Bata India can move by alliance with reliance

Bata India is likely to adavance as Reliance Retail has entered into a strategic alliance with it to jump-start its footwear vertical. With this alliance, Reliance will get access to Bata’s 1,200 stores across the country. It is a win-win situation for Bata India too as it will get an exclusive corner in all Reliance Footprint stores.

Cements my move up by price hike

Shares of cement companies are likely to advance on reports that south-based companies may be hike prices by more than Rs 10 per bag by March. Hold on with cement stock for three to six months for a good returns.

Shipping Corporation can buy this level

Shipping Corporation can buy with medium to short term view. Shipping Corporation being the largest player with the government holding of 80% has not shown the kind of rise which it was warranted or maybe the kind of changes in the improvement of fortunes of the sector. sooner or later maybe in the last 15 or 20 days we have seen the informed buying coming in with more of investment base buying which will probably one’s the share comes out of the accumulation zone probably, it could show a upward from these level."

Short Selling in stocks market

The stock market has become the venue for Indians who have learned to manage their own portfolios online. For those who do their homework, the profits can be staggering. As a trader myself, I would also have to say that online trading is very enjoyable. It's as much as a hobby as it is a way to compound funds. Setting aside an hour a night to scroll through charts and assessing the psychological mood of each equity searching for that one stock that exhibits the down trend signs of a stock that has come to a top and is ready to drop in price really gets my heart pounding. That might sound contrary to conventional wisdom but it's what many traders have come to know as quick profits. While most investors are looking for the price of a stock to rise, some savvy traders are quite content finding a stock that is poised to drop like a rock. Who are these traders? They're called short sellers and they have discovered what seventy five percent of average investors have yet to find out. In BSE/NSE short selling available in intraday trading in equity and as well in derivative trading.

Selling a stock short is the exact opposite as buying and holding stock. It's profiting from a stock falling in price rather than the more traditional method of buying stock and profiting from the share price gaining in value. When one sells short they expect the share price to lose value and profit from the decline in price. Why would a trader want to sell a stock short? Well, one reason is a stock will drop in price about three times faster than it took to increase in price by the same amount. That equals faster profits. Another reason is traders can take advantage of all the moves a stock has to offer. Many stocks run in cycles due to various economic and seasonal conditions. Taking advantage of the advances in share price, as well as the declines offers the traders more opportunity to profit.

When a trader decides to trade stocks short they must open a margin account. When you sell a stock short, you are actually borrowing the shares from your broker. You are selling shares of stock you don't actually own. Let's say the current market price of ABC Company is selling at Rs.125.00 a share and you believe the price of the stock will decline over the next several weeks. You borrow one hundred(equity) shares of ABC and sell them at Rs.125.00. Since you've done your homework correctly, you watch as the price of ABC drops to Rs.100.00 a share over the next several weeks and you decide to take your profits. To close the short trade you buy the shares back at the lower price of Rs.100.00, satisfying your debt of one hundred shares of ABC to your broker. But instead of paying them back at Rs.125.00 a share, you are paying them back Rs.100.00 a share. Your profit is the difference of Rs.25.00 a share, or Rs.2500.00. (In the case of derivatives trading shares should taken as per lot size).

Why should you want to steal someone else`s stock market lesson plans?

First, let me tell you that a trading plan is only useful if you follow it. Following your plan will make you successful, yet many traders circumvent the stock market lesson plans that they have carefully created. They become emotional invested in a trade, to the point where they ignore all warning signs. Remember, when the market corrects itself, which it always does, no position is immune, no matter how strongly your ego may be tied to it.

Many investors have stock market lesson plans that watch as their portfolio values are cut in half or more, yet they will still hold their positions. They may fear being left out of a big gain, or be so deep in loss that they felt they couldn`t possibly sell at that point. But even if you believe that all positions will recover from their losses, and the truth is that not all of them will, this is a terrible way to trade.

When you first form your plan for a trade, you should consider what price or price range you think the stock is likely to reach. This is often called a target price, which gives some traders the wrong impression. A target price is not a price that the stock has to meet. A stock does not have to do anything. If you treat your target price as a goal, it can lead to many problems. Your target price should only be used as a guideline.

The target price helps you figure out your risk to reward ratio, and it gives you an exit point in your trade. At the least, it should give you a point where you`ll reassess the trade`s ability to continue to moving upward. But your trade may never reach your target price. Many market factors can interfere with its progress, and you may have set your target higher than you should have. Since there`s no way all your trades will hit your price targets, it is a good idea to sell half your position at a more conservative target. Routinely taking profits will reward you in the long run.

There are a number of things that can interfere with a stock`s movement and force you to close your position sooner than you`d anticipated. Your stock market lesson plans should cover all of these possibilities, but here are some reasons that should always prompt you to close a position:

1. The end of a trend. All trends end some time, and you should be prepared for this.

2. The stock`s upward movement has slowed or been abruptly broken, ending its momentum.

3. The stock is approaching a major psychological barrier, perhaps reaching 100 rupeers or 200 rupees a share, which should have been anticipated in your plan

4. The stock is about to reach a resistance level it has been unable to break through before.This technical barrier should also have been anticipated in your plan.

5. A sudden market wide decline, or the threat of one, or some other serious uncertainty,which leads to unsafe market conditions.

Exiting a losing trade is not a big deal. Ending a position whether or not the stock reaches its target price, in accordance with your stock market lesson plans, is good trading. The best traders would rather lose a small profit than take an unnecessary risk. You don`t have to win on every trade; no one does, and it`s dangerous to try. In fact, by limiting losses, a good trader can be profitable overall, and make money on only 40 percent of his trades. Cut your losses and start fresh with something else when you need to. You`ll be happier, and you`ll make much more money.

