Tuesday, April 05, 2011
Market outlook
Market Mantra
Market outlook
Stay focused…cooling likely later
The ability to focus attention on important things is a defining characteristic of intelligence. - Robert J. Shiller
There is no stopping the Indian juggernaut these days with the steady flow of FII money keeping the interest alive in the market. Another quarter more or less in line with expectations for India Inc. is something many are anticipating. Stay focused as we do have a few macroeconomic headwinds in the form of high inflation and rising cost of capital. Right now it’s all about momentum, which is driving the stocks up.
Growing global risk appetite in the face of adverse news flow from the MENA region, eurozone and Japan has been another source of support lately. We therefore expect the current rally to stretch a bit longer. Stay alert for global developments as they could change the direction anytime. Keep an eye on crude oil price swings.
Today’s start is likely to be slightly positive but given the indecisive cues from the global markets the early gains may not sustain for long. The key indices could turn choppy later in the day. Action may continue in the non-index counters but beware of stocks with dubious track record. On the Nifty, 5860 might act as a strong support today.
Trading ideas (Time period: 1-3 days)
Sterlite (BUY, between Rs170-171, Target Rs181): Sterlite on the daily chart has given breakout from ‘rounding saucer’ pattern above Rs170 and hence forth as long the stock holds above the support levels of Rs170, there is high probability of stock testing levels of Rs187 in the near term. Analysing the volume trend on the day to day basis suggest that volumes have been expanding during the upmoves and contracting during the downtick which suggest accumulation phase at lower levels. The daily RSI too has been holding the support of 50 mark which exhibits strength and could move into an overbought position of 65 in the near term. We advise buying stock in the range of Rs170-171 with stop loss of Rs166 for Target of Rs181. (Duration 5 days)
Bank of India (BUY, above Rs489, Target Rs505): Last week Bank of India crossed critical hurdle of Rs470-472 and has been able to sustain above same for third consecutive trading session. Daily chart shows that the stock has broken out from Ascending triangle and manage to close above in positive terrain for third trading day. RSI on the weekly chart has also given positive crossover after moving in a rounding bottom pattern. Based on above mentioned technical parameters, we recommend traders to buy the stock above Rs489 with stop loss of Rs483 for target of Rs505.
Derivative strategies (Time period: Till expiry)
Strategies
± Long Crompton Greaves April Future in range of Rs279 – 281 for the target price of Rs289 with a Stop loss placed at Rs276.
Lot size: 1000
Remarks: Net maximum profit of Rs10,000 and net maximum loss of Rs5,000.
± Long GE Shipping April Future in range of Rs277-279 for the target price of Rs287 and stop loss placed at Rs274.
Lot size: 1000
Remarks: Net maximum profit of Rs10,000 and net maximum loss of Rs5,000.
Mutual funds
Fund focus
HDFC Top 200 Fund
Invest
Fund manager
Prashant Jain
Min investment
Rs5,000
Latest NAV
Rs214.8
Entry load
Nil
NAV 52 high/low
Rs236/176
Exit load
1% before 1 year
Latest AUM
Rs9,489cr
Benchmark
BSE 200
Class
Equity – diversified
Asset allocation
Equity (93%), Cash (7%)
Options
Growth & dividend
Expense ratio
1.79%
Corporate Snippets
± Suzlon Energy is all set to acquire the residual stake in German company REpower, to get 100% control of the company. (BS)
± Petroleum secretary said that Cairn Energy Plc will need to take the consent of partner ONGC before selling majority stake in its Indian unit to Vedanta. (BS)
± United Spirits has acquired 41.5% stake in Karnataka-based Sovereign Distilleries Ltd. (FE)
± BPCL plans to build an LNG import facility and pipeline infrastructure in India to transport gas from a Mozambique block in which it holds stake with Videocon Industries. (ET)
± Bajaj Auto clocked a 12% yoy jump in sales in March this year to 3,07738 units. (ET)
± The revival in sales of the Nano in the last four months has encouraged Tata Motors to double production plans for the small car by up to 20,000 units a month this fiscal. (BL)
± Marico will focus on four key brands Saffola edible oil, Parachute hair oil, Nihar and Hair & Care. (ET)
± GAIL India plans to foray into power sector through a tie-up with the NTPC Ltd. (ET)
± The price of the Indian basket of crude averaged US$85.09/barrel in 2010-11, up 22% from the US$69.8/barrel in 2009-10, resulting into an estimated gross loss of Rs780bn for the public sector OMCs — Indian Oil, Bharat Petroleum and Hindustan Petroleum in FY11. (BS)
± After months of intense negotiations and competitive bidding, Hyderabad-based GVK group has been shortlisted to acquire Hancock Coal. (BS)
± Reliance Infrastructure (R-Infra) plans to continue with its proposed 7.2km sea link between Worli and Haji Ali in Mumbai, even as the Maharashtra government plans to explore a coastal road instead, as it would be much cheaper. (BS)
± Tecpro Systems has bagged an order worth Rs2.6bn from NTPC for the supply and installation of coal handling plant in Jharkhand. (ET)
± The Supreme Court has directed Glaxo India to pay Rs712mn to the state in a 20-year-old dispute over pricing of the drugs scheduled under the Drug Price Control Order. (ET)
