Election Strategy I Mkt could move higher I Gamestop and Brightcom

GameStop – All in a week’s time

A 100% rise only to fall back again

• All global markets did very well last week with Indian small and mid-caps roaring back (especially on the infra side)
  

• In the short term, we feel markets are poised for an upmove to all time highs as worries on the election outcome abate (Read on below on how to position your portfolio for the election results)
  

• Gold closes in on $2,500 USD
  

• Inflation numbers are positive in India while ironically bad nos in US are read positive as hopes of rate cuts increase

Brightcom

SEBI suspends it for trading – Too Little and Too late – Investors loose tonnes of money in this evergreen scam

How to position for the upcoming election outcome

The election results are here and we remain very confused as to what needs to be done especially in the context of multiple schools of thought on the outcome

If NDA is voted to power (If BJP and NDA are > 310 and > 350 respectively – by and large)

For short-term investors ( 3-12 months)

Buy below 22k Nifty levels

Buy aggressively below 21,500 levels

Sell partially at > 23500 levels

Sell aggressively at > 24,000 levels

For long term investors

As we mentioned earlier in such a situation barring any really unforeseen debacle like a) Political uncertainty, leadership crises or b) Major escalation in war, the Indian equity markets should witness a great run over the next 2-3 years and hence

Stay Invested at your desired equity levels (Leaving side money for emergency funds, less than 3 year financial goals, one can invest >75% into equities if they can stomach a 20-25% market decline)

If NDA doesn’t come to power or is at lower than 2019 election levels

SELL at any level above 20,500 and then wait for the dust to settle – tilt towards high credit fixed income

We don’t believe that the prospects of NDA getting lesser than 2019 tally is probable and as of now are taking a position according to the positive, especially for aggressive investors.

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