ADVANCE TAX AND EXPECTED MARKET AND YOUR PLAN OF ACTION

Advance tax data is out. It reflects this time that advance tax collection is more than 20%. Mumbai accounts for almost 40% of the country's total tax collection Higher advance tax payment means that profits may be higher in Q2 September 2009 over Q2 September 2008 and vice versa. The growth have come from all sectors giving more support from banking, oil and gas and auto sectors. We also find from the details till now declared that this time advance tax is more as compared to September 2008.


This will have a tremendous positive effect on the stock market that will push the sensex to 18000 levels and nifty above 5200 levels. Giving a big gift before Diwali. But the before we draw some more positive cues the biggest factor to watch out in the coming days is that the stock valuation of the major large cap companies along with midcap companies are too much valued and this is making the investors skeptical regarding doing investment and purchasing these shares at these prices. We need to check the valuation of the shares. We should not get biased with the upward euphoria that will be created can make the picture ugly in coming days.

If a small correction will reduce the values and will give ample space to the investors to do investment with some comfort. Now many of my friends will say that equity market investment is game of risk. I agree to them but jumping on from the top floor of a building doesn’t seems to be a wise ball game.

I will ask my investors to be cautious and choose only large cap stocks. Since even if they market goes down due to any reason then afterward the bounce back will begin only in the large cap at first.

They market will now remain very sensitive to any news coming from other economies. Any negative news will make the panic button pressed and investors will run away. I will ask to Avoid this type of mistakes if it happens this time.
One more thing I will like to accentuate that this advance tax figure will have a huge positive effect on the market but please keep in mind don’t get carried away with filthy stocks. Invest in large cap along with use the Advance Tax Data to choose the potential scripts/stocks and invest in them. The companies who have paid huge tax will not necessarily mean huge profit. But large cap stocks will good potential should the EYE of THE BIRD.
Lets see what kind of diwali gift we get before diwali.We might soon get 5200+ nifty levels.