INDIA

Our web coverage of India is courtesy of Taran Marwah [alternate email: Taran] Last Updated: Mon, 18 Apr 2005 19:24:25 GMT

Foreign investors may invest and trade India through Country Funds (IIF, IFN, IGF, JFI), or individual stocks with ADRS on the NYSE such as ICICI (IC) or Nasdaq listed companies such as Infosys Tech (INFY) and SATYAM INFOWAY (SIFY). To track the Indices and Prices of shares, visit Bombay Stock Exchange (BSE) and National Stock Exchange of India (NSE).

DECEMBER

BSE SENSEX closed today i.e. Friday – 2^nd Dec’05 at a life time high of 8962. Up whopping 11.0 % from last month’s close of 8073. History was created today at BSE as the SENSEX tested an all time high of 9056. BSE SENSEX breached past the all important 9000 mark on 29^th Nov’05 on intra-day basis. The high and low for the BSE SENSEX for Nov’05 were 9056 and 8050 respectively. The BSE SENSEX was in a bull orbit in Nov’05 and surprised almost all analysts including the undersigned.

The FIIs came back with a bang in India, in Nov’05 after pulling out US $ 840 Million in Oct’05. The figure of US $ 600 Million mentioned in the last month’s update was an approximate figure. FIIs poured in US $ 902.50 Million in the Indian Equities in Nov’05. On top of this Domestic FIs and MFs pumped in US $ 123.00 Million. Indian Stock Markets were on fire from 14^th Nov’04 onwards. The action was in frontline SENSEX and NIFTY Stocks most of which tested their all time highs/new 52 week highs. Some Midcaps were on the same trajectory. This sudden pumping of funds by FIIs was on account of a few factors - Robust Q2 GDP growth announced by Govt. of India – 7.5 % , No further interest rte hikes in USA and Bullish stock markets in Hong Kong, Japan and South Korea etc. The respective indices – HANG SENG, N225, KOSPI etc testing new 52 week highs or five year highs. For Q1 of this fiscal the Indian GDP growth was 8.1 % (

China

’s GDP growth during the same period was 9.4 % ). The Indian Govt. feels that the annual GDP growth this fiscal would be in excess of 7.5 %. This would be only next to

China

in the world.

FII investment into Indian equities this fiscal till date have been US $ 8.70 billion. If FIIs continue to pump another US $ 1.0 billion or so in Dec’05 – we can expect Indian Stock Markets to test new highs. The Indian Stock Markets are heavily dependent on FIIs flows for directions/trends in the future. I feel that FIIs will continue to pump in funds in the Indian Equities but cannot estimate the quantum of funds. I feel that BSE SENSEX should test new highs in Dec’05.

The levels to watch for Dec’05 are :

S1 8750 S2 8540

R1 9100 R2 9300

There is a very strong support for the SENSEX at 8540. If BSE SENSEX drops below 8540 - expect a free fall to 8250 levels. One cannot rule out anything in Stock Markets. FIIs may decide to pull out a billion or so as in Oct'05 !

BSE SENSEX can breach past 9300 levels and if this level is sustained, I expect the BSE SENSEX to test 9500+ in Dec’05 itself. The figure of 10,000 may then be tested this fiscal itself i.e. by 31^st March’06, if FIIs continue to pump funds as they have been doing so far in the current fiscal except for Oct’05.

GOLD tested US $ 505.30 pto in Hong Kong. It is on its journey towards $ 550 pto as predicted !

I feel NYMEX Crude would be US $ 60.00+ for Jan’06 deliveries during Dec’05.

We would like to recommend the following Sectors and Stocks for our investors :

Defence Sector : In India, the production of Defence Hardware is primarily with the Govt. of India A few years back this sector was opened to Private Sector Indian Companies. We feel this sector is a virgin sector in India and returns can be fantastic in the medium to long term future, provided one can pick up top quality blue chip stocks. We in India do not have the likes of Lockheed Martin, Raytheon, Boeing, Northrop Grumman etc. We strongly recommend the following three Stocks in this Sector in India :

a) KIRLOSKAR OIL ENGINES : This Stock closed today at Rs. 198.00, a new 52 week high. This is a Rs. 2.00 paid up Stock. We feel that the Indian Navy ( Mazagaon Docks Ltd. ) will place a huge order for six units of diesel engines with this company by Jan’06 for propulsion of its Diesel Electric Submarines through 2007-2010. The current EPS is Rs. 90.00.We expect the FY’06 EPS at Rs. 150 and FY’07 Rs. 180. We expect a price of Rs. 400 in the next 9 to 12 months. Markets discount the future. Maybe one can see this price earlier !

b) NELCO : This Stock closed at Rs. 113.20. It tested a new 52 week high of Rs.123.00 in Nov’05. The company has started delivering ‘ IR Ground Sensors ’ to the Indian Army and huge orders are expected in the near future from Ministry of Defence, Govt. of India. There is also a strong possibility of this company getting orders from Indian MoD for Ground Surveillance Radars. I expect the price of this Stock to double in the next 9 to 12 months to Rs. Rs. 240.00+.

c) L & T : Our old favourite engineering stock tested Rs. 1810 today. We had predicted in March’05 that this stock will test Rs.1800 in 9/12 months. Bull’s eye ! We predict the Stock to double from this level of Rs. 1800 to Rs. 3600+ by Mid 2007. By this time it would have bagged a US $ 1.5 Billion order from MoD, Govt. of India for supply of 155 mm Towed Howitzers for the Indian Army. In addition it is also working on a few select niche projects for the Indian MoD.

BIRLA ERICCSON : We fancy this optical fibre manufacturer in India ahead of its peers – VINDHATELE, STERLITE OPTICS, AKSH OPTI etc. This Stock closed today at Rs. 32.95. The 52 week high and low for this stock are Rs. 49.00 and 21.00 respectively. This is a turnaround stock and there is huge demand in India for optical fibre to meet the telecom infrastructure of both Govt. of India and Private Telecom players. The OF from this company commands a small premium in the marketplace because of its quality. We predict that the Swedish partner will buy out the Indian partner – BIRLA Group in this JV Company in 2006. I predict this Stock to be Rs. 60.00+ in 12 months.

WOCKHARDT PHARMA : This Indian Pharma major closed today at Rs. 443.00. It’s 52 week high and lows are Rs. 557.00 and 325.00 respectively. We fancy this stock ahead of its Indian peers – REDDYs, BIOCON, PANCEA, SHANTHA etc. WOCKHARDT has already made significant progress in the Biogenerics Sector in Europe. It is a leader in India in EPO, Human Insulin, IFN and G-CSF products. It is expected that global ‘Off Patent’ Biogenerics Market would be worth US $ 10.00 billion by 2010. As of today it is worth US $ 0.30 billion. WOCKHARDT will face intense competition from global players like – TEVA, STDA, NOVARTIS and smaller niche companies like- GeneMedix, Rhein Biotech and BioPartners etc. I feel WOCKHARDT is a Rs. 900+ Stock in Mid 2007.

We wish to point out one small macro issue for the Indian Economy – Fiscal Deficit. For the fiscal 2004-05 the gross Fiscal Deficit of Govt. of India was 8.3 % of GDP. This is a cause of worry as with the Left Parties providing support to the current Congress led UPA Govt. in

India

, this figure may end up close to 10.0 % by 31^st Mar’05 against a budgeted figure of 7.7 % of GDP by the Planning Commission. Compulsion of running a coalition government in

India

with the support of the Leftists, who are blocking all reforms and not allowing to cut subsidies !!!

Cheers to the BSE SENSEX in Dec’05 !

NOVEMBER

The BSE SENSEX closed today i.e. 2^nd Nov’05 at a level of 8073 down a whopping 7.0 % from the last month’s closing of 8698 as of 3^rd Oct’05. The intra month high and low for Oct’05 were 8822 and a shocking 7656 respectively.

We had predicted the BSE SENSEX to test 8800 and then zoom to 9000 level in Oct’05. BSE SENSEX created history on 4th Nov'05 by closing first time ever at 8800. The BSE SENSEX tested a new life time high of 8822 on 5^th Nov’05 on an intra day basis. But the BSE SENSEX could not zoom to the magical figure of 9000 in Oct’05 as predicted. BSE SENSEX crashed from 8822 to a shocking low of 7656 in a matter of three weeks – a massive correction of 13.0%. We had predicted that 8100 level could be a strong support for BSE SENSEX. This support was broken convincingly.

The Indian Stock Markets corrected sharply not on account of a terror attack or high crude oil prices as mentioned in last month’s forecast but on account of FIIs pulling about US $ 660 million from the Indian bourses in Oct’05 itself. The FIIs pulled funds from major emerging markets in wake of a ‘intrest rate hike’ in the US Market and other global factors best known to them. The Stock Markets in Taiwan and South Korea also got a pasting in Oct’05. Although NIKKEI (N225) in Japan was at its 52 week highs. The impact would have been more severe in India had the domestic MFs and FIs not stepped in. They were nett buyers of Indian Equities to the tune of US $ 250 million during the same period. Second reason for the sharp correction was a mix-bag of Q2 ( cumulated H1) results of the current fiscal from Corporate India. Pharma and Cement declared poor Q2 results. Profit growth in Steel, Textile, Commercial Vehicles and White Goods sectors was slower than expected. Telecom, Power, Two wheeler and Oil Sector were on the growth path.

