Wednesday, March 18, 2009

BSE / NSE Share Market Analysis for 18-03-09

A round of profit taking in some front line stocks wiped off a portion of market's gains but the premier indices still ended on a firm note today.  The overnight rally on Wall Street, the firm trend on the Asian and European bourses and hopes of a recovery in global economy kept the undertone positive.

The Sensex, which rose to 9120.46 in intra-day trades, ended at 8977.74 (provisional) with a gain of 113.92 points or 1.29%. The Nifty closed at 2792.40, up 1.27% or 34.95 points. It touched a high of 2836.05 today.

Realty stocks were on song. Mirroring their surge, the Realty index shot up by nearly 8.5%.  Metal, capital goods and bank stocks too had a bright session today.  Buying turned stock specific in power, oil, auto, IT and pharma sectors in afternoon trade.  FMCG stocks remained subdued almost right through the session.  Midcap and smallcap stocks attracted attention.

DLF, JP Associates, Tata Steel, ICICI Bank, BHEL, Reliance Infrastructure, L&T, Hindalco, RIL, Sterlite and HDFC Bank closed with strong gains.  RComm, TCS, ONGC and SBI also moved up sharply.  Suzlon, SAIL, Unitech, RPL, PNB, Idea Cellular, GAIL India, Hero Honda, Siemens, Cairn India, HCL Tech and Reliance Capital posted sharp gains.
M&M, ITC, Tata Power and ACC declined sharply. BPCL, Ambuja Cements, Tata Comm, Zee, Power Grid and Cipla also ended weak. The market breadth was strong right through the session.

Tata Steel, SAIL and Sterlite Industries can be accumulated at declines.  Over a long run, one can reap solid returns from investments in these stocks.  Hindalco may struggle around a bit, but then, its long term prospects appear fairly bright.  Jindal Steel, Sesa Goa and Nalco can also give impressive returns.

Infosys Technologies (Rs 1285) can be retained for long term with a stop loss at Rs 1040 levels.  One can accumulate the stock in small lots at sharp declines from current levels.  TCS, Wipro, Tech Mahindra, Oracle Financial Services and HCL Technologies can also give solid returns over a medium to long term.  Among other IT stocks, Moser Baer, Patni Computer Systems and Mphasis look attractive.

Jet Airways (Rs 165) may face some stiff resistance at Rs 173 - 175 levels.  Investors or traders with a low appetite for risk can exit near those levels and look at re-entering later at declines.  Long term investors can increase exposure at Rs 150 or slightly lower.  Other airlines stocks KingFisher Airlines and SpiceJet too can be tried for decent returns over a medium term.

Larsen & Toubro (Rs 644) is a good stock for long run. Though it has been taking some hammering of late, long term investors need not worry about its future prospects.  One with reasonably good cash reserves can consider buying more of this stock at current levels. A stop loss can be placed around Rs 550.

BEML, BHEL, Punj Lloyd, Praj Industries and Crompton Greaves are among other good stocks for long term from the capital goods space. One with a good appetite for risk can go in for Suzlon, Siemens and Reliance Industrial Infrastructure at current levels.

SBI (Rs 965) can give very strong returns over a long run.  The stock has taken a severe beating in recent sessions and hence a sharp rebound is likely over the next couple of weeks.

Investors or traders with a low appetite for risk can sell a part of their holding in the stock at rallies and consider a re-entry later at declines.  Long term investors can have a stop loss at Rs 890 for now. The stock will have to rise to Rs 1200 and trade firm for a few sessions to make a significant upmove from there.

NTPC (Rs 176) is a good stock for long term.  One can stay invested in the stock with a stop loss near Rs 150.  The stock's next strong support is around Rs 120 levels.  NLC, Areva, CESC and Power Grid are among the other good picks from the power space.

ICSA India Ltd has secured work orders for a total contract value of Rs 464.17 crores from Bihar State Electricity Board, Mahavitaran and M P Poorv Kshetra Vidyut Vitaran Co. Ltd.  The stock has vaulted nearly 10% to Rs 69.40 today and a further upmove looks likely in the near to medium term.  Long term investors can hold the stock with a stop loss at Rs 46 - 48 levels.

One with a long term plan can go in for Cranes Software.  The stock, currently traded around Rs 43, can give decent returns even over a short run.  For now, one can hold the stock with a stop loss at Rs 35.  Long term investors can buy more of this stock at declines.

Ashok Leyland (Rs 18) can give some decent returns over a short to medium run.  One can stay invested in the stock with a stop loss near Rs 13.   The stock may find some strong resistance at Rs 22 and a decisive breakout there can result in a surge to Rs 26 or even higher.  Long term investors can continue to hold the stock with a trailing stop loss.

Strides Arcolab has jumped nearly 8% to Rs 78 today.  Investors looking at long term can take some exposure in the stock at current levels. Further quantities can be bought in a staggered way at declines.  The company has announced that the USFDA has approved its Sterile Complex at Bilekahalli, Bangalore to be cGMP compliant after due inspection.

The Sterlie complex at Bilehahalli, which was recently completed with its capacity expanded by over 500%, has three dedicated blocks, manufacturing Penicillin, Cephalosporin and injectibles in Dry Powder, Liquid Vials, Prefilled Syringes and Lyophilised products.

One can stay invested in power stocks on a long term perspective.  CESC, Areva, Power Grid, NLC and PFC can give fairly strong returns over a long run.  Those with a good appetite for risk can consider going long in Tata Power, RPower and Reliance Infrastructure with strict stop loss triggers.

The Nifty (2814) has good support near 2790.  Weakness around that support level can result in a fall to 2755 or further down into the red.  On the upmove, the index can move on to 2850 where it may face some strong resistance.

Investors looking at medium to long term can go in for PSU bank stocks.  SBI, Punjab National Bank, Bank of India, Bank of Baroda and Indian Bank look good.  Among low priced stocks, UCO Bank, Syndicate Bank and Andhra Bank can be tried.

Cairn India (Rs 175.85) can move up a bit today. Traders with some appetite for risk can go in for the stock now with a stop loss near Rs 173. The stock can move on to Rs 181 or even higher.  One looking at long term can continue to hold the stock and consider buying more at declines from current levels.

The bulls have come back fairly strongly into the ring.   Amid signs of a global economic recovery, several investors appear to be returning to the bourses these days.

Though some weak spells are likely, the market is unlikely to see a sustained downside from here.

Still, it is advisable to stay cautious and be selective with regard to fresh exposure at higher levels.

Trading got off to a buoyant start on the major Indian bourses this morning thanks to positive global cues. The Sensex has rallied to 9002.23, recording an impressive gain of 138.41 points or 1.56%.  The Nifty has notched up a gain of 1.4% or 40.10 points.  Realty, bank, metal, capital goods, power, oil, IT and auto stocks have all moved up sharply.

ICICI Bank, Tata Motors, RComm, HCL Tech, Suzlon, Unitech, SAIL, Tata Steel and Ranbaxy have gained 2.5% - 4%. RIL, SBI, BHEL, Infosys, TCS and Wipro have also moved up sharply.