Friday, February 20, 2009

Market Notes 20-02-09

Weak global sentiment and lack of positive triggers kept the market down in the red right through the session today.  The Sensex opened nearly 100 points down at 8943.78 and plunged to a low of 8762.58 in afternoon trade. It ended the day at 8861 (provisional) with a loss of 191.63 points or 2.01%. The Nifty closed at 2747.20, down 42.15 points or 1.51%. The Nifty touched a low of 2709.30 in intra-day trades.  All the sectoral indices ended in the red.

Bank, IT, telecom, metal and oil stocks were among the prominent losers.  Realty, capital goods and power stocks remained subdued today. Not much buying happened in auto and Pharma sectors as well.Select FMCG stocks found support.Midcap and smallcap stocks struggled to make a headway.

ICICI Bank lost around 7%.RComm, M&M, TCS, RIL, Reliance Infra, Sterlite, HDFC, Infosys, L&T, Tata Steel, Grasim and HDFC Bank declined sharply.ACC and Maruti Suzuki bucked the trend.

HCL Tech, Nalco, Tata Comm, PNB, Reliance Capital, Suzlon, RPower and SAIL ended with sharp losses.  ABB bounced back and ended with an impressive gain on strong quarterly results.  The market breadth remained weak. On BSE, losers outscored gainers by 2 to 1.

Tech Mahindra (Rs 268) can give good returns over a medium term.  Long term investors can hold the stock with a loss at Rs 210 - 220 levels.  The stock has resistance at Rs 290 and a breakout there can result in a rise to Rs 335 or even higher.

The market will continue to dance to global tunes as there are no prominent triggers on the home front.  A relief rally is likely if the Apex bank decides to step in and cut repo and reverse repo rates and take measures to infuse liquidity.  Tata Power (Rs 737) will have to move on to Rs 810 - 830 and trade firm for a few sessions to give a strong buy signal.

In the meantime, investors willing to take some risks can try this stock with a stop loss at Rs 690 - 700.  Investors looking for some bets can pick up Marico, Tata Tea, ITC and HUL at current levels or slightly lower.  Returns from these stocks may not be significantly sharp, but these stocks have limited downside from current levels.

Areva has tumbled on weak results.  The stock is down with a loss of 2.5% at Rs 183.50 at present. The stock had moved on to Rs 193 earlier in the day.  The company has posted a net profit of Rs 66.24 crore for the quarter ended 31 December 2008 as compared to a net profit of Rs 83.91 crore for the corresponding quarter last fiscal.

One can stay invested in Alstom Projects (Rs 302) with a stop loss at Rs 260.  If the stock breaches that support, then a fall to Rs 225 looks likely.

United Spirits can be considered for fresh exposure at Rs 450 - 460 levels.The stock, currently traded around Rs 565, can see some sharp correction in the near run.

Wipro (Rs 211) can rise to Rs 223 in the short run.  A rise to Rs 235 - 240 is also not ruled out.  The stock can be retained for with a short or medium term view with a stop loss at Rs 190.

Sun TV Network (Rs 162) has support at Rs 150 - 153.  If the stock displays weakness there, then a fall to Rs 125 or even lower is likely.  A rise to Rs 182 looks possible over a short run.

Fresh buying in Praj Industries (Rs 50) can be considered at declines.  Investors holding the stock can continue to stay invested with a stop loss near Rs 45.

ABB Limited has posted a net profit of Rs 193.12 crore for the quarter ended 31 December 2008. The firm had posted a net profit of Rs 180.79 crore in the corresponding quarter last year.

Investors with a long term view can hold Matrix Laboratories (Rs 84) with a stop loss at Rs 60.
The stock had slipped to a low of Rs 48 late last year. A fall to that level looks a bit unlikely.

HCL Technologies (Rs 103) can give good returns over a medium term.  Investors can continue to hold the stock and look at adding more of it at sharp declines from here.

There are no positive triggers as such for the market at present.  Only short-covering can help lift prices of some front line stocks.  It is advisable to restrict fresh buying to modest levels for now.

Long term investors can hold Tata Tea (Rs 523) with a stop loss at Rs 450 - 460. The stock can rise to Rs 625 -630 where it has some strong resistance. One can sell some portion at those levels and take a call on re-entering later.

IVRCL Infrastructure (Rs 113) can be picked up at sharp declines from current levels. Though a fall to Rs 56.50, its October 2008 low, looks somewhat unlikely, some strong correction in the counter is not ruled out in the near run

PNB (Rs 370) has some support at Rs 350. Weakness there can result in a fall to its next support at Rs 330.  The stock may face resistance at Rs 400 - 405 and a strong breakout there can lift it to Rs 465 or even higher.

ITC (Rs 178) is not likely to see a significant fall from here.  The stock, however, may find it tough to make a sharp upmove as well.  Investors with a short term view can look at booking some profits at rallies and re-enter later at declines.

Dabur India (Rs 91) is a good stock to own.  Though it may remain a bit slippery in the near run, one can stay invested with a stop loss at Rs 60.