Videocon Industries set to be perform

Videocon is investing around Rs 20,000 crore on building 3thermal based power plants with total power generation capacity of 5,000 MW in next 5-7 years. These plants will be set up at West Bangal, Chattisgarh and Gujarat. With the debt-equity ratio of 4:1 and giving price to book value multiple of 2.5 its equity value comes to around Rs 10,000 crore. This can lead the stock to perform well in long term.

Spice comm. & srei infrastructure and Vivimed looking good

Mobile services provider Spice Communications is set to sell its tower arm to Srei Infrastructure. The deal is estimated to be worth around Rs 500 crore. Following the deal, the towers from Spice may be added to Srei’s subsidiary Quipo Telecom, a stand-alone tower company. Spice has also said that it was availing loans for up to $400 million from Hong Kong & Shanghai Banking Corp and another $410 million from China Development Bank for expanding its networks in Karnataka and Punjab, the two circles where it currently offers mobile services. Shares of Spice Communications and Srei Infrastructure are likely to be in action on tower business.

Vivemed shares are likely to flare up on reports that the Hyderabad-based firm is close to buying the cosmetics and related ingredient manufacturing division of a German multinational specialty chemical and pharmaceutical company. Vivimed will add to its fold, three units of the German company, located in Germany, the UK and India

Indian Market may remain Bullish by FII’s entry

In the last four trading sessions since December 17, FIIs have sold equity worth $1.28 billion (Rs 5,156 crore). But the sensitive index fell by just 441 points during this period to close at 19,162 on Friday as retail investors lent support. On Monday, however, the index improved by 692 points to close at 19,854. indications are that it turned buyers on Monday by retail investor. There is no indication of FIIs to buying any. Retail investors are now emerging as important players in the equity markets, supporting BSE sensex to remain in the range of 19,000 to 20,000 points, despite foreign institutional investors (FIIs) preferring to sell out. It stated equity market is no more completely in the controll of FIIs as earlier. In this bull run retail investors have a big hand to run market as BSE today's closing @20,192.52. This clearly suggest that retail investors were big time buyers, which prevented any market fall. In such a scenario the sensex remain bullish if FIIs when reenter in to markets over next year. And also with quarterly results in next month and central budget in February.

Do cautious trade on govt words

“ The government said on Tuesday that the regulatory framework in the country was stronger than ever before but investors should not run after highly priced shares and instead look for antecedents of company and promoters.”

"I have been urging upon that investors should not go merely after price, they must look at the value," Corporate Affairs Minister Prem Chand Gupta told a day after his ministry issued public interest advertisements warning investors not to be swayed by misleading claims of companies trying to tap capital markets.

Asserting that investors' protection was highest on the priority list of his ministry, he said, "In the past, millions of investors have been duped by fly-by-night operators (that flooded the market with their IPOs). But the regulatory framework is much stronger today than ever before."

Gupta, who had launched a concerted drive against the vanishing companies after taking charge of the ministry that earlier operated as a department under the Finance Ministry, said, "The UPA government has taken several concrete measures to protect the interest of investors."

Two months ago, he said, the ministry observed an investor awareness month to educate investors in remote areas. The Institute of Chartered Accountants of India and Institute of Company Secretaries of India also supported the programme.

Commenting on buying frenzy in stock markets which pushed up the BSE Sensex by almost 700 points on Monday, he said, "I have always being urging upon the investors to be careful. Before they put their money in any company they must satisfy themselves about the company and its promoters."

Trend Trading: Follow The Momentum, Make The Money

Many investors who feel that the trend is their friend and seek to gain from it choose the particular method trend trading in stocks among the large number of ways of investing in stocks or trading in stocks.

The trader should select one stock or a group of several stocks to focus on, just like he would with any other investment strategy. Factors to take into account include market movement and trading volume. After the trader selects a stock, he should analyze its price movements. To qualify as a trending stock, it must be moving in one direction continuously over a set period of time. This depends on the period of time. Short term trend traders can use days or weeks, but for long term trend trading, months or years are better.

When examining price movement in trend trading it is important that it display momentum in a particular direction. The direction need not be only upwards, it can be either up or down as long as it is a continuous trend in one direction. The expectation is that the price of a stock, which has trended upward for a few days, will continue to go up over the next few days. While if the trend is downward, the momentum should continue downward.

After the trend in a particular stock is identified, you can purchase the stock at the current price and hold it for the duration of the trend. When the upward or downward trend reverses direction, the stock should be sold without much delay. You should not continue to keep the stock even after the reversal there is a risk of not realizing the notional profits, not to mention the chances of actually incurring losses.

The time frame is also an important principle in trend trading, and one must stick to it. Therefore if you are buying a stock on the basis of a monthly trend, you must track its performance based on monthly closing prices, so any time a fall in price is registered within a month it should be ignored. So if the price fluctuates weekly, you need to ignore it and stick to the monthly trend. Similarly if you are buying a stock on a weekly trend, you should be ignoring daily ups and downs in price and looking only at weekly price.It is a myth that only short-term traders indulge in trend trading. Those investing in stocks for a longer time frame of months or years too can apply this method of stock trading to their advantage. Whether you are investing for short term or long term, it is certainly one of the attractive choices available to you. However, this method requires that you monitor the market on a continual basis to take advantage of it. It is not for persons who buy a stock and forget about it because they are too busy with their career or other preoccupations.

Three Investment Lessons To Learn From Warren Buffet

Submitted By: Joel Teo

If there ever was any investor that one should pay attention to that would be the infamous Warren Buffet a stock broker who began working his father’s brokerage at a young age of 11 when he made his first stock purchase. That’s why these three investment lessons to learn from Warren Buffet which are so valuable.