The massive correction ( 13 % as per above ) took ‘wind out of the sails’ from the Indian Equities. Some momentum stocks with stretched P/Es in the Midcap Sectors corrected by 30 to 40 % from their Sept’05 closing levels. There was carnage in Smallcaps and Penny stocks. Some of the Smallcaps corrected by 50% or more. Almost all the Penny stocks were hammered out of shape with corrections ranging from 100 to 700 %.

We have been advising investors for the past two months to book profits and sit on cash or buy Gold. The yellow metal was bullish in Oct’05 testing a level of US $ 480 pto on 10^th Oct’05 at COMEX and also at spot LME. I feel investors to park at last 50 % of the funds into Gold for the next 12 to 18 months. One can get about 60 to 75 % returns in Gold from the current levels of US $ 465+. We have predicted last month that Gold could test US $ 800+ pto in Mid July’07. William Gary, President of M/s. Commodity Systems Inc, USA, expects Gold to be US $ 873+ pto in Mid 2008. Gold is moving up with US Dollar strengthening !

I feel there is money is to be made in the Midcap Sector in Indian stocks. Gains would be very stock specific in ‘turnaround’ and ‘merger and acquistion’ stocks in this Sector. On the macro level things are rosy for the Indian economy in the future. Indian economy is expected to grow at 7.0% this current fiscal and for the next fiscal too.

We advise Indian investors to only allocate 50 % of their funds for Equities with immediate effect. Start buying physical Swiss Investment Gold Bars from STC in India at every dip in Gold prices. At around US $ 480 pto your investment in Gold should be finished. Alternatively investors who play commodity futures can buy Gold futures at NCDEX in India for long positions.

We advise balance 50 % funds to be invested in select Indian stocks as per our recommendation or other channels in the due course of time. We have identified a couple of proposed multi-baggers for 2006-07 and are studying them in detail. We will post them in our next forecast or earlier.

We feel the BSE SENSEX will be range bound in Nov’05. I feel there is a very strong support for BSE SENSEX at 7650 levels. The levels to watch for BSE SENSEX for Nov’05 are :

R1 8200 R2 8320 R3 8400 R4 8530

S1 8000 S2 7880 S3 7650

If 7650 level is broken – we seriously advise Indian investors to get out of all their equity holdings including the blue chips, as we might enter a bear phase for the short to medium term. We feel this level is a very strong support level but if FIIs decide to pull out a couple of billion dollars in Nov’05 from the Indian Equities, then we can see the BSE SENSEX crashing to any levels between 7500 to 7000 depending upon the FIIs net exposure to Indian Equities. Nothing can be ruled out in the Stock Markets.

We repeat that in the long term, we continue to be bullish on Indian Equities as 7.0 % annual GDP growth is only next to China in the world. We can see to a level of BSE SENSEX 10000+ in the next 15 to 18 months. There is no denying the fact that property still is the most preferred asset class by an average working Indian. As India has about 200 million working middle class – we can expect equities to be an exciting asset class in the next two years. Hence we stick to our prediction of BSE SENSEX at 10000+ level in the coming 24 months or so.

We will revert with our recommended stocks soon. In the meantime we suggest that Indian investors buy into Gold as mentioned above.

Cheers for the yellow metal !

OCTOBER

The BSE SENSEX closed today – Monday 3^rd Oct’05 at a life time high of 8698 up 4.0 % from 8381 as of 16^th Sept’05 as per the last update. The intra period highs and lows were a life time high of 8726 and a whopping low of 8122.

We had predicted last month that BSE SENSEX could march past 8600+ levels. In fact the BSE SENSEX crossed 8700 level today and tested a life time high of 8726 to close marginally below 8700 at 8698. History is being crested at Indian Stock Markets with both BSE SENSEX and NIFTY testing life time highs in past few weeks.

The frontline SENSEX and NIFTY stocks are being picked up by FIIs and Indian MFs/FIs. Almost al these Stocks were all on fire with new life time or new 52 week highs. I am not printing their new highs as the list is too long ! FIIs are also picking up midcap stocks with strong fundamentals in the Infrastructure Sector and Automobile Components Sectors. These stocks were on fire too ! As predicted there was a correction in the BSE SENSEX but not a 10 to 15 % as expected by CLSA, France and other foreign brokerage houses. Even I did not predict such a large correction. The BSE SENSEX corrected by about 4.0 % between 21^st through 23^rd Sept’05.

Small Indian investors again got stuck with penny stocks inspite of caution we have been advising for the past few months. The Indian Stock Market Regulator – SEBI intervened a ten days back when the penny stocks had a ‘blood bath’ on the streets. We cannot convince the small retail investor to control his greed ! This has not happened for the first time in Indian Stock Markets. The penny stocks were hammered down mercilessly by the Operators during the above mentioned correction. SEBI had to intervene and put margins and circuit filters in place. Still about 300 odd penny and midcap stocks must be locked in lower circuit limits as announced by SEBI.

I am reproducing a few lines from the last update.

Quote “ It is worthwhile to note that BSE SENSEX marched 7000 to 8400 in just 63 trading with minor corrections. Now the march from 8400 levels to 9000 levels could be even at a faster pace. ” Unquote

We feel that the BSE SENSEX will test a level of 8800+ in a matter of a week or so and then will march past the 9000 level in Oct’05. Above 9000+ level the BSE SENSEX looks very very bullish and may test 9300 to 9500+ levels in Oct’05 itself. This is a pure FIIs funds liquidity driven market. There could be minor corrections in the march towards the all important level of 9000. Beyond 9000+ level I feel the BSE SENSEX will zoom to 9300++ levels.

The FIIs have till date poured in excess of US $ 8.60 Billion into Indian securities. This means that in July, Aug and Sept’05, the FIIs have poured in excess of US $ 4.10 Billion. At this rate at which the FIIs are pouring money into Indian Stocks we might end up the calendar 2005 with a figure close to US $ 10.00 Billion which will be a lifetime high for the Indian Equity Markets and close to Taiwan, Japan and Korea. The P/E multiples in India are though slightly higher today as compared to the other countries as above.

India is proving to be an attractive destination on account of a ‘real working democracy’ and expected annual GDP growth in excess of

8.0 %. The Indian Economy grew in Q1 of the current fiscal by 8.1% which is highly commendable but agriculture growth was below expectations. This is a cause of concern but with current government in Delhi this issue will be handled swiftly as per my understanding. Reforms in the agriculture sector are not being blocked by the communists who support the current government in India. Please note that without the support of the Left Front ( Communists ) the government would not have been formed in New Delhi in March’2004. The Left Front is blocking all other reforms in India in almost all the sectors – FDI hike in Telecom, Aviation and Retail etc. They are also against privatization of PSUs. The government is stuck as they cannot push ahead with the Reforms in any sector expect agriculture.

Investors are advised to ride the rally and take profits home. No new stocks are beig recommended at these levels. Any major decline can be used to enter the market into frontline stocks for ‘pure short term trading’ calls for punters only !.

The levels to watch in Oct’05 are:

R1 8800 R2 8900 R3 9000

S1 8650 S2 8580 S3 8500 S4 8400

I feel there is a major support at 8500 level unless some major disaster happens in the world markets e.g. a major terrorist attack in Europe/USA or Crude Oil trading above US $ 72.00+. Nothing can be ruled out on these two accounts. I however feel that Crude Oil would be firm at NYMEX in the band of US $ 65.0 to 67.0+ in Oct’05. If Crude shoots above US $ 72.00+, then I expect the world stock markets to correct sharply. Indian Markets will also follow suit ! Then even 8400 level maybe breached and you can see a level of 8100 for BSE SENSEX.

We had predicted GOLD to test US $ 470 pto in our last month’s forecast. Spot GOLD at LME traded at US $ 473.25 pto on 21^st Sept’05. At COMEX (NYMEX) in USA the GOLD futures for Oct’05 delivery were traded at US $ 473.00+. My prediction on GOLD was once again BINGO !

I predict GOLD to be close to US $ 550+ by Mid 2006 and to be near its all time high of US $ 800 pto in April/May’ 2007.

Our recommended Stocks as brief synopsis :

a) McDOWELL : It closed today at a life time high of Rs. 510.00. In April’05, when the price was Rs. 250.00+, we had forecast a price of Rs. 500.00+ in short term.

b) TCS : Closed today at a life time high of Rs. 1505.00. In March’05, when the price was Rs. 1400.00+, we had predicted a price of Rs. 1800+. We still stick to our prediction.

c) L & T : Tested a life time high of Rs. 1578.00 during the period under review. In March’05, when the price was Rs. 1000.00+, we had predicted a price of Rs. 1800.00+. We still stick to our prediction.

d) SRF : Tested Rs. 346.00. We had predicted a revised target of Rs. 350.00+ in July’05 forecast. Very close ! We advise investors to exit from this counter when the BSE SENSEX is at 9000+. It is fully priced at Rs. 350.00+

e) GE SHIPPING : Tested Rs. 221.00. We had predicted a level of Rs. 220.00+ in the medium term in our April’05 forecast when the price was around Rs. 164.00.

f) ONGC : Tested a new life time high of Rs. 1100.00. In March’05 we had a forecasted a price of Rs. 1800.00+ in the long term. We still stick to our forecast.

