Market Outlook- Tough times ahead

With the monsoon playing hide-and-seek with us, the problems are only going to aggravate and this might prove to be a red signal to the recent rally which the market witnessed. The monsoon problem appears to be more severe than we had anticipated.The govt. may now have to come up with relief packages to support the struggling farmers who are highly dependent on monsoons for agriculture.The problem of food security might crop up due to poor monsoons and the govt. might have to build up huge reserves.

But poor monsoon is not only responsible for huge selling pressure which the sensex witnessed in the last two days.The market had run up sharply in the last few days so a correction was definitely on the cards.

But still 'intelligent investors' can make the most of this volatile market by taking some calculated risks.One commodity which has shown a continuous uptrend for the past couple of months is sugar . The prices are continuously rising and the poor monsoon may drive the prices of this commodity northwards. The prices have nearly doubled since the last few months. This may create a big hole in our pocket by increasing the household budget and but for sugar companies its a much-awaited 'business' time. So taking positions in sugar stocks like Balrampur Chini and Triveni Engineering will help us to capitalize the price rise in this commodity. And weak monsoon forecasts will only boost the profits of these companies. The target for Balrampur Chini is Rs.150 and for Triveni Engineering it is Rs.130. So it makes a good business sense to ride the upward trend the of these stocks and thereby pocketing handsome profit on the way.

Due to high volatility of these stocks, a cautious approach is needed while entering in these stocks.

"Happy Investing."