Be a value investor is one of three investment lessons to learn from Warren Buffet which are so valuable. Buffett’s philosophy is a from the Benjamin Graham school of Value investing. A value investor will look for securities that have unjustifiably low prices attached to them based on intrinsic value which can be determined by evaluating the company’s fundamentals.

International trading strategy is number two of three investment lessons to learn from Warren Buffet which are so valuable. Now let’s have a look his international trading strategy. Trade deficits occur when a country has a growing economy so these stocks are a wise move.

There is not danger because as the economy grows so do new assets that foreigners can invest in and buy in which is part of the three investment lessons to learn from Warren Buffet which are so valuable.

Your international investments can reap you excellent profits as the country grows and develops and the dollar value grows through investments and developments. That’s why this is part of your lessons to learn from Warren Buffet which are so valuable.

Costs opportunity is number the three investment lessons to learn from Warren Buffet which are so valuable. According to Buffet you must look at all your costs as the cost of opportunity. Don’t evaluate your losses for the year when the returns of that investment won’t be seen for a considerable length of time.

There are a many investors that have excellent knowledge to share with you but we have shared three investment lessons to learn from Warren Buffet which are so valuable because he is the best making more money than anyone else in the world.

Warren Buffet is an investor that the world pays attention to, which is why we have shared three investment lessons to learn from Warren Buffet which are so valuable. . They will start you on the right track to your future wealth. If you are interested in investing and making money use these three investment lessons to learn from Warren Buffet which are so valuable.

Day Trading Techniques

Day trading is a very risking business to involve in, it can not stop people from doing what is good especially in terms of profit.

There is so much to remember and to take for consideration for one to successfully trade in day trading. Some points to be considered before you involve in day trading.

Ask yourself

You begin by asking yourself how much money I need to start trading. This is the very basic question one must ask before entering into any business. Your capital will determine how far your business will go. In some versions the questions goes like this; how much capital do I have and willing to stake? The last question is more direct and somewhat personal but satisfies reality. Do not push too hard on something that is more than you can bear.

CAPITAL

In day trading at least Rs.10,000 capital is just enough to start trading. You can also start higher than Rs.10,000 and it is absolutely on your own preference. However, bear in mind that having a little capital would mean less profit and also less loses if in case the trade turned out bad, same thing, having bigger capital would mean more profit and the sad part you may also lose big amounts.

In general, no exact ceiling for the amount of the capital one needs to start. It will always depend on the person going into business, his objectives and preferences.

SECURE

Next thing you must do is to put things in order. Secure your capital before making any investments. By securing your capital you will lessen or even eliminate the chance of losing. You can do this buy analyzing very carefully the movements of the stock and betting confidently on the gaining stocks. Do not rush on buying without thinking and analyzing the pros and cons of the stock are to buy. Always make sure that your bucket will not run out of rupees.

KNOWING YOUR LIMITS

Knowing your limits is one of the most effective ways in preserving your capital while consistently gaining. You have to evaluate yourself from time to time as to where have gone so far. Do not think that you are a good trader and that does not make you a loser. The control of he stocks is not in just depending on your movements but also the movements of other traders and the stock itself. So no matter how hard you try when the flow does not go with you, you can not claim you’re the best trader.

CONFIDENCE

You also need confidence in trading your stocks. Buying or selling stocks with doubts is not a good sign for a good trade. No matter what will happen, always show confidence in your trading disregarding the hearsays or whatever disturbances you may encounter. Confidence also talks about your firmness in decision making. When you decide to sell or buy something, put confidence in it by showing a positive attitude toward the decision you have made.

PLAN

Make a plan before going in into the flow. The entrance and exit plans are very important so you may not end up loser. By doing so, you can easily tell whether you are losing or gaining. If your losing, with plans you can easily exit compromising only little of your capital and when you are gaining you can continue to win until the deal closes.

In day trading, though risky, your rise and fall mainly depends on you. Like any other stocks trading, day trading requires same perspective and attitude to successfully gain profits. By any means, perseverance and good trading attitude the best capital you must not lose.

What is day trading in relation to trading in the stock market?

A day trader is a trader who quickly buys and sells shares of stock on the market, with the hope that for the very short time, usually seconds or minutes, the stock will continue up or down. This results in quick profits for the day trader when it is done successfully. Day traders are usually using money that is borrowed, with the hope that using leverage will increase their profits, but this creates a much higher risk as well.

The financial losses that occur every day from day trading make this an extremely risky venture, and most day traders never reach the point where they reap large profits from their ventures. In the first few months as a day trader, it is normal to suffer huge financial losses, so only use risk capital for any day trading. This is money that you can afford to lose. Day traders do not invest money into stocks, they watch their computer for stock that is on an upward or downward move, buy the stock hoping that this trend will continue, and then sell the stock very quickly. If the trend continues while the day trader owns the stock, then they make a profit from the sale that the trader keeps.

The risks involved in day trading can be substantial. By using borrowed money for leverage, day traders take a risk that the market will turn, which could leave the trader broke and owing money that was borrowed. This is a very real risk, and it is important that day traders understand that there is no guarantee or security net in day trading. Day traders do not keep possession of stocks overnight, because the price of a stock can fluctuate widely by the next day, and this can lead to even bigger losses in the day trading market.

Day trading is an extremely risky venture, as well as expensive and time consuming. Day traders watch their computer screens the whole time the market is open, watching for stocks that are rising or falling. The day trader purchases the stock hoping that the trend continues for a short period, then they sell the stock quickly. A bigger potential for profit is realized by using borrowed money as leverage, but this also greatly increases the risks as well. Day trading should only be done with income that can be lost without any adverse effect. The day trading market has a huge amount of risk involved, and severe financial losses are very common in the first few months.