We wish investors good luck and bumper profits for the month of Oct’05 !

SEPTEMBER

The Update is late as I was not clear on the trend. Indian Stock Markets were defying logic !

The BSE SENSEX created history today i.e. Friday, 16th Sept'05 by testing a new life time high of 8389, just short of the magical figure of 8400!

BSE SENSEX closed today ( 16th Sept'05 ) a a new life time high of 8381 up smartly by 7.9 % from the last update of 7767 as of 12th Aug'05. The intra period highs and lows were 8389 and 7537.

The Indian Stock Markets foxed almost all analysts in the past two weeks including me with a strong bull phase propelled by huge funds poured into the Indian equities by FIIs. In the period under review ( 12th Aug to 16th Sept'05 ) FIIs poured in US $ 1.0 Billion into the Indian Equities. Frontline blue chip Stocks, mid and small cap Stocks were all on fire. Some small and mid caps stocks zoomed to dizzy heights and were trading at P/E Multiples of 100+ to 450+. Completely crazy situation as far I am concerned. The money was shifting back and forth from blue chips to mid/small caps and vice versa during the period under review.

The Indian Stock Markets ignored all the negative news i.e. record high crude oil prices, burgeoning fiscal deficit and almost complete halt in the Reforms Process due to pressure from Left parties. This was baffling and still the BSE SENSEX shows no signs of a major correction in the balance two weeks of Sept'05.

The BSE SENSEX corrected by only 300 basis points ( only 3.8 % ) from the 7860 to 7634 level, between 18th to 29th Aug'05 inspite of the NYMEX Crude Oil quoting above US $ 66.00 pbbl. Just for ready reference Crude Oil Futures for Sept'05 delivery tested a whopping US $ 70.80 pbbl at NYMEX on 29th Aug'05. This is an all time high at NYMEX since trading started in Crude Oil Futures at NYMEX in 1988.

I had predicted a 4 to 5 % fall and further predicted that the BSE SENSEX could fall to a very important support level of 7440, if Crude Oil prices stayed above US $ 66+ pbbl at NYMEX. I had linked the BSE SENSEX to the Crude Oil prices at NYMEX but the Indian Stock Markets discounted the high level of Crude Oil prices and surged ahead in one direction - Upwards from 30th Aug'05 to today 16th Sept'05. The crude oil prices eased to levels below US 63 pbbl but then spurted back in the second week of Sept'05 back to US $ 65+. This was totally ignored by the Indian Stock Markets.

The BSE SENSEX charged from 30th Aug'05 level of 7745 to a whopping closing level of today at 8381- a rise of 636 basis points i.e. 8.2 % in straight twelve trading sessions. This is inspite of crude oil prices at NYMEX retracing to US $ 65+ level.

This bull charge caught all most all section of traders by surprise. The bears were trapped and they squared their position in the second week of Sept'05. This lead to further upward movement in the BSE SENSEX.

I somehow feel this northward movement of SENSEX defied all logic ! But as they say that in Bull Phase all the negatives are discounted as in the Bear Phase all good news is discounted. The point of the matter is that after a very very long time my predictions also went awry on the Indian Stock Markets.

The only silver lining was that GOLD tested a new 17 year high at COMEX Divn. of NYMEX on 15th Sept'05 at US$ 459.50 pto. This is the highest since June 1998 at COMEX. In Jan 1980 GOLD tested a level of US $ 870 pto at LME.

I had predicted the GOLD to be a safe bet and it was bingo !

For the balance two weeks of Sept'05 I can only predict that the BSE SENSEX may test 8500+ level . But I cannot predict with conviction at what time and level the BSE SENSEX will correct and by how much. The reason is that the BSE SENSEX is in "uncharted" territory.

Reputed foreign brokerage houses and analysts have been saying since the past three to four weeks that the BSE SENSEX will correct by 1000 to 1100 points but it only corrected by 300 points and then raced to near 8400 levels.

It is worthwhile to note that BSE SENSEX marched 7000 to 8400 in just 63 trading with minor corrections. Now from march from 8400 levels to 9000 levels could be even at a faster pace. But the fear of a huge correction is looming large on the SENSEX. One issue is clear - The Indian Stock Markets and the global stock markets have discounted the high crude oil prices of US $ 63 to 67+ pbbl range for the near to mid term future. This is beyond my understanding ! What about inflation in the developing countries like India ???

I suggest for the balance two weeks of Sept'05 just do not put any fresh money into the Indian equities. Just take your profits homes if the SENSEX rallies to 8500 to 8600+ levels.

We are studying a few stocks for short term and medium term investment for our esteemed investors. I will advise accordingly when the BSE SENSEX corrects or as the case maybe in the Oct'05 forecast. The earning season's results ( for Q2 of current fiscal ) start pouring in from 10th Oct onwards. The Indian Economy is supposed to grow at about 6.8 % this fiscal. This is the second highest Annual GDP Growth in the world after China. The Indian Markets could be in a further bullish mode in Oct'05 if the results from the corporates are good or excellent.

We hope that in the next two weeks of Sept'05 the correction in BSE SENSEX is mild and not 1000+ points plus as predicted by CLSA !

Stay invested in GOLD as I feel it is heading towards US $ 470 level in the coming eight to ten weeks.

SPECIAL AUGUST UPDATE
We had predicted in the month of April'05 about Crude Oil at NYMEX for US Light Crude Oil. We are reproducing the same for ready reference :

"If Spot Crude at NYMEX breaches US $ 60 pbbl convincingly then expect a price of US $ 65+ pbbl in a matter of one week or so at NYMEX. This will effect Global Stock Markets and the Indian Stock Markets also."

OUR PREDICTION WAS BINGO !!!

The NYMEX Crude Oil closed today ( 12th Aug'05 ) at US $ 66.86 pbbl for Sept'05 delivery. Just for information - India imports two thirds of its Crude Oil requirements. If NYMEX Crude prices do not correct to US $ 60+ w.e.f. week starting 15th Aug'05, then we expect the Indian Stock Markets to correct. India celebrates its Independence Day on 15th Aug'05. It is a national holiday in India and all markets and establishments are closed. Trading will resume on Tuesday - 16th Aug'05 in India.

We advise investors in India to start exiting from equities w.e.f. 16th Aug'05, if on the prices of Crude at NYMEX do not correct to US $ 60+ levels in the coming week. Sell all your stock holdings even if in some stocks there is a loss. Long term investors can sell their blue chips in the F & O segment and cover their positions when the BSE SENSEX bottoms out. We will advise investors when to re-enter the market. We might be entering a bear market if the crude oil prices spiral out of control and stay at US $ 70+ at NYMEX in the coming two/three months.

The BSE SENSEX closed today - Friday 12th Aug'05 at 7767, close to 7769 as on 1st Aug'05 as per our last update. As predicted the BSE SENSEX was bullish in Aug'05 and breached the R2 level of 7850+. BSE SENSEX tested a life time high of 7861 today, but could not sustain above 7850 and closed at 7767 as mentioned above.

We expect a four to five percent correction in the BSE SENSEX from today's close of 7767 if the Crude Oil prices at NYMEX do not retreat to US $ 60+ level in the week starting 15th Aug'05. The BSE SENSEX can correct to an all important support level of 7440. This is a very crucial level for BSE SENSEX. If this level is breached we can expect even further correction below 7300 levels. It all depends at which level the Crude Oil prices are going to stabalize.

We do not feel that prices at NYMEX for Crude Oil will stablize at US $ 60+ levels in the next two/three weeks. I predict that Crude Oil prices will be firm and will be above US $ 66+ in the next three weeks.

Please sell all your Stocks and sit on Cash or buy Gold till the Crude Oil prices correct to a level of US $ 58 to 60+ at NYMEX.

AUGUST 2005
The BSE SENSEX closed today i.e. 1st August'05 at a bullish level of 7669, up 6.3 % from the close of 8th July of 7212. The intra month high and low for BSE SENSEX were 7681 and 7218. This level of 7681 was a new life time high for BSE SENSEX and was tested today. Today's close was also a new lifetime high close for BSE SENSEX i.e. 7669. History was created for BSE SENSEX !

We had predicted in the last month's forecast that a level of 7500 would be breached if the BSE SENSEX closed above 7300 for three consecutive days. Our prediction was BINGO ! Infact the SENSEX went past this level of 7500 with ease and closed today at a life time high of 7669 today. The SW Monsoon was very good this year and that is big plus for FMCG , Two wheeler Companies ( Motorcycles nd Motor Cycles ) and the Agri linked Stocks. The Q1 FY'05-06 results of blue chip companies have been good by far and in line with market expectations. Some of the Indian Software Stocks dissappointed expectations. Another plus for the Stock Markets was that the interest rates remained unchanged by India'a Central Bank - The Resereve Bank of India.

