'Swing' To Keep Investors On The Backfoot.

As correctly pointed by John J. Murphy, market runs are based on 3 things - fundamentals, technicals and psychology. The first two shall make no sense if the third aspect cannot be clearly picturised. The market has been in a state of panic, correctly so because of the breakout of the pandemic.

Corona Virus has made a severe impact on the businesses and supply chains across the globe. Leave aside businesses, the impact we will witness due to this contagious, insidious and minuscule organism will be so gargantuan in nature, that one will easily be able to distinguish between the pre-COVID and the post-COVID world.

Investors in India, just like everywhere, have lost a significant amount of wealth in the recent market crash we have witnessed. The Indian bourse has eroded more than one-third of its highest valuation ever, which it had recorded in recent past. The situation has been so forlorn that even the market pandits have no suggestions for investors but to stay out of the market until the situations are more predictable and favourable.

But what's in it for you to read about and me to write about ???

What if I told you that by taking only marginal risks you could increase your savings by a minimum of 30% over a year. This includes no borrowing of money from your family or the bank - just some savings, that I hope you have done, and some risk, which I am sure is imperative for any gains. However, the risks are lower than ever.

People thought that 2008 was the worst fall and the future would never present an opportunity to enter the market at such low entry points. Well, history with its old habit of repeating, has brought an even better chance of making money. The markets have corrected like never before. The statistics show that the Indian stock market has given up all its gains since the appointment of Prime Minister Modi for the first time in May 2014.

Market discounts everything, even the predictable future. I believe that most of the top companies (by market capitalisation) have corrected to an oversold situation. With the world fighting so vehemently with the outbreak, the situations shall soon be under control hopefully.

Amidst this, I have a few stocks that I see creating huge value for investors in the near long term, i.e., at least 3 quarters of holding period to see significant movement. I hope you do your study as well and use this investing opportunity. The stocks I have invested include :

1. NMDC - The stock has been trading near its 52-weeks low and has a huge upside. Near term lows might go to Rs.70 which might give an option to increase exposure in the stock. Near term higher resistance targets are Rs. 89. The longer-term targets are as high as Rs. 113. The stop loss I suggest is Rs. 67. The volume of traded shares will add to the conformity of the situation.

2. TCS - The stock has been hammered from its highs of Rs. 2200 to as low as Rs. 1600. Currently trading near Rs. 1800, it has the potential to rise again to Rs. 2200. The stock has respected its long term week and monthly resistance and the uptrend seems to be intact. If the market moves sideways, the target for longer-term is Rs. 2200, else keeping the trend intact - Rs. 2600 is also on the cards. But that is a longer investment. The company has a history of declaring dividends in July, October and once at the beginning of the year. This is one of the least risky shares and I myself have significant exposure in the company in my portfolio.

3. HDFC Bank - The stock is gold trading at the cost of water. Like all financial institutions, its share prices have plummeted. It is India's best bank in terms of performance and has suffered due to traders' apprehensiveness about the complete scenario. The NPAs have decreased, loans have increased with the respected FM Nirmala Sitharaman reducing repo rate, reverse repo rate and cash reserves ratio, have significantly boosted the chance of company reaping huge profits in the future. The other twin, HDFC, is also positioned at a lucrative price, providing an entry trade.

4. PVR - The stock has fallen from almost 2000 to its half, thereby creating a potential to double up your savings invested. With the closing of halls and postponing of movies due to the lockdown, it was obvious that the stock would take a hit. But once after a few quarters, when things are more the normal ways, the revenue streams will be back. The main business will still flourish. Also, a psychological thought that I propose, written nowhere in reports, is that once the lockdown gets over and public gatherings will become quotidian, PVR's services will be one of the most used and valued for - just like restaurants and travel services. Hence, I see a high potential for return on investment.

5. HUL - FMCG sector, though the most defensive of the stocks, will be the highest rewarding after the concerns of the virus subside. There has been a lot of new market generation and forward buying in this sector. The company has bought the Horlicks and the Boost brands and aims to expand in this sector. If the new market generation is greater than forward-buying, the penetration of the company will increase. The upside is seen for Rs. 2400. The stock hasn't been hammered much which makes it all the more robust and reduces the risk significantly. It currently trades near Rs. 2100.

There are a few more stocks to follow. I have provided one each from the broader indutrial sectors in the Stock Market. If one hasn't noticed then - at one point recently last week, oil was cheaper than water, attracting a lot of investors towards oil and related companies. BPCL, HPCL, ONGC and Reliance become very important at such times. Spencers is another share which has garnered the interest of a lot of investors once Damani Ji has raised his stakes in the co. The auto sector is neither my expertise nor does it show signs of revival. Similarly, I wish to stay out of the pharma market.

These are completely my views and the projections I have made are based on my individual study. One does not have to adhere to them and should make their own decisions. I have written this just so that people are aware of the opportunities around them and can learn when the cost to gain experience is the least. I have kept only top stocks in considerations and have suggested only to put in your savings that you don't need in immediate future because the market is like a bottomless pit. You will not want to erode your net worth in such treacherous times. These stocks have almost 0 chance to go to no value and will rebound.

2 important suggestions from my side:-

* After you have decided to take a position in the market, before buying the stock setup your stop-loss. Not just now, before any trade, first set up your stop-loss.

* Stay Home, Stay Safe. Cooperate and things will get better.

Write below if you have doubts or topics you want me to write more on. Let's make the quarantine more productive for each other.