Advantages of Stop Loss Order

• It can prevent the small loss from becoming a disastrously large one.
  
• It safe you from the unexpected news which can come out of the blue and dramatically affect a stock's price.
  
• It saves the individual from mental shock and gives emotional support also.
  
• The beauty of the stop-loss order is that it costs nothing to implement. Your regular commission is charged only once the stop-loss price has been reached and the stock must be sold.
  
• It gives the general market direction and investment psychology of the market.
  
• The proper use of Stop Loss Techniques is crucial to preserving your profits.
  
• Safe and secured investment of funds.
  
• It gives the deep knowledge of financial soundness of the stock of different company.
  
• You don't have to monitor on a daily basis how a stock is performing, especially handy when you are on vacation or in a situation that prevents you from watching your stocks for an extended period of time.
  
• It gives the trader greater flexibility that may fit his trading style where adjustments can be made according to changing market conditions. This requires thorough understanding of price action to be able to use this flexibility.

Sugar tastes more sweet

The sugar stocks are in a sweet situation following the Allahabad High Court order that has asked the UP government to scrap SAP for cane this year. The Allahabad High Court has asked the UP government to pay Rs 81.18/quintal for cane this year. Effective cane price for UP Mills is at Rs 90.19/quintal. On the back of this news most sugar stocks have to witness life highs; like BajaJj Hindustan, Balrampur Chini, Shree Renuka, Andhra Sugar, Oudh Sugar, and Dhampur

Reliance Communication expansion may move the stock

Reliance Communications will invest Rs 800 crore to roll out a telecom network - fixed and mobile - in Uganda, a country in Eastern Africa. The company has bagged a licence to be the African nation’s sixth telecom operator. Once the network is in place, RCOM in Uganda, will compete against MTN, Uganda Telecom, Hits Telecom, Celtel and Warid Telecom. The company plans to launch services in Uganda by Q3 in 2008. Shares of Reliance Communications may move up on expansion plans.

Tata Chemicals expansion

Tata Chemicals is planning to increase its urea production capacity to around 1.2 million tonne per annum by September 2008, say reports. The share may witness some movement on expansion plans.

WHY TRADERS DO NOT SELL OUT STOCKS AT HIGH LEVELS

In every bull market many traders have enormous profits, but fail to get out at the right time. They let stocks decline and sometimes wipe out 50 to 100 points' profit before selling out. There must bea reason for this. We have heard much talk of Wall Street psychology and some writers have saidthat the 1929 Wall Street panic was due to mob psychology. This is largely true, but mob psychology would not have caused the panic if previously mob psychology had not caused the big bull market when everybody bought, got over-optimistic and failed to get out with big profits. people do get hypnotized and do not realize what has happened or what is going to happen until it is too late, which is one of the reasons why they do not sell outstocks at high levels. If investors and traders would only learn to follow up their profits with a stoploss order, which would get them out with a good part of their profits when the decline starts, they would be much better off. What was the use of this man allowing U. S. Steel, which he had bought at the right time, to decline over 100 points and wipe out the biggest part of his profits? Of course, after Steel was down 20 points he did not believe that it would decline 80 or 90 points more; if he had, he would have sold out. Remember, it is not what you believe, think or hope that counts, but it is what the market does, therefore you must have some rule to protect your profits, once you havemade them. I know of no better automatic protection than the stop loss order.

About Market Correction

It is reverse movement, usually downward, in the price of an individual stock, bond, commodity, or index. If prices has been rising on the market as a whole, and then falls dramatically, this is known as a correction. As long as you see the patterns acting as continuation patterns, the overall health of the market is strong. Failures by continuation pattern can forewarn of a more substantial market correction on the horizon.

“A relatively short-term drop in stock market prices, generally viewed as bringing overpriced stocks back to a level closer to companies’ actual values.”

When prices fall too fast, a market often retraces part of the trend move. often the degree of retracement is measured utilizing a Fibonacci ratio . In the past, our markets witnessed a drastic fall, owing to the pull out of the foreign institutional investors (FII). The recent political uncertainity and bomb blasts also affected it.

The investors in these markets form consortiums among themselves such that, a group of these investors are able to make changes in the overall market indices. FII’s are one such group. When they think, the time has come to book profits; they take up a selling position. This causes the market to fall and when the market falls, these groups again buy the shares; thus making profits again out of their buying back the shares.

This phenomenon is possible only if the group’s transactions can exercise a considerable influence in the concerned market. Market sentiments play an increasingly important role in the fixing of share prices. News such as decrease in interest rates, good rainfall, etc promotes investment thereby raising the price of the indices in the process. But bad news such as a bomb blast or an earthquake quake the investors see, thereby lowering the indices.

Advantages for those:
Who invest conservatively, to the exclusion of stocks whose performance depends on the successful execution of a very aggressive growth strategy.

• Who invest primarily in stocks that are not dependent on the American Stock market.
  
• Who focus on rapidly growing industries and industries benefited by long term shifts in global economics.
  
• Convertible preference shares could be the right investment for protection against potential market correction
  

Markets go up and they go down, they have to, in fact. Because if shares rose in a straight line then everyone would put their savings in the stock market...and that would mean no opportunity for shrewd investors to get in ahead of the crowd. Those who have the nerve to invest in shares are rewarded for our daring that must mean volatility and short-term losses even on the strongest positions, so the investor must react with the same equanimity to any move in the broader stock market index, whether it goes up or down.

