Modi under attack from former die-hard loyalists for alleged failure to deliver on ‘acche din’
Modi’s promise of ‘acche din’, which propelled him to electoral success, has apparently not been delivered according to experts.
This has caused resentment amongst his die-hard supporters.
We saw a glimpse of this in the Gujarat elections when the rural folk gave NAMO thumbs down and voted for his adversary RaGA.
Even Arnab Goswami who is alleged by his detractors to be a ‘mouthpiece’ of the Government expressed his dissatisfaction at the state of affairs in the economy.
— Republic (@republic) January 27, 2018
#Budget2018 Epic comment in Eco Survey ?: “The twilight of the Govt’s current term is an appropriate juncture to step back & draw broader lessons for the Indian economy going forward” In short no Acche Din in sight !
— Meera Sanyal (@meerasanyal) January 29, 2018
RaGa took a dig at Modi by advising voters to sing Bobby McFerrin’s classic song “Don’t Worry Be Happy”.
Industrial Growth is ⬇
Agricultural Growth is ⬇
GDP Growth is ⬇
JOB Growth is ⬇
"Don't worry Be Happy!"https://t.co/nXsHWvGuo3
— Office of RG (@OfficeOfRG) January 29, 2018
Udayan Mukherjee resents non-taxing of LTCG tax
Udayan Mukherjee, the consulting editor with CNBC-TV18, has written a piece in which he claims that the non-taxing of long-term capital gains is “unconscionable”. He argues that if “ordinary hard-working, salaried folk” can pay income-tax, there is no reason why investors should not do so.
He has also claimed that “‘achhe din’ still remains a mirage” and that NAMO will resort to “Hindutva” to secure votes.
His precise words are as follows:
“After four years of falling short, the BJP knows that it cannot go back to the larger, non-urban electorate with economic delivery as its election plank. For this section, ‘achhe din’ still remains a mirage and any mention of it may actually rile sentiments. We saw glimpses of it during the recent Gujarat elections. Much more prudent, then, to fall back on good old Hindutva to win votes in the crucial Hindi heartland. The choice of Yogi Adityanath as the chief of India’s most populous state is the biggest proof of Modi’s conviction that Hindutva trumps economics any day, in the villages of north India.”
However, Udayan Mukherjee’s theory did not meet with much support from readers.
“The Nehruvian Seculars are loosing their mental balance and are fit cases for long term admission into NIMHANS, Bengaluru, in the larger interest of their mental health, as also sparing us readers from this daily Inquisition of arrant nonsense,” Balakrishnan Hariharan fumed.
Suresh Chennala was also not impressed.
“All these media guys were very silent during Congress regime. They have now woken up from their deep slumber and crying. Big problems need time to fix,” he said.
A similar sentiment was expressed by knowledgeable investors on twitter about Udayan Mukherjee’s views.
If we don't cut corporate taxes, to match global standards indian goods and services will become uncompetitive with their global peers. jobs will be lost. growth will be stalled. We all will be equally poor just like in commie paradisees elsewhere in the world.
— Sumit Sethi (@Sethinomics) January 29, 2018
It is worth recalling that Shankar Sharma and Samir Arora have already sent the clear warning to Arun Jaitley that any attempt by him to tax long-term capital gains will put an abrupt end to the Sensex rally and cause flight of trillions of dollars from India.
Sanjay Sinha of Citrus Advisors expressed the same opinion.
“Markets will fall if LTCG comes,” he said bluntly.
Live | Markets will fall if LTCG Comes: Sanjay Sinha, Founder, Citrus Advisors.
Watch here: https://t.co/kfFXrehZIb #ModiBooster2018 #Budget2018 #EconomicSurvey2018 @sanjay_sinha65 pic.twitter.com/yLNvKnVCyB
— Zee Business (@ZeeBusiness) January 29, 2018
No risk of LTCG tax now
NAMO and Arun Jaitley appear to have got the clear message that they should not mess around with LTCG tax as that can have draconian consequences on the stock market.
The revenues that one can harvest from the LTCG tax is not worth the damage that it will cause.