The Indian Economy is estimated to grow between 6.0 to 7.0 % this fiscal ( April'05 to March'06 ). The positive market breath for small and midcap shares was beyond our understanding. For some of these stocks the P/E multiples are in three figures ! This is crazy. For the BSE SENSEX and NIFTY Stocks the P/E multiples are reasonable between 14 to 15 times their FY'06 earnings. Some established FIIs from USA, who have been investing in the Indian Equities over the past decade feel the valuations are stretched on the Indian Stocks as compared to Taiwan and South Korea. They maybe right but remember that the Indian economy is the second fastest growing economy in the world after China and India is the largest democracy in the world. China is still a non-democratic dragon. FIIs from Japan and Taiwan felt more comfortable investing in India than China over the past few months. This is a big plus for the Indian Stocks.

There is too much liquidity in the Indian Stock Markets ( largely FII driven ). All the fundamentals and negative news was ignored for a lot of midcap and small cap stocks. As predicted there was a minor correction past the 7350 level. But then the BSE SENSEX pole vaulted with ease to 7650+ levels, breaching past 7500 level. We feel the bears are trapped in this bull market which is showing no signs of a major correction. A few analysts and leading bear operators have been talking of a major correction ( about 500 to 700 points in BSE SENSEX ) since the levels of 6500 to 7000. This never happened and we feel that the BSE SENSEX may flare upto 7850+ levels in the month of Aug'05. We feel that the bears have still not squared their positions completely in the Futures and Options segment ( F & O ) and are awaiting a major correction from the current 7650+ levels. The bears are trapped as per our understanding and the BSE SENSEX will zoom to 7850+ in Aug'05.

Japanese and Taiwenese funds are pouring in huge amount of US Dollars into the Indian Equities. The Fund Managers from these countries are buying into only blue chip large cap stocks which are in the SENSEX and in the NIFTY. A lot of the stocks which constitute the 30 BSE SENSEX and the 50 NIFTY Index were on fire this month of July'05. Some tested their all time life highs. Domestic MFs and FIs were nett sellers till the BSE SENSEX was around 7350+. It seems that Indian FIs also turned bullish when the BSE SENSEX breached past 7500 with ease. Indian Operators were focussing on buying quality midcaps and mostly junk small caps which have little fundamentals. This is a dangerous sign as when the markets react small investors are stuck with these junk small cap stocks which they have to hold on for years till the next bull run.

We feel the markets is in the hands of Bulls and a level of 7850+ for BSE SENSEX will be tested in Aug'05. Stock Market pundits in India are talking of a level of 8000+ in the month of August'05. As per our predictions we feel this is possible but BSE SENSEX at 8000+ levels will take two or three more months. We feel that the BSE SENSEX will correct around a level of 7850+ by four to five percent. This would be a healthy correction for the meduim to long term performance of the Indian Stock Markets.

Total FII investment has already crossed the US $ 6.0 Billion market till date and it is estimated that by the end of the current fiscal total FII investment into Indian Equities might exceed US $ 10.00 Billlion. Out of this fugure about US $ 4.5 Billion maybe from new destinations i.e. Norway, Japan and Taiwan. We tend to agree with these figures. But we again caution small investors not to buy junk stocks in the bull market. Control your greed and buy turnaround stocks or fundamentally strong stocks in the midcap and small cap sectors, when the markets correct.

We feel that investors should not put fresh funds into the Indian Stocks at current levels and book profits slowly at all levels from 7650 to 7850+ levels. The levels to watch in the month of Aug'05 are :

R1 7750 R2 7850+
S1 7620 S2 7550 S3 7440

We feel that the BSE SENSEX find a very strong support at 7440 levels. If it breaches 7440 levels convingly one can expect a crash to 7300 levels or even lower. Time to re-enter the markets.

We do not recommend any new stocks to be puchased at these 7650+ levels of BSE SENSEX. We will advise a few additional stocks when the market corrects.

A brief review of our recommended stocks :

a) VSNL : This blue chip stock closed today at Rs. 420. It tested a new 52 high of Rs. 444.00 in the month of July'05. We had recommended this Stock at correction for buying at around Rs. 240+. The correction came at 7350+ levels but was shortlived and not as established pundits expected. We predicted this Stock to be Rs. 450+ in nine months in our last month's forecast. But this stock rocketed in three weeks from Rs. 260 to Rs. 444.00 - an appreciation of 70 % in three weeks and not nine months ! Stay invested in this stock and exit when the SENSEX is close to 8000 and the price of about 600++. This telecom giant has acquired two sick companies in USA in the telecom sector in July'05. It wishes to become a global player in data and voice from India and into India.

b) HOCL : This PSU Chemical Stock closed today at Rs. 36.90. It tested a new 52 week high of Rs. 45.00 in July'05. As mentioned this stock is a turn around story. Stay invested and we stick to our prediction of Rs. 75.00+ in three months from now.

Our old favourite HELIOS and MATH closed today at Rs. 356.00. It tested a new 52 week high of Rs. 428.00 in the month of July'05. Please stay invested. It will test Rs. 500 in the next three months as recommended.

SRF closed today at Rs. 284.00. It tested a new 52 week high of Rs. 307.00 in July'05. Stay invested it will test Rs. 350+ in the month of Aug'05 or Sept'05.

A lot of blue chip stocks in the fronline and midcaps tested their new 52 week highs and/or life time highs. We track a few stocks and their new highs are under : :

1. MNC Pharma Major - AVENTIS : 1449.00
2. Cement Major - ACC : Rs. 452.00
3. Power Equipment PSU - BHEL : Rs. 1039.00
4. Diesel Engine Major - CUMMINS : Rs. 162.00
5) MNC Tyre Major - GOODYEAR : Rs. 98.00
6) ICICI Bank : Rs. 550.00
7) Cigarette, Hotels and FMCG Stock - ITC : 1775.00
8) EPC Major - L & T : Rs. 1308.00
9) FMCG Major - NESTLE : Rs. 800.00
10) EPC Major - NAGARJUNA CONSTNS. : Rs. 900.00
11) LNG Gas Major - PERONET : Rs. 57.00
12) TEXTILE Major - RAYMOND : Rs. 375.00
13) PETROCHEM Major - RELIANCE - Rs. 711.00
14) RELIANCE CAP - Rs. 460.00
15) TEA Major -TATA TEA : 690.00
16) WATCHES and JEWELLERY Co.- TITAN : Rs. 551.00
17) WIRE ROPES Co. - USHA MARTIN : Rs. 118.00
18) AYURVEDIC MED. Co.- KERALA AYUR : Rs. 41.00

There were about forty to fifty additional stocks other than the above which have tested new highs.

In the Indian Stock Markets we feel that one will have to be vey stock specfic to make money in the medium to long term. The multi-baggers have to be spotted in the Midcap and Smallcap sectors. We will recommend additional stocks in the due course of time. We are studying a few stocks !

In the meanwhile book profits till 7850+ level and sit on cash.

JULY 2005
The BSE SENSEX closed today Friday 8th July'05 at a bullish level of 7212 up 6.3 % from June 10th closing level of 6782. The intra month high and low were a whopping 7306 and 6757. The BSE SENSEX made history by testing a life time high of 7309 and a life time high closing of 7288 during the month. A good monsoon, amicable settlement of family dispute amongst the biggest private sector company in India - RELIANCE Group and heavy FII inflows from Japan and Taiwan rallied heavy buying of front line and midcap stocks on the Indian bourses.

BSE SENSEX breached the S1 level of 6840 and could not breach 6730 ( S2). In fact it rallied from thereon past 6955 (R2) and all important level of 7000 with relative ease. The BSE SENSEX was ignoring fundamentals on account of high crude oil prices. There was so much momentum in the SENSEX Stocks that the BSE SENSEX tested a new all time high of 7309 on 5th July'05 and closed at an all time high of 7288 on 6th July'05.

Japanese and Taiwanese are new FIIs who have turned to India. These FIIs have raised India Specific Funds and were buyers of all front line and blue chip stocks. Few of the SENSEX and blue chip stocks hit new 52 week or life time highs during this month. The FII investment in Indian Equities in 2004 calendar year was US $ 8.5 Billion. Till 30th June'05 i.e. six calendar months - FIIs had already pumped in US $ 4.5 Billion into Indian Equities. The analysts feel that in 2005 calendar year - FIIs may pump in funds in excess of US $ 9.0 Billion. Japanese FIIs have plans to pump in a total of US $ 4.0 Billion into Indian Equities. Japanese FIIs are shifting their funds from China to Indian Equities. This is a good sign for the Indian Markets and feather in the cap for the Indian Economy which is expected to grow at 6.0 to 7.0 % this fiscal.

The Indian Stock Markets were choppy but with a firm bullish undertone. There was a sharp correction before the London Blasts which we strongly condemn. The BSE SENSEX recovered smartly after the crash on 7th July'05 due to the terrorist attacks in London. The Indian Stock Markets were liquidity driven and were ignoring high crude oil prices in early June'05. In some midcap and small cap stocks even the fundamentals were being ignored. This is what we fear the most - Herd Mentality in Indian Stock Markets. Most of the midcap and small cap stocks were on fire without any fundamentals to back them. Just pure momentum. But when a sharp correction occurs - small and greedy investors are left with these penny stocks in their hands.