Disadvantages over ordinary shares:

1. Limited exposure to capital growth.

2. Often do not hold right to vote.

Over Fixed Interest Investments:

1. Relatively less attractive in a rising interest rate environment.

2. Not completely sheltered from market volatility.

3. Higher risk.

4. Extensive conditions can be complicated.

5. Payment of brokerage and stamp duty.

Winning and Loosing in the stock market

If we ask someone to explain the meaning of the word 'stocks' then many people will narrate their painful experiences to narrate. Stories abound of how people have had their life savings wiped out overnight. Or money they have borrowed to buy a 'sure, hot stock' was lost when the stock suddenly took a nose dive. And if ask the same question to other people who succeeded in stocks they will answer, the stock market is an excellent place to build your money over time. The returns on these investments are far higher than other investment types. You can save wisely for your retirement and build your wealth.

We will see both the question that why people loose money in the stock market and why and how people succeed in stock market.

Firstly, we take Why people loose money in stock market?

Investors can lose quite a bit of money if they don't understand how unpredictable share prices affect their wealth. In the simplest sense, investors buy shares at a certain price and can then sell the shares to realize capital gains. However, if the share price drops dramatically, the investor will not realize a gain; in fact, the investor will lose money. The stock market being a dynamic place the prices of shares go up or down. Take for example suppose that an investor buys 1,000 shares in a company for a total of Rs.1, 000/-. Due to a stock market crash, the price of the shares drops 75%. As a result, the investor's position falls from 1,000 shares worth Rs1, 000 to 1,000 shares worth Rs.250. In this case, if the investor sells the position, he or she will incur a net loss of Rs750.• Investors need to keep track of the company that they are invested in. If there is some reason due to which the company may not be able to survive then you should not be a part of that company. But if you still continue to own part of such a company then you lose your money.

The way the stock market works is that there are a huge number of companies represented by stock investments, something like hundreds of thousands. Some are tiny and high risk with no money in cash, and some are big and high risk, and some are big and low risk. The low risk companies have good management, lots of cash reserves, and a lot of products selling well. It takes time for products to make money, during this time the stock can go up and down. If you purchase the stock when it is up and you don't know anything about the stock market and the stock goes down temporarily, then you could panic and sell without knowing the facts, then the stock goes back up, but you have already and lost your money.Don't invest in what you don't know. Don't risk money you can't afford to loose. Know the investments you are buying--research, read, and study them before you buy them, or you could end up loosing a lot of money fast. Individual stocks require a lot of time and attention, and knowledge if you are going to keep them comfortably for the long term. An alternative would be to research a simple money market account or an income mutual fund. Sometimes it takes years to make money on individual stocks; if you are already real old it doesn't usually make sense to buy them at all.

Secondly, why people succeed in stock market?

Proper knowledge to Pick Your Market Investment Strategy:

Decide on the time frame and the general strategy of your stock market investment. This step is very important because it will dictate the type of stocks you buy. Suppose you decide to be a long term investor, you would want to find stocks that have sustainable competitive advantages in the market along with stable growth. The key for finding these stocks is by looking at the historical performance of each stock over the past decades and do a simple business S.W.O.T. (Strength-weakness-opportunity-threat) analysis on the company.

If on the other hand you decide to be a short term investor in the market, you would like to adhere to one of the following strategies:

a. Momentum Trading. This strategy looks for stocks that increase in both price and volume over the recent past. Most technical analyses support this Market trading strategy. My advice on this strategy is to look for stocks that have demonstrated stable and smooth rises in their prices. The idea is that when the stocks are not volatile, you can simply ride the up-trend until the trend breaks.

b. Contrarian Strategy. This strategy looks for over-reactions in the stock market. Research shows that the stock market is not always efficient, which means prices do not always accurately represent the values of the stocks. When a company announces bad news, people panic and price often drops below the stocks fair value [i.e. it is cheap]. To decide whether a stock over-reacted to a piece of news, you should look at the possibility of recovery from the impact of the bad news. For example, if the stock drops 20% after the company loses a legal case that has no permanent damage to the business's brand and product, you can be confident that the market over-reacted. My advice on this strategy is to find a list of stocks that have recent drops in prices, analyze the potential for a reversal (through candlestick analysis). If the stocks demonstrate candlestick reversal patterns, I would go through the recent news to analyze the causes of the recent price drops to determine the existence of over-sold opportunities. [Most people make the mistake of buying when prices are high and selling when they are low this method allows you to invest in the stock market when prices are low and sell when stock prices are high.

Research Individual Stock Market Selections

Conduct market research that gives you a selection of stocks that is consistent to your investment time frame and strategy. There are numerous stock screeners on the web that can help you find the right Stock Market investments to fit your needs.

Diversify Your Stock Portfolio

Once you have a list of stocks to buy, you need to diversify them in a way that gives the greatest reward/risk ratio. One way to do this is to conduct a Markowitz analysis for your portfolio. This type of market analysis will give you the proportions of money you should allocate to each stock. This step is crucial because diversification is one of the free-lunches in the investment world.

These three steps should get you started in your quest to consistently make money in the stock market. They will deepen your knowledge about the financial markets, and will provide you with a sense of confidence that helps you to make better trading decisions for your stock market investment portfolio.

Are you a Trader or an Investor?

It's Important to Know the Difference between trader and investor

Are you investing in a stock or a company? That may sound like confusing question, but it is an important distinction and can get you in trouble if you don’t know the answer? First, let’s be clear that either answer is okay. The problem arises when investors confuse one with the other or start out investing in a stock, then change their minds when something goes wrong.

If you buy a stock:

• You are buying because you sense a price movement for some reason (through technical analysis, market/sector news, and so forth)
  
• You are interested in profiting from a price movement and, most likely, selling and moving on to another stock
  
• You have no real interest in the company behind the stock other than it is in the right place at the right time
  

If you invest in a company:

• You have done a thorough analysis of the company and believe it has long-term growth potential
  
• You understand what the company does and its position in its market
  
• If the price drops, you know why and can determine whether this is a short-term situation or a change that will have a long-term impact on the stock’s price
  A person who buys a stock is more precisely a trader, while a person who buys a company is an investor.