Udayan Mukherjee confirmed this fact.
“The finance minister has already soothed the anxieties of billionaires by promising that there won’t be any such tax,”.
Amar Ambani of IIFL also expressed the same view.
“I reckon that the government will not like to dent the improving investor sentiment where equity participation still remains low around 5-6% of the household savings”.
He did, however, caution that the Government could change the long-term capital gain classification criteria from one year to two years.
Sanju Verma, the spokesperson of the BJP, also confirmed that only a change in the holding period for LTCG exemption may be brought in by the Budget.
— BTVI Live (@BTVI) January 22, 2018
Top 10 stocks to buy (trading ideas based on technical parameters)
Now that the risk of LTCG tax spoiling the party is not there, we can resume our favourite activity of cherry-picking the best stocks to buy.
For this, Kshitij Anand of moneycontrol.com has spoken to leading experts like Rajesh Palviya of Axis Securities, Sameet Chavan of Angel Broking, Mazhar Mohammad of Chartviewindia.in, Aditya Agarwal of Way2Wealth etc and persuaded them to reveal their top 10 stocks to buy.
These stock recommendations are the following:
(1) Majesco: BUY| Target Rs702| Stop Loss Rs481| Return 24%
The stock has been maintaining its sturdy structure ever since we witnessed a trend reversal around 400 in the month of September 2017.
Recently, there was a breakout seen from the congestion zone around Rs560 along with significantly higher volumes. This development confirmed a ‘Bullish Flag’ pattern on the weekly chart and thereby projecting much higher levels in months to come.
Thus, we recommend buying this stock for a target of Rs.702. The stop loss should be fixed at Rs. 481.
(2) Suven Life Sciences: Buy above Rs223| Target Rs268| Stop loss Rs196| Time frame 15 to 21 trading session| Return 24%
Looking at the weekly chart, the stock has confirmed its breakout from downward sloping trend line during mid-October 2017 which triggered a fresh buying interest.
In that optimism, the stock rallied towards 230. Subsequently, stock witnessed profit booking which led to gradual correction followed by consolidation.
Now, the daily chart has formed a Bullish Cup & handle pattern and the formation of handle formation is in process. The said pattern will be confirmed once stock breaches the Rs223 levels.
In that case, we expect an acceleration of bullish momentum and stock likely to rally towards Rs268. A stop loss should be placed below Rs196.
(3) LIC Housing Finance: Buy at CMP 559| Target Rs627| Stop loss Rs535| Timeframe 15 to 21 sessions| Return 12%
Looking at the daily chart, the stock has formed a strong base near 540 – 535 zone and due to recent consolidation stock formed inverse head & shoulder pattern on daily chart.
The daily RSI (14) has signaled a probable range shift. Hence, we recommend traders to buy this stock at current level off Rs565 with a price target of Rs627. A Stop loss should be placed at Rs535 on a daily closing basis.
(4) Sun Pharma: BUY| Target Rs650| Stop Loss Rs567| Return 12%
This counter appears to be on the verge of a breakout above its three old downward sloping channel. A sustainable close above 600 can signal the end of its prolonged downtrend which can kick in a medium-term uptrend in this counter.
Hence, in anticipation of such a breakout, traders should go long for the initial targets placed at Rs650 with a stop below Rs567 on closing basis.
(5) Tata Elxsi: BUY| Target Rs1190| Stop Loss Rs1000| Return 9.4%
This counter registered a breakout above its three-month-old ascending channel which should accelerate its upmove further towards its lifetime highs of Rs1200.
Considering the volatile nature of this counter, traders should adopt a two-pronged strategy of buying now and on declines around Rs1030 if available at those levels. A stop for the trade should be placed below Rs1000 on a closing basis for an initial target of Rs1,190.
(6) Vedanta Ltd: CMP Rs345.4| Target Rs370-376| Stop Loss Rs325| Time 8-15 days| Return 9%
The most prominent observation on the price chart of Vedanta is that the entire consolidation underway since November 2017 till date has formed a Cup and Handle formation.