This has happened with investors many times in history but they never seem to understand or learn from history. Greed never dies as they say in Las Vegas ! We have been cautioning our esteemed investors that they should stay away from these stocks. Invest in fundamentally strong midcaps and small caps with an actual growth, turn around or merger/acquisition story. Do not be lured into momentum stocks in these categories as when the market corrects you have no exit route. I would like to quote legendary investor and my idol - Mr. Warren Buffet. " PRICE IS WHAT YOU PAY AND VALUE IS WHAT YOU GET ". These are golden words from this legendary investor from USA.

Judge stocks by their intrinsic value in addition to the fundamentals. Technicals are also misleading sometimes e.g. the liquidity driven rally as in Indian Stocks as above. The BSE SENSEX shot past all important 7000 mark with ease. We had predicted a resistance at 7000 level for BSE SENSEX. In fact after testing 6900 it just shot past 7000 with ease due to excess liquidity provided by FIIs. Indian domestic Mutual Funds and FIs were sellers in the market. But the appetite was more than supply !

Here is a list of some star performers with new 52 week highs or new life time highs :

i) ONGC - Life time high of Rs.1033.
ii) L & T - Life time high of Rs.1231.
iii) ITC - Life time high of Rs. 1709.
iv) COLGATE - New 52 week high of Rs. 257.
v) RELIANCE CAPITAL - New life time high of Rs. 426.
vi) RELIANCE ENERGY - New 52 week high of Rs. 706.
vi) SRF - Life time high of Rs. 242.
vii ) HELIOS and MATH - Life time high of Rs. 355.
viii) TITAN - Life time high of Rs. 455.
ix) TATA TEA - New 52 week high of Rs. 645.

The list is quite long ...... !

We expect the BSE SENSEX to be bullish for the balance three weeks of July'05. Since the BSE SENSEX is in un-charted range it is very difficult to predict the new high. We predict that BSE SENSEX will test a new life time high of 7500 by 31st July !

The levels to watch are :

S1 7000 S2 6900 S3 6840 S4 6750
R1 7300 R2 7420 R3 7500

If the BSE SENSEX can close for three consecutive days above the level of 7300 then it will hit 7500 in a matter of a week. The only spoil sport could be Crude Oil prices. Crude should stay below US $ 60.00 pbbl at NYMEX during the next three weeks or so. If this happens I am pretty sure we are heading towards 7500 levels for BSE SENSEX.

Expect a sharp correction anywhere from 7350+ levels. I would advise investors to book profits on stocks where they are sitting on profits and take cash out. Sit on cash for the correction to happen. At say 6840 or start buying blue chips again.

We have shortlisted the following new stocks which we recommend entry at say 6840 or lower BSE SENSEX :

a) VSNL : A telecom major from the TATA Group. It's 52 week high and lows are 281 and 157. It closed today at Rs. 266. At correction buy it at around Rs. 240+. We expect this stock to be Rs. 450+ in nine months from now.

b) HOCL : This is PSU Stock which makes Chemicals. This is a turn around story. It's 52 week high and low are Rs. 35.00 and Rs.13.00. It closed today at Rs. 31.25. Buy at around Rs. 27.00. We expect this stock to be Rs. 75.00+ in nine months from now. This is our multi-bagger for 2005.

We predict our old favourite HELIOS and MATH to test Rs. 500 in the next nine months or so. It closed today at Rs. 340. Remember we recommended this midcap software niche player at Rs. 80 in the month of Jan'05. We had first predicted a level of Rs. 180+. Then we revised the target to Rs. 240+ in March'05. Now well known brokerage houses are expecting this stock to test Rs. 400 in the long term. We picked this gem much ahead of the pundits !

We are revising our target for SRF to Rs. 350+ in the next six months or so. It closed today at Rs. 242 - a new life time high. The Stock is being re-rated by on account of much higher expected earnings in the next two quarters. This nylon cord manufacturer also manufactures refrigerant gases and is phasing out manufacture of CTC. As per Montreal Protocol for green house gases production cuts, this midcap company will be a beneficiary of extra funds from the Government of India. This is why a leading FII was chasing this stock from Rs. 60+ ! We spotted this star at Rs. 90.

We once again would like to caution our small investors not to invest money in penny stocks because of greed that these stocks give quick and multiple returns. Stay away from these penny stocks (with no fundamentals) as when there is sharp reaction, there is no exit route.

Investors are again advised book profits all levels above 7300+ on stocks where they are making profits. Do not buy fresh stocks at these levels of 7200+. Sit on cash and re-enter as explained above.

Happy investing or rather profit booking !

JUNE 2005
The update is delayed as we were not clear on the trend since the past six to eight weeks. In addition SW Monsoon is supposed to hit India in the first week of June. The same was delayed by a week.

The BSE SENSEX closed today - Friday,10th June'05 at a bullish level of 6782 up 10.2 % from 18th April'05 close of 6156. The intra period high and low for the BSE SENSEX was 6884 and 6121. The BSE SENSEX was not able to reach 6955 and fell short by 72 points. On the flip side the SENSEX could not test the 6070/6000 levels. This level of 6956 is all the time high for BSE SENSEX. If the SW Monsoon is normal - we predict that BSE SENSEX will breach 6956 and may even test all important mark of 7000 !

During the period the Small Caps and Mid Cap Stocks were on fire. The BSE Mid Cap Index was on fire and hit an all time high. We focus on front line stocks but will now onwards will have to focuss on the quality Mid Cap Stocks and Small Cap Stocks. The prime reason is that FIIs and Indian Institutional Investors are also concentrating on select Mid Cap Stocks. This sector has outperformed the BSE SENSEX in the recent six months or so. We are also going to focus on " turn around stocks " where we see a great potential. We will research as a few good companies in the Small Cap Sector too where we see there is a good return on investment.

We would like to caution our Investors that most of the Small Caps Stocks are moving only on momentum and they have no fundamentals to back them. Please be very cautious as when the markets correct sharply, the invetors will have no exit route to sell these stocks as there is very limited liquidity in these Small Cap Stocks.

Similar is the case with some of the Mid Cap Stocks. Only a few of these Stocks are potential winners. Rest are all moving up with the bullish momentum in the Stock Markets. Please be selective to pick Stocks in this lucrative Mid Cap Sector as this is the Sector where most of the action has been for the past few months. We will also focus in this Sector now and recommend some stocks.

We predict the BSE SENSEX to be bullish till end June'05. There could be a sharp correction in the BSE SENSEX but we feel that should be a 'buying oppurtunity'. The levels to watch for the next two weeks are :

S1 6840 S2 6730 S3 6640 S4 6520

R1 6900 R2 6955 R3 7000

Investors are advised to book profits when the SENSEX rallies past 6900 levels and sit on cash. We will advise re-entry with specfic stocks at the opputune time.

We had recommended some stocks in April'05. A brief analysis :

a) SRF : It tested Rs.183 during the period in consideration. We had set a target of Rs. 120 but this Stock leaped to Rs. 180+. A leading FII is chasing this stock. We hope investors booked profits at the right levels.

b) COLGATE : It tested Rs. 244 against our prediction of Rs. 220. New product launches in the Indian Market from this Oral Care major are the reason for the stock being bullish.

c) ITC : This was bingo ! It went beyond Rs. 1500+ and tested an life time high of Rs. 1615. The company announced a stock split and issue of 'bonus shares' for the investors.

d) GUJRAT AMBUJA CEMENT : The Stock tested Rs. 458 during the period but rewarded investors with issue of 'bonus shares' with
50 % shares as a 'free bonus'.

e) RANBAXY : We were very close on our prediction. The stock test Rs. 848 an then went upto Rs. 1102. It fell short of our prediction of Rs. 1200. We predict this stock will test Rs. 1200 by end June'05.

We are studying a few stocks in the Mid Cap Sector and in the Small Cap Sector which are based on fundamentals and have the potential to be multi-baggers for the 2005-06. We are also studying a few shares in the front line blue chip sector which will give at least 50 % return in the next nine months or so. We will recommend these stocks in our update for July'05 as per schedule. By this time we will be clear about the progress of SW Monsoon also, which has a big impact on the Indian Economy. Indian Economy still gets its
25 % GDP from Agriculture and this sector is dependent on natural rains.

We repeat - we advise investors to book profits in whatever stocks they are holding at all levels above 6900+

Happy Investing !

SPECIAL MID APRIL UPDATE

The BSE SENSEX closed today - 18th April'05 at a whopping low of 6156, down 6.8 % from the April 4th level of 6604. We had predicted that the BSE SENSEX could rally to 6900 levels but it could not breach 6650 levels even. From this level it crashed in two weeks to a intra day low of 6118 today. It however closed today at 6156, as mentioned above.

We had predicted on the flop side that BSE SENSEX could test 6000 level in April'05 and that at around this level investors should buy into three new stocks - McDOWELL, GUJRAT AMBUJA CEMENT and GE SHIPPING.

