Few thoughts on Indian Markets

Few thoughts on Indian Markets

Markets are primarily subject to capital movements, everybody knows. And capital that’s early into the trend makes most of the money. So lets just try and find out whats been happening in the Indian market off lately as far as the capital movement is concerned.

Stock prices movement will be our indicator to the extent to capital movement into or out of the stocks.

Lets start with the mid caps and show you a couple of examples of the extent of capitulation that has recently happened.

Above is the weekly chart of VIP Industries which is a popular luggage maker here in India. You can see the gains made of you would have invested/ traded this counter at near about March 09 lows. In just about three months the stock has lost more than 60% after hitting the highs at INR 200.

On the other hand lets see this chart of Tata motors – now the owner of Jaguar and Land Rover brands. Tata motors business in Commercial Vehicles is unbeatable in India for now. If we see the charts there is now a clear movement of capital into the scrip which ensured that it first bottomed out and then make a series of higher highs and higher lows.

This occurrence is not just limited to these two scrips but is widespread, providing a clue that this is stock pickers market with most probably broader indices will continue to remain rangebound for some time.

In summary we are see capital moving into quality big names and mid caps anyways will take time to heal themselves.