The breakout of this formation is witnessed at 345 levels on the daily chart. The stock is sustaining above its 20, 50, 100 & 200 day SMA which supports bullish sentiments ahead.
On the volumes front, the stock has witnessed a significant rise in breakout level indicating increased participation on the rally.
Both weekly & monthly strength indicator RSI is in bullish territory and sustaining above their reference lines which signals strength and upward momentum in price. Thus, taking into consideration the above factors, the maximum upside can be expected to 370-376.
(7) Motherson Sumi Systems Ltd: Sell around Rs370 – 375| Target Rs340| Stop loss Rs389| Time frame 15 to 21 trading sessions| Return 8%
Looking at the daily chart, the stock has been in a long-protracted uptrend since past several months and in that optimism, the stock hit a fresh all-time high of around Rs396.
Subsequently, stock saw mild profit booking which was followed by consolidation. As a result, the stock is forming a triangle pattern. The daily RSI (14) is struggling to cross 60 levels which doesn’t bode well for bulls.
Also, we are observing three-point bearish divergences on the weekly chart. Hence, we advocate traders to go short in this stock around Rs370-375 with a price target of Rs340 and a stop loss placed above Rs389.
(8) ITC: BUY| Target Rs304| Stop Loss Rs258| Return 8%
After taking a strong knock during the midst of the July month, this stock slipped into a consolidation mode and has contributed nothing in the gigantic rally our markets experienced meanwhile.
Now, looking at past couple of weeks’ price action, it appears that the stock is out of its ‘Sleep Mode’ and poised for a decent up move.
The strong base building process has already been done around 250 – 260 and unless we don’t see any unfavorable outcome from the budget (excised duty on cigarettes), this stock is likely to do well in coming weeks.
Considering it’s over sensitiveness to this announcement, traders are advised to follow strict stop loss at Rs.258 for any long positions. One can look to buy around Rs.275 for a target of Rs.304.
(9) Adani Ports: CMP Rs436| Target Rs460-470| Stop Loss Rs418| Time 8-15 days| Return 7.8%
The stock has witnessed the breakout of symmetrical triangle pattern breakout on weekly chart at427 level. The stock was consolidating in range of 380-425 range since last three months.
The breakout of the Triangle pattern suggests stock can move towards 460-470 level in the short term. The stock is sustaining above all its important moving averages which support bullish sentiment ahead.
The weekly and the daily strength indicators are in positive territory which indicates the bullish trend to continue in short term.
(10) Reliance Industries: BUY| Target Rs1020| Stop Loss Rs934| Return 6%
This counter appears to be in a multi-week corrective and consolidation phase after hitting a lifetime high of Rs957 in last October.
Hence, a current breakout above this high couple of days back with a gap up is encountered with selling pressure. However, as strong support is placed in the zone of Rs940-934, one should make use of the current weakness and go long as it will sooner than latter registers a sustainable breakout above 960 with a target of 1020. A stop for the trade should be a close below 934.
There is no doubt that Budget 2018 will be a turning point for the stock market.
Best rural and agriculture stocks to buy as rural voters will be wooed
Experts have opined that NAMO, after the battering he received at the hands of RaGA in the Gujarat elections, is likely to shower mega goodies on the rural sector (see NAMO Zinda Hai! Get Ready For Mega Reforms To Rural Sector & Multibagger Gains From Agri Stocks).
This step is necessary to win back the affection of rural voters who are alienated with the BJP and gave the party thumbs down in the recent elections.
Other experts have confirmed this (see With elections coming up, Modi government will aim to woo rural voters in budget).
We have to position ourselves in the choicest farm related stocks because they are likely to surge like rockets.
A ready-made list of high-quality agriculture and rural stocks that we should tuck into this has already been short-listed by leading experts.
Secular stocks to buy now with potential for up to 100% + gain
There is yet another set of all-weather or secular stocks that have been identified by experts as being ripe for a buy now.
These are fail-safe powerhouses that are not dependent on electoral sops for their prosperity.
Some of the stocks are claimed to have an upside potential in excess of 100% and have to form part of our portfolios (see Top Ten Best Stocks To Buy For 100%+ Potential Gain)