Greed is Good. Greed is Back!

Jun 24, 2020

Vijay Bhambwani, Editor, Fast Profits Daily

This video is about a topic that really, really interested me. In fact, it kind of made me sit up in my chair.

I'm talking about the positive developments in Glenmark Pharma and Cipla, announcing the manufacture of some Covid-19 treatment drugs in India.

The fact that India finally has some semblance of a cure or some semblance of relief for the treatment of Covid-19 was definitely going to excite the market. There was going to be a relief rally.

But what I'm about to tell you in this video, goes beyond the obvious and immediate a relief rally or a bear covering rally that was expected in the market.

Let's go under the skin of what really happened to the stock prices of Glenmark, Cipla, and other Indian drug companies.

Let me know what you think about this video. I love to hear from you.

Hi, this is Vijay Bhambwani and I am recording this video from my residence about a topic that really, really interested me and it kind of made me sit up in my chair and notice what happened.

I am talking about the positive development of Glenmark Pharma, Hetero Pharma and Cipla, announcing the manufacture of some Covid treatment drugs in India. Glenmark Pharma announced the manufacture of Favipiravir and Cipla and Hetero announced the manufacture of Remdesivir.

Now these are drugs which have excited the medical fraternity the world over as plausible cures and relief from Covid-19 in patients of varying degrees of seriousness in the disease. The fact that India finally has some semblance of a cure or some semblance of relief for the treatment of Covid-19 was definitely going to excite the market. There was going to be a relief rally.

But what I'm about to tell you goes beyond the obvious goes beyond the immediate a relief rally or a bear covering rally that was expected in the market. Let's go under the skin of what really happened to the stock prices of Glenmark, Cipla, and other drug companies.

Learn: How to Potentially Accumulate Rs 7 Crore in Wealth Over the Long-term

Of course, Glenmark pharma flared up by over 30% intraday, settled a little lower. Cipla also shot through the roof and kind of cooled down a little bit as intra day traders booked profits towards the end. These are all expected signs but if you go beyond the obvious, you will see that there was a whole lot of greed based buying on these counters.

Volumes went up the kind of other metrics that people watch, you know, the last traded price versus the average traded price throughout the day, whether the price is staying above it's moving average etc, on all counts, these stocks satisfied the criteria for bullishness for day traders.

Now, what is the primary indication of a bear market? A bear market is one where no kind of good news, no matter how big and how relevant it is to the market, actually excites the market at all. So the market is so sluggish that no matter what you throw at it by way of good news, it simply refuses to acknowledge that good news and either stays stagnant or even goes down lower.

The fact that this data point of these Indian pharma companies manufacturing somewhat workable solutions to for the treatment of Covid-19 flared up the way they did on an intraday basis, tells me that the bull in India and average Indian trader is still alive and kicking.

The fact that there was greed on the stocks of Glenmark Pharma, Cipla, and other pharmaceutical companies on Monday, the 22nd of June 2020, kind of gave me idle comfort, a great deal of comfort as a matter of fact, that the bull in India was alive and kicking. There was no sense of despondency. There was no sense of capitulation. There was no sense of having surrendered to the market forces.

As Gordon Gekko or Michael Douglas in the iconic movie Wall Street, the 1987 version of Wall Street, used to constantly say, greed is good. What are capital markets but about greed? A trader on an average wants to make the most amount of money in the shortest possible time and, if possible, with controlled amount of risk. It's all about money, honey.

And on Monday, the market action on these pharma companies told me that the average Indian trader's nose for money hadn't dried up. It was alive and kicking and therefore given some kind of good news an average Indian trader is willing to fish deep into his pockets, fish deep into his savings, bring up the money and buy stocks all over again. All you need to do is give them good enough, strong enough bankable data points, and they should come out in large enough numbers to be able to provide follow up buying.

I am hopeful that given sustained good news that can come about but I'm keeping my fingers crossed and on that optimistic note, I bid farewell to you in this video till we meet again in my next. Do not forget to click like on this video if you're watching this on YouTube. In the comments section, do let me know what you think about this video and what you would want me to record in my next videos.

Also, please don't forget to refer my videos to your family and friends and help me reach out to them and convert them to the cult of knowledge based investments and trading with a 360 degree view of the financial markets.

Hey, I'm still waiting for you to join Equitymaster's Telegram channel with the handle Equitymaster Official. I put up a couple of post there every evening and I would love you to read them everyday. See you there.

Till then please do take very good care of yourself, your health, your family, your trades, and your investments. Vijay Bhambwani signing off for now.

Thank you for watching my video.

Stay safe!

Warm regards,

Vijay L Bhambwani
Vijay L Bhambwani
Editor, Fast Profits Daily
Equitymaster Agora Research Private Limited (Research Analyst)

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3 Responses to "Greed is Good. Greed is Back!"

PREMKUMAR R

Jun 25, 2020

Hope you are right. You seemed excited anyway. A bear market serves no investor other than providing openings for entry at lower levels.

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Vinayak

Jun 24, 2020

What was the message really being conveyed here?

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jayadevan. k

Jun 24, 2020

An interesting article. Seems bull market is not too far away

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