± Dabur and Emami have opted out of the race to acquire controlling stake in the Indian subsidiary of German household goods maker Henkel. (ET)
± Nalco has achieved the highest-ever cast metal production of 4,43,597 tons for 2010-11 against the previous best of 4,31,488 tons in 2009-10. (BL)
± Maruti Suzuki India expects its sales growth to moderate to ~15% in FY12 from nearly 25~ in FY11. (BS)
± Uflex plans to invest Rs3.8bn in setting up a polyester films plant in the US with an annual capacity of 30,000metric tones. (ET)
± Fortis Malar Hospitals has taken over operations and management of cardiac centre at 170-bed Oasis Hospitals in Sri Lanka. (ET)
± Aditya Birla group firm Idea Cellular is believed to be in talks with global telecom operators to sell its stake in the company. (ET)
± Temasek Holdings is in talks to buy a part of US private equity firm TPG Capital's holding in Shriram Transport Finance in a deal valued at Rs25bn. (ET)
± Suzlon Energy plans to raise Rs50bn via FCCB route due in 2016 and to be listed on Singapore Exchange Securities Trading. (ET)
± Mundra Port and SEZ, handled 50mn tons of cargo in 2010-11, making it the seventh largest port in terms of annual cargo handling volume in the country. (ET)
± BHEL reported 40% jump in its profit-after-tax at Rs60bn for the fiscal year ended March 31, 2011. (ET)
Economy snippets
± The Union coal ministry has issued a draft of the guidelines being framed for putting in place a competitive bidding regime for allocating coal blocks in the country. (BS)
± Foreign investment in India rose by $22.7bn in the quarter ending December 2010 to US$628bn, mainly on account of increase in portfolio investment and FDI. (FE)
± The government will set up two high-level bodies to frame policies for promotion of hybrid and electric vehicles in the country, which depends largely on imports for its automobile fuel. (ET)
± The government may miss its annual tax collection target for 2010-11 because of an all-time high outgo of income tax refunds. (ET)
± Ministry of corporate affairs will ask finance ministry's to review its proposal to impose a hefty alternate minimum tax on limited liability partnerships, a hybrid business form combining the features of company and a partnership form of operation. (ET)
± The finance ministry has sought strict norms for non-banking finance companies, or NBFCs, that want to convert into banks or promote banks. (ET)
Market outlook
Stay focused…cooling likely later
The ability to focus attention on important things is a defining characteristic of intelligence. - Robert J. Shiller
There is no stopping the Indian juggernaut these days with the steady flow of FII money keeping the interest alive in the market. Another quarter more or less in line with expectations for India Inc. is something many are anticipating. Stay focused as we do have a few macroeconomic headwinds in the form of high inflation and rising cost of capital. Right now it’s all about momentum, which is driving the stocks up.
Growing global risk appetite in the face of adverse news flow from the MENA region, eurozone and Japan has been another source of support lately. We therefore expect the current rally to stretch a bit longer. Stay alert for global developments as they could change the direction anytime. Keep an eye on crude oil price swings.
Today’s start is likely to be slightly positive but given the indecisive cues from the global markets the early gains may not sustain for long. The key indices could turn choppy later in the day. Action may continue in the non-index counters but beware of stocks with dubious track record. On the Nifty, 5860 might act as a strong support today.
Trading ideas (Time period: 1-3 days)
Sterlite (BUY, between Rs170-171, Target Rs181): Sterlite on the daily chart has given breakout from ‘rounding saucer’ pattern above Rs170 and hence forth as long the stock holds above the support levels of Rs170, there is high probability of stock testing levels of Rs187 in the near term. Analysing the volume trend on the day to day basis suggest that volumes have been expanding during the upmoves and contracting during the downtick which suggest accumulation phase at lower levels. The daily RSI too has been holding the support of 50 mark which exhibits strength and could move into an overbought position of 65 in the near term. We advise buying stock in the range of Rs170-171 with stop loss of Rs166 for Target of Rs181. (Duration 5 days)
Bank of India (BUY, above Rs489, Target Rs505): Last week Bank of India crossed critical hurdle of Rs470-472 and has been able to sustain above same for third consecutive trading session. Daily chart shows that the stock has broken out from Ascending triangle and manage to close above in positive terrain for third trading day. RSI on the weekly chart has also given positive crossover after moving in a rounding bottom pattern. Based on above mentioned technical parameters, we recommend traders to buy the stock above Rs489 with stop loss of Rs483 for target of Rs505.
Derivative strategies (Time period: Till expiry)
Strategies
± Long Crompton Greaves April Future in range of Rs279 – 281 for the target price of Rs289 with a Stop loss placed at Rs276.
Lot size: 1000
Remarks: Net maximum profit of Rs10,000 and net maximum loss of Rs5,000.