ABB (down 4.85% at Rs 374) remains weak ahead of announcement of results.  Irrespective of quarterly numbers, investors with a long term plan can continue to hold the stock.A call on fresh exposure to the counter can be taken later.

Central Bank of India (Rs 35.50) can be retained with a stop loss at Rs 32.  The stock can give decent returns over a medium term.  UCO Bank, Syndicate Bank and Andhra Bank are among the other low priced bank stocks that can be considered for fresh exposure now.

Aurobindo Pharma has received tentative approval from US FDA for Tenofovir Disoproxil Fumarate Tablets.  Shipping Corporation of India: Sell below at...With this, Aurobindo Pharma now has a total of 91 ANDA approvals from US FDA.  Long term investors can continue to hold the stock (cmp Rs 146) with a stop loss near Rs 100.

Automobile stocks Tata Motors and Maruti Suzuki can be picked up for long term.  Though some weak spells are not ruled out in the near run, the long term prospects of these stocks remain fairly bright.  

Gujarat NRE Coke (Rs 21.85) can drift down a bit in the near run.  The stock can rise to Rs 28 and then move on to Rs 35 or even Rs 40 if it manages to sustain momentum. For now a stop loss can be placed at Rs 19.

Idea Cellular (Rs 49) can be retained with a stop loss near Rs 35.  The stock may face stome strong resistance at Rs 53 - 56 levels and strong breakout there can result in a rise to Rs 75.

The market is likely to remain quite volatile for the rest of the month.  With a long weekend ahead and February series derivtives expiry not far away, some short covering is likely in a few blue chip stocks.  Petronet LNG (Rs 35) can be retained with a long term view.  The stock is near a crucial support level. Its next support is near Rs 31.  The stock can rise to Rs 42 over a short run where it is likely to find some strong resistance.

ONGC (Rs 665) can give solid returns over a medium to long run.  One can stay invested in the stock and look at picking up more at sharp declines from here.  The stock has strong support near Rs 540.

One looking at medium or long term can buy Jubilant Organosys (Rs 121) at declines.

Shipping Corporation of India: Sell below at...The stock has support at Rs 102 and a stop loss can be placed near that level.

Investors with a long term view can consider buying Tata Steel (cmp Rs 167) at Rs 150 - 155 levels.  The stock can be retained in the portfolio with a stop loss at Rs 137.

Avantel Ltd has informed BSE that the Company has bagged an order of Rs 6.85 crores from the Ministry of Defence, Government of India, for supply of Satellite communication products to Coast Guard. The thinly traded Avantel stock has surged 2.5% to Rs 30.70 this morning. On BSE, only 650 stocks have chaned hands at the counter so far today.

The market breadth is very weak this morning due fairly widespread selling.  On BSE, 1093 stocks have declined. 439 stocks have posted gains and 65 stocks trade flat.  Among BSE 'A' Group stocks, only 24 have managed to post gains. As many as 180 stocks are down in the red.

Realty stocks have tumbled again. One needs to be extremely cautious with regard to fresh exposure in this sector. Only a sharp jump in demand for new homes can result in any significant rally in this space. Wait and Watch is the best ploy for now.

Sterlite Industries (Rs 247) can slip to Rs 242 or even lower today. One can sell the stock with a stop loss at Rs 250.  Long term investors can continue to hold the stock with a stop loss at Rs 190 or Rs 165.

Jaiprakash Associates (Rs 67) can be bought for long term at 5% - 10% down from current levels.  A stop loss can be placed near 47, its October 2008 low.

ICICI Bank (Rs 348) looks weak on the charts. The stock can slip to Rs 337 if it trades weak around Rs 345 for a while.  Day traders with a good risk appetite can sell the stock around Rs 345. A stop loss buy order can be placed near Rs 353.

Investors with a long term plan can continue to hold Infosys Technologies (Rs 1184) with a stop loss near Rs 1040.  Those with a good appetite for risk can take some fresh exposure around Rs 1125 levels.

Hero Honda (Rs 926) can move up a bit in the near run.  One willing to take some risk can go in for the stock now for decent returns over a short term. A stop loss can be placed near Rs 890.

GMR Infrastructure (Rs 78) can be picked up at declines.  Investors looking at long term can accumulate the stocks in a staggered way. A stop loss can be placed around Rs 45 - 47.

Areva (Rs 191) is expected to move up sharply over a medium term. Investors with some appetite for risk can consider buying the stock at current levels. Others can wait for the stock to drift down by 5 - 10% from here.  Long term investors can hold the stock with a stop loss near Rs 130.

In line with global markets, equities have opened on a weak note on the Indian bourses this morning.  The Sensex opened nearly 100 points down at 8943.78 and slipped to a low of 8892.72.

At 8902.05, the Sensex is down by 140.58 points or 1.55% at present.  The Nifty is down 1.31% or 36.45 points at 2752.90, a few points off a low of 2747.30. DLF, ICICI Bank, RComm, RIL, Reliance Infra, L&T, SBI and HDFC have posted sharp losses.  Nalco, Zee, ABB, Tata Comm, PNB, BPCL and Unitech have also declined sharply.