IOCL Share Price And Crude Oil Trends: What Retail Investors Should Know

Nifty & Sensex are rejoicing at a new all-time for the sixth consecutive week on the back of global liquidity.

Wow! It was the seventh consecutive week when the Indian equity market ended with gain whereas it was a sixth consecutive week where Nifty and Sensex ended at new heights. Nifty hits high of 13772 whereas Sensex hit a high of 47026 and they both ended with a weekly gain of around 2%. If we talk about last week’s outperformer then Pharma and IT sector lead the rally where the Nifty Pharma index gained 3.21% and the Nifty IT index gained 2.61%.

The most important question is what is propelling such a stellar rally in the market. So the answer in one word is “liquidity”. Yes, it is the liquidity that is causing rally across all asset classes whether it is Equity, Gold, Silver, Crude Oil, Metal, and even Bitcoin which has crossed the $20000 mark for the first time in history.

There was a US fed meeting last week where they kept interest rates unchanged which is near to zero and raised US GDP forecast to 4.2% from 4% but the main outcome of the meeting was the speech of Fed chairman Jerome Powell where he says that interest rates will continue to remain low and Fed will continue its bond-buying program to infuse liquidity in the system which is the reason for bullish trend got further momentum.

If we analyze the data then FIIs who are the main drivers of this rally bought Rs. 11804Cr while DIIs are still in the selling mode who sold Rs. 11023cr last week.

If we talk about the F&O data then FIIs’ long exposure in Index future stands at 68% vs 77% last week while PCR is trading at 1.62 level which is a comfortable level but once it had reached to 1.89 marks last week that’s why we saw a profit booking in the first half of Friday’s trading session.

What the Technical Chart Says:

Nifty is in strong bullish momentum but 13770-13820 is an immediate resistance zone where it can see some supply pressure above this 13873/13985 will be the next resistance levels. On the downside 13650 will be an immediate and key support point because below 13650, there will risk of profit booking towards 20-DMA of 13300 where 13500 would be an intermediate support level.

Banknifty is facing resistance in supply zone of 30800-31000 where 30200-30000 is an immediate and critical demand zone; below this, there will be a risk of any serious profit booking where 29000 will be the next important support level while if it manages to take out 31000 levels then we can expect a rally towards 31500/32000 levels.

Important cues for the Next Week:

• There is news in the media about a 7926 cr fraud by a Hyderabad-based firm through a Bank consortium led by Canara Bank. It will be important to see how the market will react to this news especially banking stocks.
• The market is waiting for the third package from the US government.
• FIIs’ behavior will remain key for the market direction as they are driving this bull run.
• Covid19 cases and vaccine-related news will continue to impact the stock market.

Crude oil price is trading at a nine-month high after declining in last week US crude inventory data and showing optimistic views over the coronavirus relief package in the US. However, upside movement is controlled due to the increase in Gasoline Inventory and lower fuel demand.

U.S. West Texas Intermediate (WTI) crude oil futures shined by 25 cents, 0.46%, from $47.62 to $ 47.84 a barrel. Brent Crude Future rose by 32 cents, or 0.63%, from %50.76 to $51.08. Both benchmarks are trading near nine months high, which is high near early march.

Also, on Wednesday the US Fed announces that the interest rate will remain unchanged, which is 0.25% and in addition adds a stimulus package to boost the relief in Coronavirus and unemployment.

At the same time due to a boost in logistics and e-commerce driven trucking and transportation diesel consumption increased, which is signalling a positive strength to the petroleum market. Higher diesel prices are adding more profits for refineries from processing a barrel of light crude to fuel.

Meanwhile, the oil market outlook is mixed as increased gasoline inventory and lower fuel demand is showing some pressure, while at the same time declining US crude inventory and stimulus relief are adding positive strength in the market.

Similarly, on a technical chart MCX Crude Oil price has shifted above the 138.2% Fibonacci Retracement price extension level 3479 and 100 days SMA’s level 3476, which will act as immediate support levels for the counter. An indicator RSI(14) is moving above level 60, which has witnessed bullish sentiments in the counter for the short term. On the other hand, the price may face resistance near 3750-3770, which is above near 200 points from CMP, which means crude oil price has more upside strength till 3700.

Financials of a company are always complex terms which are not easily understandable. They are the actual report card of a company that represents the performance every year. Sometimes results are good sometimes results are bad. For an individual, it is very essential to under these complex figures because the future growth depends on these current numbers only, just like our marks define our progress. Every year this report card shows different results, sometimes good, bad average, or below average.