A trader may not hold a stock very long or may hold it a long time, depending on its performance. An investor buys a company with the intent of holding on to the stock for a long time.

When things Go Bad

As long as the stock’s price is performing well, neither the trader, nor the investor has much of a problem. However, when the stock’s price starts falling, that’s another matter. The smart trader has an escape plan in place to prevent small loses from becoming big loses. The trader has no emotional attachment to the stock, so getting rid of the loser at a predetermined point is easy. Many traders find that dumping a stock when it has fallen 7% or 8%, a good way to keep loses small. If you set your sell level higher, you are in danger of letting a normal market blip trip your sell signal, only to see the stock and market rebound. The problem arises when the trader decides they really like this stock and don’t want to give it up so easily. In other words, they’ve quit being traders and become investors.

The Problem

The problem is they usually don’t know enough about the company to make intelligent decisions about whether to hold the stock or let it go. They are no longer smart traders and they aren’t smart investors. Any decision they make as an investor at this point will be a guess.

The investor is probably better off when things go bad, but only if you have the courage of your convictions. If the stock price drops, reassess the company and the market.

Did you miss something? Has something changed? Or is now the time to add to your holdings?
Don’t jump on the “sell at 7% loss” rule if you truly believe in the company’s long-term potential. If you become a trader at this point, you are robbing your future.

Conclusion

It is okay to be either a trader or an investor, just don’t try to be both with the same stock.

is it safe to invest in IPO

When a company first comes to the market in its initial public offering, it can generate a great deal of interest from investors, making it an attractive time to invest, but in general, the question of whether it is safe to invest in a company at IPO will depend on the perception of its market value.

Typically, the IPO is the only time at which the share value of a business is fixed. A business has to go through a number of steps prior to IPO to establish its long term security, and the launch price of the stock will be determined by economists and accountants in order to strike the best balance between the amount of money the business needs to raise, and its actual value, which relates to its assets and profit forecasts.

Because the market does not set the price of an IPO, it is a price that is subject to enormous fluctuations as soon as the shares go on sale. Depending on whether investors decide that a company is worth putting their money into or not will determine the direction that the share price takes over the first few periods of trading.

If a business is seen as a good risk, then the share price will rise above the IPO valuation as investors are drawn in, while if it is seen as being overpriced, then the value will fall as the stockholders are forced to lower their prices in order to sell their stock.

It can be difficult to gauge whether a business will rise or fall in value at its IPO, although there are a number of indicators in the period running up to the date that can give you an excellent insight into whether or not to get in early.

In the case of large businesses, their IPO will be a high profile event, which will inevitably attract a large number of institutional fund managers as well as smaller private investors to put their money into the business, and prices will tend to follow an upward trend in the first few sessions as the market value is adjusted to meet the interests of the market forces.

The performance of smaller companies at IPO is much more difficult to predict. If they are seen as being a well run and profitable business in a growth area such as telecommunications or technology, then they will generally rise in value for the first few sessions, in which case it is essential to get in early in order to get the best price and take advantage of the initial rises, whereas, a business that is seen as being in a static industry with long term potential, but short term difficulties, it is advisable to wait for the price to fall before putting your money in to avoid the initial drop in value.

On the whole, provided you are able to adopt a flexible and fluid approach to investment, and can put money in at a time that suits you, as well as having the ability to get out at the right time, investing in an IPO need not be a high risk move, and can offer significant rewards, however, this requires the ability to see beyond the marketing and recognise potential for growth and losses, as well as doing the research to back up your decision making process.

IT sector attractive now

Rupee growth looking to be sustain these levels. IT stocks have seen good bottom formation and can be accumulated now as they are likely to show a turnaround soon. The entire IT sector is attractive right now and one can buy good stocks at these levels as the sector is likely to witness a bounce back. In this pace, Zensar Technologies will see good appreciation in the short and long term. As well as top leading stocks also.

Bharti Airtel, Idea, Vodafone enter tower biz JV

Bharti Airtel, Idea and Vodafone have entered into a JV for tower business, Bharti and Vodafone will own 42% each and Idea will own 16% in the tower joint venture. Bharti, Idea and Vodafone Essar have formed a combined Independent Tower Company of India. Leading GSM players will combine to form their own tower company. This can lead telecome stocks to move a huge surprising returns. Good to look major companies to perform.

inflation roll in stock market

INFLATION:

"The rate at which the general level of prices for goods and services is rising".

There are many varying measures of inflation in use because different prices affect different people. The most widely known indices are the Consumer Price Index (CPI) which measures the change in nominal consumer prices and the GDP deflator which measures inflation in new products and services created.

INFLATION EFFECT`S ON STOCK MARKET:

Understanding inflation is crucial to investing because inflation can reduce the value of investment returns. Inflation affects all aspects of the economy, from consumer spending, business investment, and employment rates, to government programs, tax policies, and interest rates.

It is because of the inflation that share market has collapsed, it is bound to affect the investors. In fact, the way the share market was going up was itself creating doubts in the minds of the people about its real growth. When the market crossed 15,000 points nobody was able to explain the logic of it. So also when it reached 20,000 points, it remained unexplainable. The happenings in the share market were certainly a cause of concern. The government ought to have looked into the factors when the market started rising all of a sudden. However, stocks are still a good hedge against inflation because, in theory, a company’s revenue and earnings should grow at the same rate as inflation over the time.

More importantly, inflation robs investors (and everyone else) by raising prices with no corresponding increase in value.

You pay more for less.

This means company’s financials are over-stated by inflation because the numbers (revenue and earnings) rise with the rate of inflation in addition to any added value generated by the company.

