coffee!! Anyone interested in 1??

N.B.; Take whatever profits you get, the market may surprise negatively in the near-term and a lot of these so-called support levels will be tested if the markets face a down-turn.. Every rally is a time to book profits; currently not the ideal time to buy! Hey, also invest in the Reliance Natural Resources Fund. I apologise for the delay in bringing across this mutual fund to your attention! Risk-avoiding people should look to invest in Mutual fund schemes!