Every business faces various situations throughout the year and tries to adopt the changes for its survival. But how a common individual understands this as they only understand what a company shows. For example, a company in its quarterly results declares a growth of 10% but still has a loss in revenue. For an individual, growth attracts but still concerns about the revenue. Which makes it complex for him to understand should he invest in the company or not.

A common person with zero knowledge of analyzing the financial statements only looks at the growth factor.

Some Common Points to Check Company's Health

Nowadays many financial websites are available which helps to make this complexity easier, but still one should look deep into it Because this financial data can be easily manipulated. So, one should look into some common points to check the company's health just to make sure it is worth putting money into it or not.

Earnings

One should check the earnings of the company comparing it with its last quarter earnings and then based on year on year, maybe one can find some quarters are good some are bad but on a yearly basis, the company would reflect a true picture. Earnings should be from its main business not from any other operations.

Controlled Expenses

When a person is analyzing earnings, one should monitor the expenses too Because in business expenses are also an important part, If a company is earning more than it's expenses then that's a favorable condition, But if even after earnings are improving still expenses are more than it’s not a favorable situation for the company.

Debt

A businessman for expansion of his business took some long-term loans just to make availability of funds would go in the flow. And the most important part is that one should manage that ratio in an ideal manner if the debts of the company are constantly rising against its earnings and most of the part of earning are indulge in paying its debt then one should stay away from that kind of companies.

Availability of Cash

A most important point to check out what a company is doing with its profit, which means are they reinvesting it back into the business which makes a company rich in assets & low in the cash balance, low cash balance shows the business is not sustainable. A company requires a healthy amount of cash balance in its bank if in case anything uncertain happens the company should be in a position to face it.

"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." A statement said by Sir Warren Buffet. An ace investor of the stock market.

Yes, it's very important to follow all the discipline approach when you are planning to do investment in equities, which actually helps you to create a proper portfolio.

But what a trader can do, Yes a trader a person who may trade daily on Intraday, reading charts understanding market trends, constantly watching new and many other things he does, before taking any trade.

Being a trader is only just to do buying & selling of shares an individual should understand the reason behind it. The market actually runs on two trends, i.e. Bullish & Bearish so while doing day trading one should under some basic stock market trading strategies which will help them to perform well in the market.

Some Basic Trading Strategies are:-

Short Selling

It is the technique used by the trader when the market is in a bearish trend, here traders first sell the stocks which are not owned by them in anticipation of a fall in price. Buying the stock on the same day is mandatory else it will lead to an auction market with some penalty.

Arbitrage

Here Trading done by the trader is like buying a product in one exchange or segment & selling the same product in another exchange or segment to generate riskless profit considering the cost of the transaction.

Jobbing

A trading strategy used by the where he buys or sells stock at a minor difference & make money due to the high volume.

Swing Trades

Many traders use this strategy where they enter into the stock with a very short period of a few days or for a few weeks.

Momentum Trading

In this, a trader buys the stock when they have an ongoing momentum, and close the position once the momentum ends.

These are a few basic strategies a trader or any novice can use just to make his/her trading more efficient & effective.

After reaching new heights, the stock market appears to be high now. As NIFTY continues to maintain a large pace and maintain a large profit, experienced investors recommended going for an approach that provides more profits at the current level than chasing the rally as long as the index is below the 12,960 to 13000 zone.

Here, we have picked some of the greatest collections of stocks that can generate solid returns in a long run.

1. SBI Cards

The stock made a double bottom formation in the daily chart by taking the support of ₹770. Many investors might experience fresh upward moves in the upcoming days. Also, an RSI indicator shows great strength. As the whole chart seems to be good, the analyst suggested investors and traders buy and accumulate this stock for a target of ₹900 while they also advised maintaining a stop loss at ₹740.

2. Bata India

Bata experienced a large breaking out of the range ₹1465, on the back of the above volumes. Also, the technical indicators are showing positive signals as the trade above the 20-day and 50-day SMA. Analysts also said that the RSI indicator of Bata India is in rising mode and cannot be overbought. As the technical indicator seems to be looking positive on the monthly, weekly chart, experts said that the stocks of Bata India move higher in the upcoming weeks.

3. Bharti Airtel

Bharti Airtel found the support of nearly ₹394 level in Oct 2020. Such types of levels were previously seen in March 2020 and needless to say, traders say it is a strong support point. The stock then reached a new height and made a new higher top. A 14 days RSI indicator also gives positive signals as they are in rising mode and cannot be overbought. Also, the technical setup of the stocks looks good which makes experts give a positive recommendation about Bharti Airtel.

