Greetings,

 

Challenges are Scheduled News & Events; and, Surprises are Unscheduled News / Events.

NIFTY50 Paradigm Shifted: What actually Happened in 2020 is just a indication of 2024. We had seen near about 11500pts price action during 2020, if one counts from Point to Point.

Initially NIFTY50 made High at 12430 in January only to make low of 7511 during March Expiry. AND, recovered back to new all time high at 14025 levels by December 2020.

Calendar 2020 was a leap Year. And, in that 3 Months (March & November, December) were too volatile and unprecedented. May be this was just a trailer, we could see full movie in 2024…

Because 2024 will be a Leap Year and secondly, both USA and India will have their General Elections to elect (select) President & Prime Minister, respectively.

 

Surviving and Growing is all that Important:

Best thing happened to us is that Pillars’ Strategy’s has proven its Strength by surviving and growing during this unprecedented Market Volatility.

Along the way, had failures, too – DLF, HDFCBANK, BHEL, HAVELLS, BHARATFORG.

Overall, Clients are happy to close Calendar in Net Profit after accounting (adjusting) all those losses seen during 2020.

Nonetheless, Performance could have been even better. Therefore, had made all the necessary changes in our working given these unexpected volatility lead by Real Time Data feeds during Covid-19 Lock and unlock processes.

As always, We don’t allow the Past to be forgone. And, now we are more than ever prepared to handle all those erratic news flow and actions taken by Government and Corporate’s Chieftains.

 

Challenges are Scheduled Events, News Flow for 2021: Market react is all that important. 

Below, are the domestic ones, which hardly changes “THE” prevailing Trends.

List of Routine News, Events,

• Twelve GST Council Meeting, Monthly GST Collections’ Figure.
• Monthly Data related to Telecom Subscribers, Cement Dispatches, Auto Sales.
• Every now & then LPG, Petrol, Diesel Price revisions; impacting Cost Structures.
• Parliament Sessions – Budget, Monsoon, Winter – law enactment is very exciting.
• Six RBI MPC Meets, Six plus States’ would go in Elections to (s)elect Chief Minister.
• Union Budget, States’ Budgets, with scheduled Finance Ministry Press Conferences.
• Quarterly Results, AGM Meet, at-least four official Analysts’ meet per FnO Company.
• SEBI Circulars about Trading Rules, Tweaking of Derivatives would come, unnoticed. 
• And, so is the Financial Year Closings, Monsoon Forecast, Deepawali, will come & go.
• Monthly Data of Petroleum Products, IIP, inflation and quarterly readings of GDP data.

 

Surprises are Unscheduled News, Events, Announcements by Corporates, Governments:

Political Scandal, Economical Scam, Geopolitical Tensions, Border Disputes, Terrorists Activity

At the maximum, they would generate nothing more than a 5 to 12% price Corrections, which means better Entry levels in the prevailing Trend (BUY or SHORT SELL); valid across the board for Stocks, Sectors in general and particularly for NIFTY50.

Remember Surgical Strike of October 2016, then demonetization – Market Bottomed out @ 8000 levels and went on to make new High @ 10100 in September 2017 post UP Elections, GST launch. 🙂

Reaction to that, and impact on the Stock Market has to be analyzed in the real time.

However, as a safety measure only we have that “PRECISE” Stop-loss in place.

 

However, “DOWN TREND” comes from “EXPECTED” developments in International Markets,

1. Nasdaq Bubble Bust – 2000
2. Sub-prime Crisis – 2008
3. Yuan’s Devaluation – 2015
4. Covid-19 driven Shutdowns – 2020

Difficult to accept at first but possible to understand as their signs / indications are quite visible, as private People of Money keeps on rising red flags about them from time to time.

However, the issue is that these Macros are bad Market timing indictors. Therefore, trading calls based entirely on them are, usually, either way to early or way to late.

We found a way around:

Follow “FOUR” steps formula to forecast those “EXPECTED” developments.

• Accept Signs,
• Analyze Indications,
• Act on outcomes, and
• Grant time for materialization…

However, this is not an overnight process rather a long drawn one, spreading across many “Monthly Expiries” but of-course, manageable with ease.

 

~ Scheduled News are Challenges which generates Correction

~ Unscheduled News are Surprises which generates Trend and known from long time.  

 

Differentiation between Trend & Corrections is most important:  

Here are few Scheduled-Unscheduled Events which initially looked as Trendy – powerful enough to generate a full blown Bear Market lasting for few months, if not years but eventually did nothing more than a regular healthy Correction.

For Example, June 2016 saw Brexit, and/or Trump Trade War, Hongkong Unrest, Issues related to South China Sea, North Korea, Plus Iran-Israel lead Middle East Tension, Financial Woes of NATO Nations like Turkey, Greece, etc.

TESLA (plus all the Tech Names) Valuation, IPO frenzy both domestic and in International Markets seen in recent times, Alibaba Woes (Ant Financials IPO cancelled, Operational Enquiries), Google, Facebook facing Antitrust Enquiries, so on so forth.

Growth Stocks’ Sky Rocket or dirt cheap Valuations measured by Price to Book Value, and P/E Ratios of Value Stocks’, Rising (falling) Commodity Prices, Government Trade Balances, fiscal policies and Central Bankers’ Polities are added triggers.

All these are difficult to understand therefore can’t be forecast precisely unless you’re insider.

BUT, we are prepared for their impact on the Stock Market in both positive & negative Sense.

 

Bonus: A global banking crisis is unavoidable, probably starting in the Eurozone.

The only question is how long it will take for the crisis to accelerate and end.

Cause: Negative Interest Rates, Effect: European Banks Bullying customers with New Fees.

 

 

Thanks for the reading…