We advise investors to exit from Steel and other Non-Ferrous Metals Stocks. There is a considerable downside from today's levels.

We feel that BSE SENSEX will test a level close to 6000 within the month of April'05 and we wish to recommend a few additional Stocks to be bought between 6070 to 6000 levels or as advised hereunder :

d) SRF : This Synthetic Fibre manufacturer is a hot buy at around Rs. 90 with a stop loss of Rs. 80. We expect it to test Rs. 120 when the BSE SENSEX pulls back. This is a pure 'trading call'. Exit at around Rs. 120 levels.

e) COLGATE : This FMCG MNC Major is also a pure 'trading call'. Buy at around Rs. 186 with a stop loss of Rs. 180. Exit at around

Rs. 220 on the pull back rally.

The following are Investment calls over the medium term :

g) TATA POWER : Buy this Energy Major at Rs. 330 and hold for the medium term. Expect a 30 % return over the next three to four months. We expect a price of around Rs. 420 to 450.

h) AVENTIS PHARMA : Buy this MNC Pharma at around Rs. 1320+ and hold for the next three to four months. We expect this Stock to test Rs.1500+ levels.

i) RANBAXY : Domestic Pharma Companies are in heavy correction mode. Buy this Stock at around Rs. 850+ levels when the BSE SENSEX tanks and hold for the medium term. We expect this domestic pharma major to bounce back to Rs.1200 levels again.

j) ITC : This Cigarettes to Paper to Hotels to FMCG Major is a hot buy at around Rs. 1325. We expect a price of Rs. 1500+ in the medium term.

APRIL 2005

The Forecast is delayed by a couple of days as we were watching Crude Oil Futures at NYMEX for US Light Crude.

The BSE SENSEX closed today i.e. 4th April'05 at 6604 down 3.6 % from the close of 11th March'05 level of 6854, as of our last update. The intra period high and lows were 6882 and a scary low of 6321.

We had predicted a sharp correction in the BSE SENSEX but the correction was much sharper than our prediction. We had predicted that S2 level of 6550 will be tested but the BSE SENSEX sank to a level of 6320. The main reason was expiry of F & O Contracts on 28th March'05. The roll-over was smooth and the BSE SENSEX recovered smartly from the level of 6320 in a matter of days. Very choppy Stock Markets in India !

We feel that BSE SENSEX could rally strongly in the coming three to six weeks and investors should use this rally to exit from the Equities as explained later in this update. This rally would be purely technical pullback as per the Charts. The BSE SENSEX will drop sharply after this technical rally.

The levels to watch for BSE SENSEX for April'05 are as follows :

S1 6550 S2 6320 S3 6070 S4 5830

R1 6640 R2 6730 R3 6840 R4 6955

The S4 level as above is the 200 DMA for BSE SENSEX and is the long term support level. This level may not be tested in April'05.

On the Charts BSE SENSEX appears to be breaching R4 level of all time BSE SENSEX high figure of 6955. If Crude Oil prices dip below US $ 54 temporarily we might see BSE SENSEX at an all time high in end April'05 end or in early May'05. Yearly results for the last fiscal will also start pouring in after Mid April'05. Metals, Cement, Construction, Oil & Gas and Telecom Companies are supposed to come out with good results. Select IT Majors and MNC Pharma companies will also come out with some exciting numbers for the last fiscal which ened on 31st March'05. Just a reminder for our global readers - In India the financial year is from 1st April to 31st March.

Oil Prices are a major cause of worry for the Markets. US Light Crude Futures at NYMEX tested US $ 58.28 pbbl for May'05 delivery and 60.05 for Sept'05 delivery on 4th April'05. We had predicted this level of US $ 60.00+ for US Light Crude in our last month's forecast. Bingo ! God has been kind to me for Crude Oil predictions over the past few years ! Goldman Sachs is predicting a level of US $ 80 to 100 pbbl for US Light Crude in this calendar year.We feel this level is unrealistic and may not be achieved. Equity Markets will be bearish worldwide if Spot Crude at NYMEX stays above US $ 60++ till Sept'05. If Spot Crude at NYMEX breaches US $ 60 pbbl convincingly then expect a price of US $ 65+ pbbl in a matter of one week or so at NYMEX. This will effect Global Stock Markets and the Indian Stock Markets also.

Another specific concern for the Indian Stock Markets is the FIIs allocation for the Emerging Markets. There are rumours that emerging markets might get less allocation of funds due to interest rate hike in USA and slowdown of the said markets due to higher Crude Oil prices. We feel that INDIA is a shining star in Asia and will continue to attract FII funds as per last fiscal's levels if not more.

ONGC tested a new 52 week high of Rs. 1000 and so did IT Major TCS at Rs. 1475 during the period under review as per above dates.

We advise investors to exit from the Indian Equity Markets at levels close to 6900+ and have only one Stock in the Portfolio till the BSE SENSEX reacts to near 6000 levels. This one Stock is ONGC.

For the rest of the long term Stocks - Investors can book profits at the above said 6900+ levels and sit on cash to re-enter at around 6000 level in the coming six weeks.Investors can also go short at 6900+ levels in the F & O Segment.

We fancy the following new Stocks at BSE SENSEX of around 6000 :

a) Spirits Major - McDOWELL : It closed toady at Rs. 259. This Stock we had recommended a few year's back at around Rs. 50 and had predicted a price of Rs. 150. We advised investors to exit at Rs. 150. The 52 week high and low are Rs. 264 and 42 respectively. This Stock can zoom to Rs. 500+ in the next nine months or so as it has successfully bid to acquire M/s. SHAW WALLACE & Co. - Its nearest competitor.

b) Cement Major - GUJRAT AMBUJA CEMENT : It closed today at Rs. 424. The 52 week high and low for this stock are Rs. 469 and Rs. 250. This will give a 30 to 40 % return in the long term

c) Shipping Major - GE SHIPPING : It closed today at Rs. 164. The 52 week highs and low are Rs. 200 and Rs. 84 respectively. We expect a price of Rs. 220 in the long term.

Investors are ahead of choopy times in April'05. Please exit or book profits if BSE SENSEX rallies sharply and then sit on cash to

re-enter at around 6000 levels.

MARCH 2005

The Update for the month of March'05 is delayed on account of the following reasons :

a) The Union Budget is announced on 28th of Febraury every year by the Indian Finance Minister. The Budget was very well perceived by the Stock Markets. The Budget has implication on the Indian Stock Markets although the impact is weaning away as India is now a 'Market Economy' under WTO Guidelines.

b) It takes a week or so to understand the fine prints of the Budget. Details of the proposed Finance Bill for the next fiscal are available on Finance Ministry's Website. In brief - The Budget set Indian Stock Markets on Fire !

c) The trend was not clear as Indian Stock Markets were touching dizzy heights and valuations were being stretched to unrealistic limits.

We apologize for this ten days delay in the March'05 Update.

The BSE SENSEX closed today - Friday 11th March'05 at a level of 6854, up smartly ( 4.5 % ) from the close of 31st Jan'05 level of 6556. We had predicted in the last update that the BSE SENSEX could test 6800++ in Feb'05. We were very close !

The BSE SENSEX created history by testing an all time high of 6955 ( short of magical figure of 7000 !!! ) on 9th March'05 and created yet another landmark a day earlier when the BSE SENSEX closed at an all time high of 6915. The intra period ( 1st Feb'05 to 11th March'05 ) high and low for the BSE SENSEX were - 6955 and 6501 respectively.

The Indian Stock Markets were liquidity driven as FIIs till date in this calendar year have pumped in close to US $ 3.0 Billion in the Indian Equities. Banks are sitting on IPO Funds. MFs are also sitting on cash.

The focus has been on a few select front line Stocks but primarily on the Mid -Cap Stocks in Infrastructure, PSU Banks, Auto and Auto Ancilliary, Metal - both Ferrous and Non-Ferrous.

The only laggards were IT Stocks because of the weak US Dollar.

The disturbing factor is that penny stocks with no fundamentls ar also galloping ! Please stay away from these Stocks.

We feel that the BSE SENSEX is in for a sharp correction from the current levels ( 6850 ) but the undertone would be sideways for the next two weeks or so. The levels to watch till 31st March are :

R1 6950 R2 7000

S1 6720 S2 6550

We feel the BSE SENSEX will test 6720 for sure and if the FIIs are inactive for the next two weeks or so - then investors should be prepared to see a level of 6550. No need to panic. Time to pick up some fundamental Stocks in EPC Infrastructure, Steel, Cement and Shipping, which we will advise as the case maybe.

A brief synopsis of our recommended Stocks :

1. ARVIND MILLS : It closed toady at Rs. 125. Exit from this Stock completely. The Textile Story has turned into a Chinese Dragon. Post MFN Era - China is giving Indian Textile Export Majors a tough time.

2. CUMMINS INDIA : It closed toady at Rs. 123.20. Tested a new 52 week high of Rs. 139.00. Stay Invested. We stick to our target of Rs. 240.00 in a year's time.

3. TIMKEN INDIA : It closed today at Rs. 96.10. It tested a new 52 week high of Rs. 104. Stay invested and exit around Rs. 120.

