8-12 April 2024 | Bazaar This Week

Bazaar Updates for 8-12 April 2024 and more...

Hey there 👋🏼

After a smooth upward sail all week, markets crashed ~1% on Friday, ending the positive streak. Closing the week at 22,519, Nifty continues to trade above its 200 DMA with an RSI > 50. Midcaps, smallcaps, and most sectors ended in the red as well.

Let’s zoom in on what happened in the markets this week…

📈 Bazaar This Week (8-12 April 2024)

🚀 Stocks In Focus

> HDFC becomes the first private bank to open a branch in Lakshadweep
> NTPC Green finalizes four investment banks for Rs 10,000 crore IPO
> Tata and Jindal among top five cos to bag ₹1,586-cr Railways order
> Maharashtra Seamless receives order worth Rs 674 crore from ONGC
> Tata Motors and Shell partner to expand EV charging network in India

📌 Staying updated with the latest news is one thing, but analyzing stocks in detail to find hidden gems is another. Learn different strategies that’ll help you spot multi-bagger stocks in Mr. Arvind Kothari’s How to Pick Stocks for Long Term course.

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🇮🇳😳 Is it too late to invest in India?

India looks overvalued…

Nifty touched its all-time high of 22,775.70 this week. Its P/E of 23.1 is far above its 2-year average while the forward P/E ratio of the MSCI India Index (22.2) outpaces that of emerging markets (11.8), China (8.9), and the US (21.1). More so, India has surged ahead of Hong Kong to claim the spot as the world’s 4th largest stock market as of January 2024.

This trend extends to mid caps and small caps, with indices like the Nifty Midcap 100 and Smallcap 100 exhibiting elevated P/E ratios, signaling a premium over historical valuations for many stocks.

Are these valuations justified?

Or is it just the beginning?

In the words of emerging markets lover Mark Mobius,

While the current P/E ratios may seem high, they primarily reflect past performance and don’t fully capture the prospective rapid growth in earnings, potentially making Indian stocks more attractive in the long term.

Last week, SEBI chief Madhabi Buch also tried to justify these premium valuations by saying that they reflect the “trust & faith the world has in India”.

There are a lot of arguments that support these valuations (and further rise):

  • Infrastructure spending - be it highways, buildings, or institutions

  • Rapid manufacturing growth and policy push for the same

  • The expected rise of the Indian ‘affluent class’ by 2027

Not to mention the losing streak of other countries like China and an assumed political stability (you know who we’re talking about) are also helping.

How do we make the best of this new (& potentially fundamental) stock market frenzy? We have a cool investing strategy that works…

Using the pick & shovel investing strategy

Not to mention that while only 3% of the Indian population invests in the stock market, the participation is at ~13% for China and ~55% for the US. There’s still so much room left 🚀

A great method of picking stocks during such time is to look for companies that ‘grease the wheels’. For example,
- CDSL, a company that digitally safeguards our stocks, has doubled in the last year
- Stock brokers like Angel One have also given solid returns of 128% in the last year
- Mutual fund companies, like HFDC Asset Management have also been a favourite recently

Picking stocks that support the main trend through their business is called the pick & shovel strategy.

Learn how to apply the pick & shovel strategy, plus 3 other ways to pick multi-bagger stocks in Mr. Arvind Kothari’s How to Pick Stocks for Long Term course on Upsurge.club, whose smallcase has delivered a CAGR of >50% in the last 3 years!

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👀 Other Interesting Links…

🎧 After watching this podcast with Kaushik Akiwatkar, you’ll realize the real power of candlesticks ⚡️

💡 Our latest course with Mr. Dinesh Nagpal reveals an effective RSI Divergence Strategy

📈 India now has more than 15 crore demat accounts, is India’s bullish momentum the reason?

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