Business Advisory - 21 July 2014

Rajesh Sharma

Today also, the bull may continue and commercial banks and micro finance companies could lead the floor. However, my advice is to be very selective from now on.In bull market, everything sells, including rotten potatoes.

Now, the following is what I feel could be profitable.

1. The development banks are yet to pick up. The increase in this sub index is due to increase in micro finance companies. Hence, studying good companies from this sector could prove rewarding. Those development banks which fall under low price range but are strong financially may go up significantly. For investment, please select "Value companies" and for trade, "glamor companies" could prove beneficial.
2. Many finance companies are still sleeping even in this bull. Please select a few among them and invest or trade.
3. In hydro-power, AHPC, BPCL and CHCL may go up. I have reservation about SHPC. It has turned to be a "glamor company" for now. Those who plan to hold for several years, SHPC good be great but for trading and for short term investment, at this price range it may prove liability. Ridi is another attarction, but may not available as it has also become another "Glamor company". Hence, I think, CHCL may go significantly up this week, AHPC will also move up and there could be slight increase in BPCL price.
4. Yesterday was the day of commercial banks and micro-finance company. I do not see today their increase across the board. But, select companies may jump up. Hence, banking and development bank sub index will move up. Finding out promising companies would be good in these sub sectors.
5. For sell, it is hard to say as we are a collection of fools. We do not sell in bull market and wait for bear market to sell. However, this is the best time to change companies. Selling rotten potatoes and buying best grapes from Martha's vineyard is what we could do now. For them, who has to sell within a short period for other reason than reinvestment, this is a great opportunity.

Rest, all of us are doing our homework, and I believe the ideas shared by friends are just reference. The same applies to this post of mine.