A Nice End To Year 2010

The final day as well as the week of 2010 capped the last year of first decade of current century with smart gains. 2010 turned out to be another good one for the investors with Sensex gaining around 18%. Despite a few sectors hogging limelight it was a fairly all round show with various sectors outperforming the Sensex. While Auto and banking sector grabbed the headlines as well as media space, the others like FMCG, HC and IT also did equally well. All these sectoral indices were up 30-37% for 2010. Consumer durables was the biggest gainer for the year as the index gained around 68% despite losing some sheen in the last 6-8 weeks. Realty remained out of radar for most investors as it was the biggest loser. Autos and Health care were the most consistent and stable performers while IT took off in the last couple of months. So, as we enter 2011 IT is the one that shows strong momentum. Metals, Capital Goods and Oil & Gas were mostly subdued though metals did show some momentum over last few weeks. So, what now as we enter a brand new decade. We believe that broadly market remains in a decent uptrend and we should see the new highs being made in 2011. First leg of the current bull run was terminated just around the all time highs and we have had a decent correction of about 10-11%.

Market seems to be slowly but surely coming out of that corrective phase even as most investors/traders remain wary of the rally. The sentiment is still negative and the carnage in small and mid caps is largely to be blamed for that. We feel that Nifty could continue to move higher over next couple of months though in almost a similar manner as it has from around 5700 level. A clear change in leadership is seen and sectors like Metals and Capital Goods could take centre stage with IT continuing to move higher. The biggest newsmakers of 2010, Autos, Banking and even Consumer Durables are likely to play a second fiddle and might lead the corrective moves rather than the rallies. Smaller sectors like Sugar, textiles and fertilizers would also be in focus particularly in the next couple of months. So, as it stands now one needs to focus on stocks like BHEL, L&T, Siemens, ABB, APIL, Reliance Infra, Tata Steel, Hindalco, Sterlite, Sesa Goa, Cairns, RIL, Bharti, Wipro, Mphasis, Hexaware, Polaris, Praj, Renuka, B.Chini, Arvind, Alok etc for decent and stable gains. These are just a few names and many new stocks from within these sectors would surely pop up as the trend becomes more visible. Technical patterns of various underperformers of 2010 still don’t provide enough confidence to suggest that these stocks could seek sustained higher levels. But, we surely believe that some of these names might just provide excellent trading and investing opportunities as the Year progresses.

We sincerely wish all our subscribers an extremely profitable 2011!