Tuesday, March 24, 2009

BSE / NSE Share Analysis for 24 March 2009

BSE / NSE Share Analysis for 24 March 2009

 Heavy selling in late afternoon trade pushed the market, which was till then trading firm, down into the negative territory by close of the session today.  The Sensex, which touched a high of 9699 around noon, ended the day at 9402.64 (provisional) with a loss of 21.38 points or 0.23%.  The Nifty closed at 2915.55, far down from a high of 3017.40, recording a loss of 24.35 points or 0.83%.  The US Treasury's plan to buy the toxic assets of banks had triggered heavy buying on Wall Street yesterday.  Asian markets echoed the sentiment and the bulls back home too took cues and went on a rampage this morning.

Short-covering ahead of March series F&O expiry too contributed to the sharp upmove in morning and early afternoon trade.  Due to profit taking, metal, PSU, pharma, power and IT stocks declined sharply.

Oil, auto, FMCG and capital goods stocks too wilted under pressure.  Even bank and realty stocks, which were sailing along merrily till around mid afternoon, shed most of their gains.  Midcap and smallcap stocks tumbled as well. HDFC Bank gained over 6%. ICICI Bank, BHEL, Ranbaxy and M&M closed with sharp gains.  JP Associates, Hindalco, RComm, Reliance Infra, Tata Steel, Sun Pharmaceuticals and Tata Motors declined sharply.  ONGC, Sterlite, NTPC, Tata Power, Infosys, ACC and DLF also closed on a weak note.  Reliance Capital, SAIL, Idea Cellular, GAIL, RPower, Cairn and Nalco ended with sharp losses.  Siemens, Suzlon, Zee, Unitech, BPCL, PNB and Tata Communications recorded impressive gains.  The market breadth was negative at close.

With inflation coming down sharply, there may be another round of rate cut from the Apex bank in the near term. 
The economy may show signs of a recovery only after a couple of quarters and the market is likely to remain quite slippery till then. One can treat sharp rallies as good opportunities to book profits. Fresh buying can be considered at sharp declines.

One looking at medium term can consider buying HPCL, BPCL and Indian Oil Corporation at 10% - 15% down from their current levels.  RPL may face strong resistance at Rs 100 - 105. One can exit the counter there and re-enter later at sharp declines. Due to profit taking at several counters, the market has given up most of its gains now. The Sensex and Nifty hold on in the positive territory with just modest gains at present.  There may be another round of buying before March series derivatives expiry but one would do well to stay cautious and refrain from making big commitments for now.

One with a medium or long term plan can continue to hold Zee Entertainment (cmp Rs 105).  Exposure to the counter can be increased at sharp declines from current levels. The stock will take some support at Rs 88 and one can place a stop loss near that mark. A modest rise is likely even over a short run.  Other media stocks like Sun TV Network, ND TV and Deccan Chronicle Holdings can also give decent returns over the next 2 - 3 months.

Patel Engineering Limited has announced that it has bagged an order worth Rs 799 crore from the Narmada Valley Development Authority for Bargi Diversion Project.  The firm would execute the project througth a joint venture with SEW Constructions Limited.  Patel Engineering has recovered well from a 52-week low of Rs 103.15 it had touched on 12 March this year. The stock is traded around Rs 132 at present. Investors looking at long term can go in for it at Rs 120 - 125 levels.

The market has come off its higher levels due to profit taking.  Though a rebound is not ruled out, one would do well to tread a cautious path in the near run. Despite some massive measures from central banks and governments across the globe, the economy is likely to take some time to recover. Till then, caution is the watchword. It is advisable to stay selective and take stock specific action.

M&M (Rs 386) can be retained if one is looking at the stock with a long term plan.  More buying is considered at declines from current levels.  Long term investors can have a stop loss at Rs 320. Further down, the stock has support around Rs 270 and Rs 235 levels.

The Nifty (3000) can face some strong resistance around 3040.  Some strength there and a subsequent breach of 3050 can result in a surge to around 3095 or even higher.  On the downside, the index has very strong support at 2750 levels. Before that, the benchmark may get good support near 2940.

SAIL (Rs 94) is trading near a crucial resistance level now.  If the stock manages to decisively breach this resistance around Rs 95, the a rise to Rs 115 - Rs 120 looks likely.  On the downside, the stock can drop down to Rs 68 where it has good support. Medium and long-term investors can hold the stock with a stop loss near that level.

One can look at buying telecom stocks Reliance Communications and Bharti Airtel at sharp declines.  There may not be a sustained upmove in the near run but these two stocks are expected to yield good returns over a 15 - 18 month span.  Tata Teleservices looks attractive at current levels. A modest exposure can be taken in Idea Cellular and Tata Communications too.

Infosys Technologies (Rs 1354) can be picked up at declines for long term.  Though the stock may not see a sustained fall from here, some weakness is likely in the near run.  Wipro, TCS, HCL Technologies and Tech Mahindra can also be bought at sharp declines from current levels.

L&T (Rs 625) can be picked up at declines for long term.  The stock has moved up sharply today. Though a further upmove is not ruled out in the near run, some selling is likely at the counter and the stock can well drift down to around Rs 600 again.  One looking at long term can also go in for BHEL, Bharat Electronics, BEML, Thermax and Praj Industries around their current levels. Small quantities can be added at declines.

Nagarjuna Fertilizers & Chemicals Ltd has informed BSE that the Company has completed installation of the 450 MTPD Carbon Dioxide Recovery Plant to meet the shortfall in CO2. The installation of the C02 Recovery Plant is an environment friendly project and recognized as Clean Development Mechanism Project.  Investors looking at medium to long term can continue to hold Nagarjuna Fertilizers (cmp Rs 15.85) with a stop loss around Rs 12.

Omaxe has zoomed to Rs 49, recording a thumping gain of 13.75% this morning.  The stock can move up further in the near run. One with a good appetite for risk can take some positions in the stock now. More can be bought at declines. For now, a stop loss can be placed near Rs 39.  The launch of Omaxe Eternity, a project spread over an area of 52 acres in Vrindavan and estimated to be worth around Rs 250 crore, has triggered hectic buying at the Omaxe counter this morning.

Stock prices surged higher in early trade on the major Indian bourses this morning on strong global cues.  The Sensex opened with a positive gap of over 125 points at 9549.52 and is up with a gain of 111.40 points or 1.18% at 9535.42 now.  The Nifty rose to 2976.25 in opening trade and is up nearly a per cent or 27.65 points at 2967.55 at present.  Bank, metal and capital goods are among the prominent gainers in early trade. HDFC Bank, ICICI Bank and SBI, the bank heavyweights, have gained 5.25%, 3.25% and 3.3% respectively.  Tata Steel, ACC, Hindalco, Ranbaxy, L&T, Bharti Airtel, HDFC, Tata Motors, Wipro, RComm, Maruti, Sterlite and Reliance Infra have also moved up sharply.

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