Correction, Recession, Depression – Part 2 !!

Greetings !!

Yesterday, (on 18 August 2020) NIFTY50 Spot Index Closed at 11385.35 levels with Price Earning Ratio of 32.03; on 14 January 2020, when NIFTY50 closed at it’s highest ever level even then PE Multiple was only 28.67…

On March 23rd, 2020 when NIFTY50 Spot Index Closed at 7610.25 then PE Multiple was 17.15

34 Derivatives Stocks out to 139 have made 52 week High or All time High from then to now.

How much things have changed in last 5 Months (i.e. from 18 March to 18 August 2020).

Then, nobody interested in BUYING and today nobody looking for reasons to SHORT SELL.

However, we always play contrarian. Therefore, best to offer you Second Opinion”.

This write-up will help you understand about our approach towards Market.

 

Before proceeding further, please do refer Part One, click attached URL.

https://rockettrades.com/2020/03/18/correction-recession-depression/

 

Now, time to see assess the performance achieved by the Pillars’ Strategy after above post.

TABLE – TWO

NSE SYMBOL Closed Price on 17 March 2020 CLOSING BASIS SL Closed Price on 18 August 2020
ADANIENT 133.4 65 213.7
BAJFINANCE* 3444.85 1231 3419.9
BALKRISIND 879.35 324 1341.3
BATAINDIA* 1306.5 474 1256.55
DLF 144.6 67 157.15
GMRINFRA 16.6 7 21.25
JINDALSTEL 107.2 51 224.9
JUBLFOOD 1328.7 493 1915.75
MUTHOOTFIN 640.15 239 1238.3
NAUKRI 2101.9 783 3276.65
NIITTECH 1181.9 515 2011.5
TATACONSUM 283.85 102 545.75

Highlighted in Blue color have had made 52 week high or All time Highs after our advise.

*Loss making Stocks. Even then above Portfolio generated Returns of 51% in five months.

Considering all of those Stocks as listed in Table Two, closed as of today Morning levels.

 

Phase One completed.

Now time to proceed towards Phase Two of Correction, Recession, Depression !?

 

TABLE – THREE

As of today, following 10 Stocks are controlling 62% of NIFTY Movements, either side.

SYMBOL WEIGHTAGE (%) P/Earnings P/Book
RELIANCE 13.95 33.33 2.94
HDFCBANK 9.52 21.18 3.27
INFY 7.36 25 6.23
HDFC 6.54 14.67 2.36
ICICIBANK 4.97 24.95 1.84
TCS 4.96 26.34 10.05
KOTAKBANK 4.17 30.45 3.9
HINDUNILVR 4.11 71.03 58.13
ITC 3.6 15.92 3.72
BHARTIARTL 2.63 -8.02 2.81

We need upward revisions in third and fourth quarter earnings to justify these valuations; Otherwise, sustaining 32 PE multiples at current levels are way to difficult for NIFTY50 given all the news flow and visible situations at the ground levels.

We are in phase two where Policy Trade is shifting back to Re-opening Trade.

 

In war, as in Stock Market, most failure comes from inaction. Now is the time to act.

Better Re-balance Your Market Risk from Speculative Greed to Speculative FEAR.

 

Thanks for Reading.

Team Rocket

Get in touch with us at,

~ WhatsApp: +91 99003 30558

~ E-Mail ID: Rocket@RocketTrades.com

For more details, doubt, feedback; Speak with Nilesh Jain on 99003 30558

We’re Strictly a Research House armed with proprietary methods & workings.

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