Nifty crosses 11,000 mark

BLOG MEANT FOR 13 JULY 2018 Friday

Dear friends,

Today, Nifty crossed the 11,000 mark once again after more than 5 months. The Sensex also crossed its previous life time high. The positive sentiment in global markets and no particularly negative domestic news has helped our markets reach all time highs.

European and US markets continue to stay positive tonight too.

Nifty is in HOLD zone for short term.

The indications for individual stocks for short term only are –

DON’T BUY ZONE – SBI, VEDANTA, TITAN, HINDALCO

HOLD ZONE – TCS, INFOSYS, HDFC, MARUTI, ASIAN PAINT, HDFC BANK,  YES BANK, ITC, RELIANCE INDUSTRIES, AXIS BANK

WAIT TO SELL – M&M

——

As you would have heard and read, Vedanta’s Copper plant in Tamil Nadu has been closed due to environmental concerns. This negative news has pushed the share price down by around 35% in the last 3 months or so.

Although, the Tamil Nadu plant is only one of its plants, investors have reacted very negatively to the news. Also, simultaneously metal prices such as zinc, copper etc globally have fallen and hence, investors are expecting lower profits in the coming months and hence the share price fall.

However, metal prices fluctuating is a normal phenomenon based on demand and supply globally and all companies in the sector face such issues.

Investors who have been investing in Vedanta for long term have the following options in front of them –

1. Sell Vedanta at current prices, bear the loss and re-allocate the money in other performing stocks.

OR

2. Hold Vedanta without worrying too much about the current situation and have faith in the strength of the company to bounce back in the future even if it means further fall in share price in the next few months.

It is just like deciding whether to keep a particular player in the team when the player has been having a tough time due to personal bad performance and also difficult playing conditions.

The decision is not a simple one and each person will have a different perspective to the above situation.

Only time will tell which of the above decisions was better.

If you do not have risk appetite, and cannot bear to see any further fall in prices, we suggest you to sell it, book the loss and re-invest the money in other stocks for long term.

If you have risk appetite and are ready to Hold, hoping that in the years to come the returns would be good, then you can continue to Hold.

Either way, read more about the company on the internet and you will have more information to decide what to do about Vedanta.

———-