Thursday, February 26, 2009

Indian Stock Market Review 26-02-09

Amid mixed global cues, the market opened on a weak note and had a prolonged spell in the negative terrain today.

Hectic short-covering due to expiry of February series derivative contracts lifted the market into the positive zone during the final hour.  The Sensex, which tumbled to a low of 8788.32 in morning trade, ended the day at 8962.22 (provisional) with a gain of 59.66 points or 0.67%. The Sensex rose to a high of 8998.31 during the fag end of the session.  The Nifty closed at 2789.55, up 0.98% or 27.05 points.

Auto, oil, FMCG and IT stocks rallied sharply in afternoon trade.  Stock specific action was seen in metal, power, pharma and capital goods sectors. Bank stocks remained weak. Realty stocks bounced back after a weak spell.   Midcap and smallcap stocks found support hard to come by.

Tata Motors shot up by nearly 8%.

Grasim, Maruti, ONGC, RComm, NTPC, Sterlite and RIL closed with impressive gains.

Infosys, BHEL, HUL, Bharti and ITC also finished on a positive note.

Unitech, Hero Honda, GAIL, Tata Comm, Cairn India and SAIL moved up sharply.

Ranbaxy plunged by over 18%.

PNB, Reliance Capital, BPCL, Ambuja Cements, Siemens, RPower and RPL ended with sharp losses.

The market breadth was negative right through the day.

ABB (Rs 371) is likely to give good returns over a medium or long term. Investors holding the stock can stay invested. The company's order book is quite healthy. Small quantities can be added at sharp declines from current levels.

Dabur India (Rs 91) can be retained with a stop loss at Rs 75. The stock has more support at Rs 60 - 65 levels.  But for a sharp upmove to happen, the stock has to move on to Rs 110 and trade firm for a few sessions.

Piramal Healthcare Ltd has clarified that the Promoter has no intention to dilute current ownership levels. The Company continues to maintain its policy on not commenting on market speculation.  The clarification from the company is with reference to a news item appearing in leading financial daily about a stake sale.

Marico (Rs 56) can be picked for medium term. One can take a modest exposure now and increase holding at declines.   stop loss can be placed at Rs 46. Returns from Hindustan Unilever (Rs 250) may not be significant in the short run. However, the downside risk for the stock is somewhat limited from here. One looking at long term can pick up this stock at declines.

Jaiprakash Associates (Rs 67) may struggle to make a sharp upmove in the near term. One looking at a 12 - 15 month span can go in for the stock at Rs 60 - 63 levels. Those holding the stock can continue to do so with a stop loss near Rs 47.

Bank stocks are trading weak today.  However, investors holding key bank stocks with a long term plan can continue to hold them.  Exposure can be increased in a staggered way in SBI, Bank of Baroda, Bank of India, Federal Bank, Indian Bank, PNB and Union Bank of India.

Infosys Technologies (Rs 1233) can move on to Rs 1265 - 1275 shortly.  Traders with a good appetite for risk can try this IT stock now with a stop loss at Rs 1218.

Reliance Communications (Rs 157) can rise to Rs 163 this afternoon.  Intra-day traders can buy this stock now with a stop loss at Rs 153.  Those looking at medium to long term can stay invested with a stop loss at Rs 145.

Investors looking for some strong gains over a short run, can go in for Maruti Suzuki. The stock (Rs 672) is near a strong resistance level now. A move to Rs 730 looks very likely in the near term.

Reliance Industries (Rs 1271) can be bought at sharp declines.  Long term investors can hold the stock with a stop loss near Rs 1100.

Cipla (Rs 188) can give modest returns over a 3 - 6 month period.  One can buy the stock now or at slight declines.
Long term investors can have a stop loss near Rs 145.

Reliance Communications (Rs 156) can rise to Rs 160 - 162 where it can face some resistance.  A fall to Rs 153 and a pronounced weakness there can result in the stock sliding down to Rs 148 this afternoon.

Ultratech Cement (Rs 449) can be retained for long term.  However, fresh buying can be considered at sharp declines from current levels. Long term players can have a stop loss near Rs 320.

HDFC (Rs 1205) has hit a new 52-week low of Rs 1193.30 today.  The stock is likely to drift lower in the near term.
Still, long term investors can continue to hold the stock and pick up more of it in small quantities at declines.

One can stay invested in Balrampur Chini (Rs 48.50).  The stock can give moderate to sharp returns over a short to medium run. For now, a stop loss can be placed at Rs 35 - 37 levels.

Crompton Greaves (Rs 125) can be retained for long term.  In the short run, the stock can exhibit weakness and can drift down to Rs 110 levels. Long term investors can increase exposure at those levels.

Tata Steel (Rs 160.70) can move up sharply if it makes a decisive breakout at Rs 163.  The stock has support at Rs 158 and weakness there can result in a fall to Rs 153 or even Rs 150.

Infosys Technologies (Rs 1217) will have to rise to Rs 1225 and trade firm to give a strong buy signal for intra-day.  The stock has support at Rs 1205 and a pronounced weakness there can result in a fall to 1190 or even lower.

Tata Consultancy Services has announced that Singapore Airlines has extended its contract with the company.  As per the extension, TCS will provide IT services for three years for a suite of applications used by Singapore Airlines Group of Companies.

Educomp Solutions (Rs 1507) is not for investors with little or no appetite for risk.  Short term traders can look to sell the stock at Rs 1580 - 1600 and buy back later at Rs 1450 or slightly lower.

Nifty (2737) has some support at 2730.  Weakness around that level can result in a fall to 2710 or even lower levels.  A strong breakout at 2755 can lift the index back into the positive territory.

NTPC (Rs 180) is likely to face some strong resistance at Rs 190 levels.  In the short run, the stock can weaken to Rs 165 or even lower.  Long term investors can hold the stock and pick up more of it at sharp declines from current levels.

Punj Lloyd (Rs 82) can give fairly solid returns over a long run.  The stock can move on to Rs 90 where short term traders can make an exit. They can re-enter the counter later at declines.

SAIL (Rs 74.65) can be picked up at declines. The stock is likely to face strong resistance at Rs 90 - 95 level where one can make an exit.

Investors with a short or medium term view can hold M&M (cmp Rs 319) with a stop loss at Rs 270.  The stock will have to move on to Rs 390 and trade firm for a few sessions to give a strong buy signal.

Maruti Suzuki (Rs 649) can move up sharply in the near run.  The stock can find some resistant at Rs 675 - 685 levels where one can look at booking some profits.

GMR Infrastructure (Rs 75) can be accumulated in a staggered way.  Investors with a long term plan can have a stop loss near Rs 45, around its 52-week low.

Ranbaxy Laboratories (Rs 180) is likely to remain quite slippery in the near run.

Investors who have no appetite for risk would do well to stay away from the counter for now.

Stay invested in Tata Motors (Rs 142).  The stock may see a few weak spells in the near run and can even drop down to Rs 130. Dips can be used to add quantities.

Ambuja Cements (Rs 68) looks good as a medium to long term bet. Though a fall from current levels is not ruled out, one who can afford to hold the stock need not worry and instead, increase exposure at sharp declines.

L&T has bagged new orders worth Rs 1162 crore in Buildings & Factories Segment.  The orders are from the Andhra Pradesh Rajiv Swagruha Corporation, KCP Limited and Lafarge India Private Limited.  One with a long term plan can continue to hold L&T (Rs 623) and look to buy more at declines.

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