± Long GE Shipping April Future in range of Rs277-279 for the target price of Rs287 and stop loss placed at Rs274.
Lot size: 1000
Remarks: Net maximum profit of Rs10,000 and net maximum loss of Rs5,000.
Mutual funds
Fund focus
HDFC Top 200 Fund
Invest
Fund manager
Prashant Jain
Min investment
Rs5,000
Latest NAV
Rs214.8
Entry load
Nil
NAV 52 high/low
Rs236/176
Exit load
1% before 1 year
Latest AUM
Rs9,489cr
Benchmark
BSE 200
Class
Equity – diversified
Asset allocation
Equity (93%), Cash (7%)
Options
Growth & dividend
Expense ratio
1.79%
Corporate Snippets
± Suzlon Energy is all set to acquire the residual stake in German company REpower, to get 100% control of the company. (BS)
± Petroleum secretary said that Cairn Energy Plc will need to take the consent of partner ONGC before selling majority stake in its Indian unit to Vedanta. (BS)
± United Spirits has acquired 41.5% stake in Karnataka-based Sovereign Distilleries Ltd. (FE)
± BPCL plans to build an LNG import facility and pipeline infrastructure in India to transport gas from a Mozambique block in which it holds stake with Videocon Industries. (ET)
± Bajaj Auto clocked a 12% yoy jump in sales in March this year to 3,07738 units. (ET)
± The revival in sales of the Nano in the last four months has encouraged Tata Motors to double production plans for the small car by up to 20,000 units a month this fiscal. (BL)
± Marico will focus on four key brands Saffola edible oil, Parachute hair oil, Nihar and Hair & Care. (ET)
± GAIL India plans to foray into power sector through a tie-up with the NTPC Ltd. (ET)
± The price of the Indian basket of crude averaged US$85.09/barrel in 2010-11, up 22% from the US$69.8/barrel in 2009-10, resulting into an estimated gross loss of Rs780bn for the public sector OMCs — Indian Oil, Bharat Petroleum and Hindustan Petroleum in FY11. (BS)
± After months of intense negotiations and competitive bidding, Hyderabad-based GVK group has been shortlisted to acquire Hancock Coal. (BS)
± Reliance Infrastructure (R-Infra) plans to continue with its proposed 7.2km sea link between Worli and Haji Ali in Mumbai, even as the Maharashtra government plans to explore a coastal road instead, as it would be much cheaper. (BS)
± Tecpro Systems has bagged an order worth Rs2.6bn from NTPC for the supply and installation of coal handling plant in Jharkhand. (ET)
± The Supreme Court has directed Glaxo India to pay Rs712mn to the state in a 20-year-old dispute over pricing of the drugs scheduled under the Drug Price Control Order. (ET)
± Dabur and Emami have opted out of the race to acquire controlling stake in the Indian subsidiary of German household goods maker Henkel. (ET)
± Nalco has achieved the highest-ever cast metal production of 4,43,597 tons for 2010-11 against the previous best of 4,31,488 tons in 2009-10. (BL)
± Maruti Suzuki India expects its sales growth to moderate to ~15% in FY12 from nearly 25~ in FY11. (BS)
± Uflex plans to invest Rs3.8bn in setting up a polyester films plant in the US with an annual capacity of 30,000metric tones. (ET)
± Fortis Malar Hospitals has taken over operations and management of cardiac centre at 170-bed Oasis Hospitals in Sri Lanka. (ET)
± Aditya Birla group firm Idea Cellular is believed to be in talks with global telecom operators to sell its stake in the company. (ET)
± Temasek Holdings is in talks to buy a part of US private equity firm TPG Capital's holding in Shriram Transport Finance in a deal valued at Rs25bn. (ET)
± Suzlon Energy plans to raise Rs50bn via FCCB route due in 2016 and to be listed on Singapore Exchange Securities Trading. (ET)
± Mundra Port and SEZ, handled 50mn tons of cargo in 2010-11, making it the seventh largest port in terms of annual cargo handling volume in the country. (ET)
± BHEL reported 40% jump in its profit-after-tax at Rs60bn for the fiscal year ended March 31, 2011. (ET)
Economy snippets
± The Union coal ministry has issued a draft of the guidelines being framed for putting in place a competitive bidding regime for allocating coal blocks in the country. (BS)
± Foreign investment in India rose by $22.7bn in the quarter ending December 2010 to US$628bn, mainly on account of increase in portfolio investment and FDI. (FE)
± The government will set up two high-level bodies to frame policies for promotion of hybrid and electric vehicles in the country, which depends largely on imports for its automobile fuel. (ET)
± The government may miss its annual tax collection target for 2010-11 because of an all-time high outgo of income tax refunds. (ET)
± Ministry of corporate affairs will ask finance ministry's to review its proposal to impose a hefty alternate minimum tax on limited liability partnerships, a hybrid business form combining the features of company and a partnership form of operation. (ET)
± The finance ministry has sought strict norms for non-banking finance companies, or NBFCs, that want to convert into banks or promote banks. (ET)
Wednesday, February 09, 2011
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