"The more cash or cash equivalents you hold, the worse inflation will punish you. A Rs.100 under the mattress will only buy Rs.96 worth of goods after a year of 4 percent inflation".

Inflation erodes your purchasing power and retirees on fixed incomes suffer when their nest egg buys less each passing year. This is why financial advisers caution even retirees to keep some percentage of their assets in the stock market as a hedge against inflation.

NTPC to be geared up

State-run power producer NTPC to set up a 1,320 megawatt power plant in northern India through an equal joint venture with a local utility. it had signed a memorandum of agreement with Uttar Pradesh Rajya Vidyut Nigam Ltd to implement the project. its board had approved investment proposals worth 72.4 billion rupees, including for a new power project.

It will spend 54.59 billion rupees to build a 1,000 megawatts (MW) power plant in Maharashtra, The company said it would invest up to 11.88 billion rupees in a subsidiary, to help build a 1,000 MW plant in Bihar.

NTPC would also spend 5.94 billion rupees to upgrade its existing power plant in Gujarat, also in western India.

It looks more promissable from these levels to give a good returns.

The Stock Market Is A Board Game

As a kid, have you ever played the board game Monopoly? This is a game that deals with properties, banks, infrastructure, and millions of colorful Rupees.

Like in Monopoly, the stock market is a game in which you have to decide the buying and selling of your properties. Although in the case of the trading business, you are making stock market decisions.

The money you collect in Monopoly when you have circulated the whole board game would be the dividend or the payment in the stock market. The amount of the money you collect would be determined by the properties you have in the game. Just like in the stock market, the more shares you have, the larger amount of money you would be given.

When you are getting bankrupt in the game of Monopoly, you have the power to sell your colorful houses or building when you need to regain your finances. Just like in your stocks, when the market falls, you have the authority of which shares to sell out and which shares to retain.

In winning the Monopoly game, you are obliged to keep your properties before the construction of your houses and hotels. You would lose to your challenger if you sell these properties to him even for twice the normal price of your property. Just like in the stock market, making lots of money does not mean you are successful in what you’re doing. In order for you to win with your stocks, you should be able to double your property to give you a higher dividend of shares.

In playing the board game, you need an opponent to start the game. It’s your opponent’s job to prevent you from owning many properties and collecting large amount of money from him and from the bank. Just like in the stock market game, there are also factors that prevent you from the success of your shares. These don’t necessarily have to be other investors, but it could be the taxes you are obliged to pay or the interest of your stockbroker from your dividend.

Playing the game of the stock market could be done even with just a little amount of money. Just like in the board game, all you have to own are colorful play-money for you to own properties and collect more money in the future. Although the trading system could be compared to the board game, you should take the stock market seriously. Why? Because this is real life and real money is at stake.

Essential Qualifications for Trading

PATIENCE
Patience is a virtue, especially in the stock market. Acquire it if you can. You must have patience to wait for the right opportunity to come, and not be overanxious and get in too soon. Once you buy or sell a stock and it starts moving in your favor, you must have patience to hold it until there is a goodreason or sufficient cause for closing the trade. Never close a trade just because you have a profit; do not become impatient and get out for no real reason. Every act, either in opening or closing a trade, must have a sound basic cause behind it. Hopes and fears must be eliminated. There is no use selling a stock because you fear it is going down, nor buying it because you hope it is going up.Look at your charts and see which way the trend points and follow it. If no definite trend is shown, use patience and wait.

NERVE
Nerve is just as essential as patience; in fact, nerve is the equal of capital. In getting my experience, I have been broke over 40 times, i. e., I have lost all of my money, but there never has been a time yet when I lost my nerve. Years ago, when I was experimenting and working on methods for forecasting the market, I would get in the market wrong and lose all my working capital, but I never let it get my "goat." I studied very carefully how I made the mistake and what the cause of the loss was. In this way, I profited by every mistake and loss, and was enabled to perfect my method of forecasting and trading so that I could make a success. Looking backward brings nothing but regrets. I always believe in facing the future with nerve and hope. But let the nerve and the hope be based on some sound principle that will prevent costly mistakes of the past. During my career I have seen many traders who had made one mistake afteranother and suffered severe losses, and still had some capital to work with but when an opportunity appeared, they lacked the nerve to act. In cases of this kind, the nerve would have been more valuable than capital.

KNOWLEDGE
In the early part of my career I made some great success, and what might be called lucky strikes. I made a lot of money easily and then I spent or lost it easily. But I did not give up or lose my nerve. I always figured that I was a better man after each reverse, because I had acquired experience.Experience is the only school to learn in and the burnt child is the one who knows the pain from having put his fingers in the fire. Mistakes are all right and hard to avoid. They are good for us, because if we profit by them, they prove valuable. But it is wrong to make the same mistake the second time. Therefore, use every mistake as a stepping stone to progress; analyze each mistakeyou make and the cause of every loss, in order to avoid repeating the same error in future. With each experience I had, good or bad, I accumulated knowledge, and after all, knowledge is the greatest power of all, for capital will always come to knowledge. Several years ago a brokerage failure occurred suddenly and unexpectedly, and I lost all of my money. To the ordinary man's wayof figuring I was broke, but as a friend of mine expressed it at the time, "He may be without cash, but the knowledge that he has of the stock market is worth hundreds of thousands of dollars and in a short time he will turn that knowledge into cash." I did come back quickly in a few months' time on a small capital, because I had a greater knowledge of the stock market than ever before, andknowing, by experience, that I had a method based upon mathematical science which could be depended upon to forecast the stock market, I had the nerve to pyramid and press the market hard when my science showed that I was on the right side. What would have been the result had I been without knowledge and only filled with hope? I would have stayed broke, as other traders do whofollow the fairy phantom of "hope" .