4. MRPL : It closed today at Rs. 51.00. Stay invested. This will give multiple returns in this calendar year. We feel it will declare it's maiden dividend by Dec'05. Markets discount the future and we expect this stock to be around Rs. 100 in the next six months or so.

5. PETRONET LNG : It closed today at Rs. 44.70. Stay invested for handsome and multiple gains. This is the Stock for the next fiscal. It has already moved up by 100 % since we recommended at Rs. 21 a few months back.

6. TCS : It tested a new 52 week high Rs. 1435 today. Stay invested. Target - Rs. 1800+ as mentioned earlier.

7. UTI BANK : The Banking Sector Stocks have been on fire on account of Reforms announced in this Sector in the Budget. It closed tody at Rs. 261. It tested a new 52 week high of Rs. 264 during the period under review. Stay invested as we stick to our revised target of Rs. 300++ in the next three to four months after its maiden GDR Listing at NYSE.

Almost all fundamentally strong PSU Bank and Private Bank Shares have tested new 52 week highs during the period under review.

7. HELIOS & MATHEWSON : It closed today at Rs. 169. It tested our targetted figure of Rs. 180, as a new 52 week high during the period under reveiw. Bingo ! Book partial profits. Balance exit at Rs. 240+ in the coming weeks.

8. L & T : It closed today at a bullish level of 1092. It tested a new 52 week high of Rs. 1148. Book partial profits at Rs. 1200+. Balance keep for long term. This Stock can be Rs. 1800++ in the next nine to twelve months if the FIIs are bullish on India and the Indian Govt. keeps the Infrastructure as a priority.

We did not recommed second tier Infrastructure EPC Stocks - GAMMON INDIA, HCC, IVRCL and UNITECH. These stocks have also given 100 % returns from the time we recommended L & T post its Cement De-Merger. Investors can buy any of these four Stocks if the BSE SENSEX gives a sharp reaction till 6550 levels. We feel the valuations are a bit stretched but then in a bull market these fundamentlly sound EPC Infrastructure Stocks like Steel Stocks are having dream runs. Infrastructure Growth - Ports, Roads, Bridges etc. are need of the hour for the Indian Economy which is poised to grow at the rate 7.0% next fiscal.

9. ONGC : Our old favourite Stock is again in the limelight due to high Oil prices. It closed today at a new 52 week high of Rs. 940. We feel this Stock has further potential as we feel that Crude Oil prices will not soften in the next six to nine months.

Do not be surprised if US Light Crude at NYMEX tests US $ 60+ in the next few months This will cause some panic in the global markets and also Indian Stock Markets.

We feel ONG could be Rs. 1800++ in the next twelve months. Investors can buy on a reaction at say around Rs. 840.

We are not recommending any new Stocks at these levels. If the BSE SENSEX falls to 6550 levels we will submit a Special Update to buy Trading Stocks in Steel, Shipping and Cement Sector.

FEBRUARY 2005

The BSE SENSEX closed today i.e. 31st Jan'05 at 6556 down marginally from end Dec'04 close of 6603 . The BSE SENSEX tested an all time high of 6696 on 4th Jan'05. The intra month high and low for the BSE SENSEX for the month of Jan'05 were 6696 and 6070 respectively.

The BSE SENSEX was bullish in Jan'05 as predicted but could not breach past 6700 level as forecasted. It fell short of 4 points !

The FIIs have been net sellers of Indian Equities in the month of Jan'05. The BSE SENSEX pulled up smartly in the last week of Jan'05 as the Q3 results of a majority of blue chips were excellent. Secondly the Government of India made a very important announcement in the last week of Jan'05, that Non-Govt Provident Funds, Superannuation Funds and Gratuity Funds can invest w.e.f. 1st April 2005 - 5% of their corpus into Indian Equities and 10 % into Equities of Mutual Funds. This was a landmark announcement and injected adrenaline into the Indian Stock Markets. Analysts were talking of BSE SENSEX breaching 6000 levels but with this announcement the BSE SENSEX turned bullish and jumped from a level of 6100 to 6565 in four trading sessions.

We continue to be bullish for the month of Feb'05 and predict that BSE SENSEX will breach past 6700 level in Feb'05. We feel that BSE SENSEX may test 6800++ level in Feb'05.

We advise investors as below on some of our recommended Stocks :

1. PETRONET LNG : This closed today at Rs. 44.30 up smartly ( 41 % ) from Rs. 31.35 as of Dec'04 closing. It tested a new 52 week high of Rs. 49.00 in Jan'05. Sell 50 % of holding at around Rs. 60.00. Balance 50 % stay invested. The company is now approx. nine months in operations and is performing well. This will be multi-bagger of 2005-06 as mentioned earlier.

2. TCS : This Indian Software major closed today at Rs. 1300. It tested a new 52 week high of Rs. 1368 in Jan'05. Stay invested. Target price of 1800++ in calendar 2005.

3. CUMMINS INDIA : It closed today at Rs. 127.00 marginally up as compared to its close as of end Dec'04 close of Rs. 125.00. The company has declared good Q3 results, which can be read on the company's website. Stay invested. The company is launching additional range of Engines in the CNG Category. We are revising the target price from Rs. 180.00 to Rs. 240.00++ for this blue chip MNC Stock. There are talks that the Asia Pacfic Rim ( APR) countries will be supplied Engines from CUMMINS INDIA. This will the Asian hub for exports to the APR countries.

4. UTI BANK : It closed today at Rs. 206.00 up smartly from its Dec'04 close of Rs.185.00. Tested a new 52 week high of Rs. 210.00. Posted excellent results for Q3. Target price revised to Rs. 300.00++. Stay invested.

For the rest of our recommended stocks please follow the advise as in the Jan'05 forecast.

The Indian Stock Markets are in firm grip of bulls, for the next four weeks ahead of the Union Budget. The Finance Minister announces the Budget for the next fiscal ( 1.4.2005 to 31.3.2006 ) on 28th Feb'05 as is the tradition for decades. We feel that till 28th Feb'05 the BSE SENSEX will be bullish and may even test 6800+ levels. Cheers !

We are studying three additional Stocks - McDOWELL, SHAW WALLACE and NTPC. We will put a Special Update, if necessary in Feb'05

JANUARY 2005

<>The BSE SENSEX closed today i.e. 31st Dec'04 at an all time high of 6603. The BSE SENSEX tested an all time high of 6617 on 29th Dec'04. The BSE SENSEX created another history today by closing at a level above 6600 i.e. at 6603. Up smartly 5.9 % from the Nov'04 close of 6234. The intra month high and low for the month of Dec'04 were 6617 and 6221.

The BSE SENSEX was bullish in Dec'04 as predicted. The SENSEX breached the all important level of 6250 level easily. FIIs were very aggressive buyers of Indian Equities. FIIs pumped in around US $ 2.10 Billion into Indian Equities in the month of Dec'04. In the calender year 2003 - FIIs pumped in US $ 6.59 Billion into Indian Equities. In the calendar 2004 FIIs pumped in US $ 8.51 Billion.

We had predicted that if FIIs continue to invest in Indian Equities in Dec'04 also as they have been doing in the calendar year 2004 till Nov'04 - then BSE SENSEX would breach past the level of 6250. FIIs pumped in US $ 2.1 Billion in Dec'04 in Indian Equities and closed the calender year with record investments.

FIIs were very aggressive Buyer's into the blue chip Stocks with focus on Metals ( both Ferrous and Non-Ferrous ) , Infrastructure and selective IT Sector in Dec'04. Selective Mid Cap Stocks with good fundamentals also participated in the bull rally and are racing towards the next step in the ladder - large cap stocks.

The BSE SENSEX is now in 'uncharted territory' as there is no historical data to co-relate and analyse the same. The earlier all time level of BSE SENSEX - 6250 was breached in Dec'04 by a fair margin.

The BSE SENSEX could test any level in the months to come. The analysts in India are talking about a level of 7200+ in the next three to six months on the bull side. We tend to agree with these analysts and feel that even this level of 7200 will be breached if the Monsoon Rains in June'05 are normal. One could see a BSE SENSEX above 8000 levels by Sept'05, if monsoon rains are normal or are above normal in India in 2005. On the downside the analysts are talking about a level of 5400 or so in the next three to six months. We also feel that BSE SENSEX would stablize at around 5400 levels.

For the month of Jan'05 we continue to be bullish with SENSEX breaching past 6700 level. No new stocks are being recommended as of now. We advise investors as below on our recommended Stocks :

1. HELIOS and MATHEWSON : It closed today Rs. 84.00. We advise Investors to stay invested. We stick to our target price of Rs. 180.00++

2. MRPL : This is our multi-bagger of 2004-05. It closed today at Rs. 54.30. Up smartly ( 20 % ) from Rs. 45.00 as of close of Nov'04. Stay invested. We stick to our price of Rs. 100.00++.

3. ARVIND MILLS : This Textile major closed today at Rs. 132.30 up smartly ( up 16 % ) from Rs. 114.00 as of close of Nov'04. It tested a new 52 week high of Rs. 133.00 in Dec'04. Stay invested. We stick to our target price of Rs. 250.00.

