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Sector indices

Discussion in 'Chart of the Week' started by 1sreerajvs, Jun 7, 2020.

  1. 1sreerajvs

    1sreerajvs Member

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    Nifty Auto & Nifty FMCG Both indices near resistance. shall we consider this scenario in case of investing stocks in this sector?Will you please share views
     

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    1sreerajvs, Jun 7, 2020
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  2. akhtar80

    akhtar80 Responder

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    Nifty FMCG:-
    Most of the stocks at 52week high. Hindunilever has corrected some but most have rallied. For eg. Marico from 250 to 350 in one n half month. Let them settle down or consolidate. Now question is if some of them won't even come down by 5-8%, then in that case identify stocks, invest in correction.

    Many will say that break outs are better but dangerous as well, unless you are confident on fundamentals n have your position size in control.

    Nifty auto:-
    Some saying after this lockdown people will buy 2wheelers, cars etc so it should go up.

    My view is that those who own cars are well placed for the time being and can survive job loss or business loss. No one will be buying for a new model. Also not many will buy to drive ola or uber. So I don't see four wheelers doing wonders fundamentally. Maybe some pent-up buying now but will collapse come July when actual business effects are seen.

    2wheelers:- those who own them, won't buy new ones, those who don't have will go for second hand as jobs are very few and packages have come down. So why would a field boy will buy new for an uncertain future.

    Autos will do very good but only in second hand Market, as many will sell it due to loss of business or job. And some will be auctioned by finance companies due to non payment of loans. So in all my view is that second hand uto industry is going to be good.

    Only exception can be Ashok Leyland, just incase india china thing escalates.

    So look at opportunities which can be utilised in second hand auto's, like sale of batteries n tyres.

    This is purely my view.

    Maybe, Shabbir or other members can throw more light on this.
    Sent from my ASUS_X00TD using DIY Technical Analysis mobile app
     
    Last edited: Jun 8, 2020
    akhtar80, Jun 8, 2020
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  3. shabbir

    shabbir Administrator Staff Member

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    When Nifty Pharma was correcting, Divis Labs was hitting all time high. Index matters but that is only for the views. What matters the most is, will business make more money or less.

    Rest is all news when investing in stocks.

    When you aren't sure about single company and want to invest in the pool of companies to diversify or want to consider thematic mutual funds, the important aspect is sectorial view.

    I like to keep things really simple and easy. The reason is, most of the other things in the market is noise. Whats prime is earnings and growth.
     
    shabbir, Jun 9, 2020
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  4. shabbir

    shabbir Administrator Staff Member

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    Moreover, when you are investing, you don't invest for 6 months. Consider you want to open up a business, Can you turn things around in 6 months. Never.

    So when investing, consider 3 years to 5 years as minimum. There are a lot of things that can go wrong in the next 3 years for many companies.

    Take example of my investment in Lupin. I thought US FDA will fix in 2017 and max by 2018. It didn't.

    Now things started fixing. The only thing that kept my investment was, I knew companies is taking right steps. So then big ships needs time to steer. If they aren't going towards the iceberg, things should be fine at some point.
     
    shabbir, Jun 9, 2020
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  5. 1sreerajvs

    1sreerajvs Member

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    Thank you Shabbir sir and akhtar80 for such a detailed answer, really appreciate it.
     
    1sreerajvs, Jun 9, 2020
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  6. shabbir

    shabbir Administrator Staff Member

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    The pleasure is all ours.
     
    shabbir, Jun 10, 2020
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