HEALTH AND REST
Good health is essential to success in any line. It is one of the great assets for success in the speculative market. At least twice a year a man should close up all of his trades, get entirely out of the market, and go away for a vacation or stay away from the market and rest up. Let your mindrest and your judgment get clear. The man who continually sticks to any business too long without arest or change gets his judgment warped. He gets in a rut and sees things from a one-sided point of view.

When you are in the market on either side, it is but human nature for you to hope that it will go your way, and you, therefore, give greater weight to any event that seems to indicate a favorable move to your side. When you are out of the market, you are able to see things as they really are, and judge the market without a distorted view, with hope and fear eliminated. Traders who recontinually in the market day in and day out and never allow any time to elapse between trades, sooner or later lose all their money. I know one trader who follows scientific forecasting and makes a success. He never makes more than five or six trades in the year. If he buys stocks during the winter or early spring for a rise, and the advance materializes as he expected, he sells out and takes his profits. Then he leaves the market alone, sometimes for several months. In the summer, if he sees indications of a bull or a bear market starting, he gets in again, and if the market moves his way, he may follow it up and pyramid for several months. When he gets an indication that the end is near, he closes up his trades, takes his profits, and like the wild geese, wends his way to the sunny South. Sometimes he stays all winter in Florida, hunting and fishing; then goes over to Hot Springs, Arkansas, takes a course of baths; returns to Wall Street in good health and fit for another tilt with the Bulls and Bears. He makes a specialty of trading in certain favorite stocks. He studies them closely and watches for certain signs that he considers almost infallible. When these signs come, he acts. He does not hurry until the time comes, but when it does, there is no hesitation -- he buys or sells. He keeps cool, calm and collected, and waits for the time to open or close a trade. Another thing he never does is to expect any fixed amount of profits or set any specific time for getting out. I have often seen him make a trade and it would go against him. He would get out and say, "Well, I guess I'll go back to my office and watch them for awhile." Sometimes it would be days or weeks before he made another trade, but when he did, it was based on some good sound reason, and 90 per cent of the time the second trade proved a winner. But suppose he had held the first trade he made and hoped it would move his way. His judgment, being biased, would have become more unreliable all the time. There is nothing like being out of the market and looking them over from an impartial viewpoint. When there is no definite trend, stay out, watch and wait, and your patience will be rewarded.

Gujarat NRE Coke strengthens in wind energy

Gujarat NRE Coke has announced a further investment of Rs175 crore in the form of 20 windmills of 1500 KW each. This will be in addition to the 27.5 MW of clean power the company already has in Gujarat and is being set up in the Kutch district in Gujarat. These windmills will go into generation in a phased manner - 10 becoming operational by March 2008, while the rest will go into generation by September 2008 taking the combined generation capacity of the company to 57.5 MW from wind mills alone. The company will be developing a CDM project to improve the returns on the investment. The company is also in the process of setting up coke oven flu gas based power plants in all its production facilities which will have the capacity of generation another 45 MW of clean power.The company is the largest independent producer of Low Ash Metallurgical Coke in the country. The only listed entity in the domain, it is the only Indian company to own and operate coal mines in Australia. A mine-to-market integrated, hyper efficient entity, the company is today operating in a market which is characterized by demand pulled spiraling prices. on this basis company looks good to invest.

Indian stock market a view

The origination of the Indian securities market may be traced back to 1875, when 22 enterprising brokers under a Banyan tree established the Bombay Stock Exchange(BSE). Over the last 125 years, the Indian securities market has evolved continuously to become one of the most dynamic, modern and efficient securities markets in Asia. Today, Indian markets conform to international standards both in terms of structure and in terms of operating efficiency.

Structure and size of the markets

Today India has two national exchanges, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Each has fully electronic trading platforms with around 9400 participating broking outfits. Foreign brokers account for 29 of these.

There are some 9600 companies listed on the respective exchanges with a combined market capitalisation near $125.5bn.

Any market that has experienced this sort of growth has an equally substantial demand for highly efficient settlement procedures. In India 99.9% of the trades, according to the National Securities Depository, are settled in dematerialised form in a T+2 rolling settlement environment. In addition, trades are guaranteed by the National Clearing Corporation of India Ltd (NSCCL) and Bank of India Shareholding Ltd (BOISL), Clearing Corporation houses of NSE and BSE respectively. The main functions of the Clearing Corporation are to work out

(a) what counter parties owe and
(b) whatcounter parties are due to receive on the settlement date.

Furthermore, each exchange has a Settlement Guarantee Fund to meet with any unpredictable situation and a negligible trade failure of 0.003%. The Clearing Corporation of the exchanges assumes the counter-party risk of each member and guarantees settlement through a fine-tuned risk management system and an innovative method of online position monitoring. It also ensures the financial settlement of trades on the appointed day and time irrespective of default by members to deliver the required funds and/or securities with the help of a settlement guarantee fund.

cements to be look

Cement price hike is likely as post monsoon demand for cement goes up, Cement prices are likely to be raised to Rs 5/bag. good to see india cements.

GAIL looks good

GAIL has capex plans of Rs 30,000 crore over the next 5 years, says Dr UD Choubey, CMD of the company. GAIL has entered into an MoU with RIL and ONGC for gas transfer. The company expects a turnover of Rs 5000 crore from Panna, Mukta and Tapti fiels, The stock is performing well and looking good to ahead.

Omaxe with rajastan govt

Omaxe has signed an MoU with the State of Rajasthan for facilitating the setting up of 'Multi Product SEZ' at Alwar. The proposed SEZ will be over 5000 hectares (12500 acres approx) of land and will be set up over an estimated period of 5 years. by the movement the stock is perform well in nearterm and as well as longer term.