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Sensex Hits 16,000 the India Street Special Report

Sensex Hits 16,000 the India Street Special Report

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Published by Mark Fidelman
Sensex skyrockets to 16,000
Sensex skyrockets to 16,000

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Published by: Mark Fidelman on Sep 20, 2007
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05/08/2014

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Sensex hits 16,000: The India Street Special Report
By Sundaramurthy VadiveluBombay Stock ExchangeIn mid August, the emerging markets were reeling under sellingpressure and the reason attributed to it wasUS Sub-prime mortgage crisis. Today, the BSE Sensex opened at 15940.79 and within secondsit began to trade above 16,000. The anchors of premier business television channels were full of smileand the Indian and foreign fund managers were of the hope thatSensex and India stock market are poised towards higher growth. Thereason for today’s grand opening was reported to be Federal Reservecut its benchmark lending rate by half a percentage point to bolstergrowth in the world's largest economy.After recording a high of 16335.30, the Sensex finally closed at16322.75, gaining a whopping 653.63 points or about 4.17%Among the Sensex stocks HDFC, HDFC Bank, Bharti Airtel, ONGC,Maruti Udyog and Reliance gained more than 5% while not a singlestock was among the losers.In June, I wasinterviewedby The India Street about Sensex reaching16000 before the end of this year. TheIndiaStreet: Would you be surprised if the India Stock Market Indexwent on to break 16,000 this year?Sundaramurthy: No, certainly not. When 4000 can become 14000,why not another 2000?Indeed, I was
NOT
at all surprised today about Sensex reaching 16000.In fact, in my very firstweekly reviewof Indian stock market I wrote:
 
“However, the weekly chart shows that there is an ascending trianglebreakout with a triangle height of about 690 points. This when addedto 4245 gives a target of 4935”.
Road to 16000:
For those who are interested in statistics about how Sensex hasmanaged to reach 16000 from about 3000 in April 2003, the followingchart shows the milestones and number of trading sessions utilized foreach milestone.
Sensex 16000 break up
      3      0      8      9  .      6      4      0      2      6  .      2      7      5      0      6      8  .      6      6      6      0      3      4  .      3      8      7      0      0      1  .      5      5      8      0      6      0  .      2      6      9      0      0      5  .      6      3      1      0      0      0      2  .      8      3      1      1      0      1      7  .      2      5      1      2      0      5      3  .      7      4      1      3      0      3      9  .      3      1      4      0      2      8  .      4      7      1      5      0      0      7  .      2      2      1      6      3      3      5  .      3
09653413675553482919132261445202000400060008000100001200014000160001800004/03 08/03 11/03 01/04 06/05 09/05 11/05 02/06 03/06 04/06 10/06 12/06 07/07 09/07Date
      S     e     n     s     e     x
050100150200250300350400Sensex Trading Sessions
 The Sensex took 367 sessions to reach 7000 from 6000. This is thelongest duration it has taken to gain 1000 points. This is followed by144 (14000 – 15000) and 132 (12000 – 13000). The least number of sessions of course was 19 (11000 – 12000).One important point to note here is that as the Sensex reaches themilestone faster, the next milestone is slowed up. Compare the 96, 53,41 sessions; next milestone took 367 sessions. 48, 29 and 19; nextmilestone took 132 sessions. 26; next milestone took 144 sessions. The current 52 sessions look probably reasonable, so we may think of 17000 in near future.
 
Most of today’s top gainers were sugar stocks – many of which havefallen badly in the last 18 months. The media reported that the sugarstocks witnessed heavy buying as the Government announced thatsugar mills might be allowed to produce ethanol directly and will beable to sell it at Rs. 21.50 per litre.We shall now analyze the Sensex stocks and how they performedcompared to Sensex between 15000 and 16000.
ScripClose06-JulClose19-Sep%Change
REL597.95 946.10 58.22RELIANCE1,711.452,172.9026.96BHEL1,555.851,927.9023.91HDFC1,916.052,354.1522.86NTPC155.40 189.50 21.94ITC155.50 186.85 20.16GRASIM2,773.153,327.9520.01 TISCO623.15 744.70 19.51BAJAJAUTO2,108.502,512.4019.16MARUTI795.85 925.85 16.33HDFCBANK1,153.351,326.3015.00SBIN1,550.151,770.0014.18RANBAXY361.95 412.90 14.08LT2,364.552,669.7512.91GUJAMBCEM131.25 147.60 12.46ACC1,040.701,153.0010.79

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