4. GTN TEXTILES : This Cotton Yarn major closed today at Rs. 73.15. It tested a new 52 week high of Rs. 80.00 in Dec'04. We hope investors exited this stock at Rs. 80.00 as advised in last month's forecast. Our prediction was again bingo !

5. PETRONET LNG : This closed today at Rs. 31.35 up smartly ( 33 % ) from Rs. 23.40 as of Nov'04 closing. It tested a new 52 week high of Rs. 33.00 in Dec'04. Stay invested. This will be multi-bagger of 2005-06.

6. TCS : This Indian Software major closed today at its new 52 week high of Rs. 1338.00 up 4% from Nov'04 close of Rs.1287.00. Stay invested. This is a Stock for every Indian Investor's Portfolio. Stay invested.

7. L & T : This Engineering Major closed today at Rs. 982.00 up from its Nov'04 close of Rs. 912.00. It tested a new 52 week high of Rs. 1021.00 in Dec'04. Book partial profits at Rs. 1200+.

We had recommended a few additional Stocks :

1. TIMKEN INDIA : It closed today at Rs. 70.55 marginally up from Nov'04 close of Rs.69.00. Stay invested. Target price is Rs. 120+ in the next six months.

2. CUMMINS INDIA : It closed today at Rs. 122.40 marginally lower than it's Nov'04 close of Rs. 125.00. Stay invested. Target price Rs. 180+

3. UTI BANK : It closed today at Rs. 185.00 up smartly from its Nov'04 close of Rs.166.00. Stay invested. Target price could be Rs. 250 to Rs. 300.

4. STANDARD INDUSTRIES : It closed today at Rs. 19.60 marginally up from Rs. Rs. 19.40 as the closing price as on Nov'04. Stay invested. EXIT from this Stock at Rs. 35.00 to 38.00

The Indian Stock Markets are in firm grip of bulls. Happy Investing in Indian Stocks !

DECEMBER
The BSE SENSEX closed today i.e. 30th Nov'04 at an all time high of 6234. The BSE SENSEX on 9th Jan'04 tested an all time high of 6249.50 but closed at 6199. The BSE SENSEX created history today by closing at a very bullish level of 6234. Up smartly 5.8 % from the Nov'04 close of 5891. The intra month high and low for the month of Nov'04 were 6248 and 5878. The BSE SENSEX just fell short of testing the all time high of 6249.50 as on 9th Jan'04.

The BSE SENSEX was bullish in Nov'04 as predicted. The SENSEX breached the 6000 level easily. It also broke all important level of 6150 in Nov'04. FIIs were very aggressive buyers of Indian Equities. FIIs pumped in around US $ 1.2 Billion into Indian Equities in the month of Nov'04. In the calender year 2003 - FIIs pumped in US $ 6.59 Billion into Indian Equities. In the calendar 2004 till 30th Nov'04, FIIs have already pumped in approx US 7.0 Billion. It is expected that in calendar 2004 - this figure might be close to US $ 8.0 Billion. In other words analysts feel that in the month of Dec'04 - FIIs will pump in US $ 1.0 Billion into Indian Equities. If this happens, then the BSE SENSEX will easily go past the all time high of 6249.50 and will enter into ' Unchartered Territory '.

FIIs were very aggressive Buyer's into the front line IT Sector, Banking and Auto Component Sector Stocks in Nov'04. Indian Operators were very active in the Mid Cap Stocks. Mid Cap Stocks are having a dream run but some of these Stocks are not based on fundamentals. Investors have already been cautioned not to invest into Mid Cap Stocks without checking the fundamentals.

We feel the BSE SENSEX will be in a bullish mode in Dec'04. The levels to watch are :

S1 6150 S2 6000 S3 5880
R1 6250 R2

Beyond 6250 the BSE SENSEX could be heading anywhere. It could test 6500 to 6700 levels in the next few months to come. This depends primarily depends on the FII activity. FIIs have favoured Indian Equities ahead of China and Brazil. If FIIs pump in another US $ 1.0 Billion in Dec'04 as anticipated by the analysts then we can see a level of 6400+ in Dec'04 itself. We feel that BSE SENSEX will give a sharp 200+ point reaction after crossing 6250 levels. At this reaction we recommend investment into four new Stocks.

We are recommending four additional Stocks to be bought for medium to short term horizon ( 3 to 6 months ) as below :

1. TIMKEN INDIA : It is a leading manufacturer of Taper Roller Bearings and is a Indian Subsidiary of Automotive/Railways Bearing Giant - TIMKEN Inc. of USA. It closed today i.e. 30th Nov'04 at Rs.69.00. Its 52 week high and low are Rs. 87.00 and Rs. 33.00. Keep a buying target figure of Rs. 60 to 62. Target price Rs. 120+

2. CUMMINS INDIA : It is a leading manufacturer of Diesel Engines in India both for Automotive and Stationary use. This company too is now an Indian subsidiary of CUMMINS Inc. USA - a global giant in Diesel Engines. It closed today at Rs. 125.00. It's 52 week high and low are Rs.135.00 and Rs. 90.00 respectively. Keep a buying target price of Rs. 118 to 120. Target price Rs. 180+

3. UTI BANK : We did not recommend any Banking Stocks over the past two years as we were worried about the high level of NPAs. This Banking Stock closed today at Rs. Rs.166.00. It's 52 week high and low are Rs. 179.00 and Rs.84.00. Keep a buying target of Rs. 145 to 150. This Bank could be a " Takeover Target ". Investors are advised to keep watchful eye on this Stock as regards the volumes traded on the BSE or NSE. If the Stock is traded heavily - there is some action in the Stock. Target price could be Rs. 250 to Rs. 300.

4. STANDARD INDUSTRIES : This is an old Textiles Stock and closed today at Rs. Rs. 19.40. Buy this Stock at market prices - say Rs. 20.00 to 21.50 We feel this Stock will be Rs. 40.00++ in a matter of three months. Post Textiles QUOTA Dismantling from Jan'05 onwards - this Stock will see a frenzied activity. EXIT from this Stock at Rs. 40.00.

We had recommended some Stocks in Oct'04. A brief synopsis :

1. HELIOS and MATHEWSON : This Software Stock tested a level of Rs. 211.00 on a cum-bonus basis. We hope investors booked partial profits. Anyway it closed today ex-bonus level at Rs. 88.00. We advise Investors to stay invested. We stick to our target price of Rs. 180.00++

2. MRPL : This is our multi-bagger of 2004-05. It closed today at Rs. 45.00. Stay invested. We stick to our price of Rs. 100.00++.

3. ARVIND MILLS : This Textile major closed today at Rs. 114.00 up smartly from Rs. 84.00 as of 4th Oct'04. It tested a new 52 week high of Rs. 119.00 in Nov'04. Stay invested. We stick to our target price of Rs. 250.00.

4. GTN TEXTILES : This Cotton Yarn major closed today at Rs. 72.00 ( new 52 week high ) up smartly from Rs. 53.00 as of 4th Oct'04. Exit at Rs. 80.00+

5. PETRONET LNG : This closed at Rs. 23.40 marginally down from Rs. 24.00 as of 4th Oct'04. Stay invested. This will be multi-bagger of 2005-06.

6. TCS : This Indian Software major closed at its new 52 week high of R. 1287.00 up smartly from 1081.00 as of 4th Oct'04. Stay invested. This is a Stock for every Indian Investor's Portfolio. Stay invested.

7. L & T : This Engineering Major closed today at its new 52 week high of Rs. 912.00 p smartly from Rs. 874.00 of 4th Oct'04. This is a Stock for every Indian Investor's Portfolio. Stay invested till further advise.

In August 2002 we had recommended LIQUOR and SPIRITS Stock - McDOWELL at a level of Rs. 45.00. We had predicted that this Stock will be Rs. 150.00 in about one year's time. We were off by 12 months or so. McDOWELL closed today at Rs. 124.00 but tested a 52 week high of Rs. 136.00 in Nov'04. This Stock will be Rs.150.00+ in the very near future. Investors who hold this Stock are advised to completely exit from this Stock at around Rs. 150.00. Some Market Pundits were making a laughing stock of our prediction in August 2002 about this Stock. These guys called me a few days back and were amazed about the bull run in the Stock. God has been kind !

We predict Stocks in our own queer ways and most of the time our long term predictions have been 'Bulls Eye'. We again repeat Investors who have the holding capacity for medium to long term and who follow our timely entry/exit directions, will for sure make big bucks in the Indian Stocks.

The Indian Stock Markets are in for a big Bull Run in the coming months and all the negative news is being discounted. Happy Investing in Indian Stocks !

The information above is provided by the source indicated and presented by the Astrologers Fund Inc. Neither the Astrologers Fund Inc. nor the source guarantee that the information supplied is accurate, complete or timely, or make any warranties with regard to the results obtained from its use. The Astrologers Fund does not guarantee the suitability or potential value of any particular investment or information source. Remember always to check with your licensed financial planner or broker before acting. This is just the starting point of your research and you must carefully investigate before you buy/or sell.