Trade analyst suggests purchasing a stock between ₹478-485 for a target price of ₹515. However, they also advised planning a stop loss at ₹470.

4. Endurance Technologies

The stock experienced a strong upward trend after testing 100-day simple moving average (SMA). As the stocks are able to manage its sustainability above ₹1021 level, the trajectory shall remain in an upward direction. Therefore the experts suggest to buy stocks now and book a target price of ₹1,170. Stop loss is suggested at ₹1,020.

5. HDFC Life

HDFC has marked a great uptrend in The November month as the stock has raised from the levels of ₹585 to ₹676. It has also been noticed that the stock has been sustained above the key levels which were under the stiff resistance for the last two years. Therefore, HDFC has experienced a classic bullish pattern breakout. Also, the counter fits into all the technical parameters and hence the analyst marks a strong outperformance in this counter.

Needless to say, experts recommend buying this stock for a target of ₹750 over the next 14 sessions. However, the stop loss is recommended by them at ₹635.

6. Dixon Technologies Ltd

Dixon Technologies shares experience remarkable growth as the shares of the company hit a fresh week high of Rs 12,538.7 on the BSE against a point of 275 in the rally of S&P BSE Sensex. Atul Lall, MD and vice-chairman of Dixon technologies have a strong expectation from the new year 2021. According to him, the stock of the company will have a Capex of Rs 125-150 crore in 2021.

Mutual funds are often considered the safest instruments to invest in, you only need to know how to pick the funds that will provide you with greater returns. Beginners often ignore the riskiness or ratings of a fund. They only look for returns which makes them make wrong decisions.

There are many performance indicators that will assist you to make the right decisions regarding mutual fund analysis.

1. Mutual Fund Analysis Against a Benchmark

It is ideal to compare the performance of a fund against a benchmark. The benchmark would be appropriate and fair. However, the wrong benchmark will give misleading data. Hence, it is suggested to compare its performance with a large indicator such as Nifty 50.

2. Fund Historical Performance

Investors predict the real worth of a mutual fund during unpredictable market trends and stock market’s volatility. Also, it is suggested to check the history of a stock such as its past performance with a longer fund history of 5 to 10 years. For instance, a fund provides great returns consistently when the market is working well.

However, during the stock market crash, if your stock lost 8% returns while the benchmark lost 10% returns, then your fund’s performance is considered as good.

3. Expense Ratio

Management expense ratio is the annual maintenance fee charged by the fund for managing your investment. According to SEBI’s guidelines, the fund houses can charge only up to 2.5% of the fund’s average asset (AUM). Therefore, it is advisable to check the expense ratio of mutual funds before investing in any fund. Expense ratios are charged out of the fund returns. Hence, higher the returns, lower will be your home returns.

Always go for a fund that offers similar returns at a low expense ratio. The same mutual fund is available for the direct plan and regular plan. Direct mutual fund plans generally offer low expense ratios which in turn generate higher returns. Investing in direct plans can save your commission.

4. Risk-Adjusted Returns

Instead of preferring annualized returns, go for risk-adjusted returns of the fund. According to a risk-return tradeoff, a high degree of risk should be compensated by higher returns. Sharpe ratio will help you to ascertain whether the fund is giving high returns or not. Higher the Sharpe ratio, higher will be the returns for the extra risk taken.

Let us assume two equity funds A and B having a standard deviation, i.e 12% and 15% respectively. For instance, the Sharpe ratio of fund A and fund B is 0.48% and 0.60%, then it is advisable to choose fund B because it's better to bet to risk taken.

5. Average Maturity and Duration

Average maturity and duration are used to evaluate debt funds as the longer the maturity, higher its sensitivity to interest rate movements and higher are the chances of a fall in the fund of NAV.

Duration plays a crucial role in the debt fund to reach a break-even point; i.e no profit and no loss. The shorter the duration, higher will it return to the original investment.

6. Portfolio Turnover Ratio

The portfolio turnover ratio is a measure of how often the securities are bought and sold by a fund manager in a portfolio. The turnover rate is crucial for potential investors as it helps them to consider the expense rate.

Takeaway

Selection of the best mutual funds for investment seems to be quite difficult for beginners. However, for an active investor, it becomes easy to select a mutual fund according to the above parameters. We will assist you hereby handpicking the best performing investment portfolio for you based on your financial goals.