Tuesday, May 5, 2009

BSE / NSE Shares analysis 05-05-09

BSE / NSE Shares analysis 05-05-09

The market opened weak and despite bouncing back subsequently, moved in a choppy fashion right through the session today as Investors looked to book profits in several front line stocks.  The Sensex ended at 12,131.08, down 3.67 points.  It touched a high of 12,197.88 and a low of 11,985.88 today.

The Nifty closed at 3649.60 (provisional) with a loss of 4.40 points.  Realty stocks moved up sharply.  Metal, bank, capital goods and power stocks also rallied and signed off on a bright note.  FMCG and IT stocks lost ground on profit taking. 
Oil, auto and pharma sectors saw stock specific action today.  DLF ended with a big gain of 11.4%.  Tata Steel, ICICI Bank, Tata Motors, Reliance Infra, Ranbaxy, RComm and L&T posted strong gains.  HDFC, ITC, M&M, Infosys, TCS, SBI, NTPC and Maruti ended weak.

The market breadth was quite strong today.

Reliance Capital (Rs 602) can give modest returns over a short run.  One holding the stock with a medium term outlook, can retain it with a stop loss at Rs 520 - 530 levels.  A strong move past Rs 625 can result in a surge to Rs 735 - 750.

One can stay invested in sugar stocks for some solid returns over a short to medium run.  Bajaj Hindustan, Balarmpur Chini, Shree Renuka Sugars and Triveni Engineering have gained in strength today.  A further upmove looks very likely in the near run. Declines can be used to increase exposure to the sector.

IndusInd Bank has reported a sharp rise in net profit for the quarter ended March 2009.  The bank's net profit rose 250 per cent to Rs 50.52 crore from a net profit of Rs 14.45 crore it had recorded in the corresponding quarter last year. The bank has recommended dividend at Rs 1.20 per equity share of paid up value of Rs 10.  The stock has gained nearly 7% to Rs 47.10 now.

Strides Arcolab has announced that it has commenced commercial supplies of Oseltamivir Capsules for Influenza-A Virus.  
The stock, traded at Rs 114 (up nearly 7%) now, can see some more upside before facing some resistance.  Long term investors can hold the stock with a stop loss at Rs 60.

Jubilant Organosys (Rs 131.50) looks good for long term.  One holding the stock can stay invested and look at buying more at declines.  For now, one can have a stop loss in place near Rs 110.

Tata Steel (Rs 278) will have to make a strong breakout at Rs 280 in order to make a further move up north today.  The stock has support at Rs 272 and a fall to that level and a bit of struggle there can result in a slide to Rs 265 or even lower.

SBI (cmp Rs 1356) is trading near a crucial support level now.  A strong breakout at Rs 1385 can result in the stock surging further higher to Rs 1430.  A fall to Rs 1310 and some weakness there could result in a slide to Rs 1240 or even lower.

The market may see some correction over the next few sessions.  The results of stress tests of U.S. banks will be released by Thursday and any negative reports may result in a sell-off of fairly strong magnitude on Wall Street. Such a fall could cast a shadow on other bourses as well.

Asian markets are mostly trading firm.  The mood back home remains a bit cautious today. With investors looking to book some profits at higher levels, the market is struggling to make a significant headway now.  Investors with no great appetite for risk would do well to book some profits. A re-entry can be made later at declines.

Tata Motors (cmp Rs 268) can face some resistance at Rs 280 - 285 levels.  A breakout there can result in a surge past Rs 300.  Investors with some appetite for risk can stay invested with a stop loss near Rs 250.  Long term investors can place a stop loss near Rs 175.

L&T can be retained for medium to long term.  One can look at buying more of this stock in a staggered way at declines.
For now, a stop loss can be placed near Rs 830.

ACC has reported a sharp rise in cement shipment figures for March 2009.  With demand for cement likely to see a sharp surge over the next few quarters, one can look at buying ACC for medium to long term.  A modest exposure can be taken at current levels. More can be added at sharp declines from here.

The Nifty (3630) dropped down to a low of 3619 this morning. Another fall to that level and some weakness there can result in the benchmark plunging to around 3585.  On the upmove, the index will have to decisively break a resistance at 3680 to make a significant progress today.

Trading got off to a cautious start on the major Indian bourses this morning.  After yesterday's splendid surge, investors appear to have turned a bit cautious and are seen booking some profits in a few front line stocks.  The Sensex, which opened at 12,159.74, around 25 points higher, is currently down with a loss of 70.94 points or 0.58% at 12,063.81.

The Nifty is down 0.51% or 18.55 points at 3635.45. It fell to a low of 3622.20 after an initial surge to 3680.25.  HDFC, Wipro, HDFC Bank, Infosys, M&M, TCS, Sun Pharma, ITC, Sterlite and RIL have declined sharply.  ICICI Bank, Tata Steel, RComm, Ranbaxy, L&T, ACC, Unitech, Tata Comm, Cairn and ABB have posted sharp gains.

Market Outlook

The market is likely to open on a firm note this morning. However, with the rally now extending past eight weeks, a section of high net worth and retail investors may choose to book some profits at higher levels. The undertone, however, is likely to remain quite firm.

Sector Watch

The sharp rise in crude oil prices may render shares of oil marketing firms a bit sluggish today. Auto, metal and capital goods stocks may attract profit taking at higher levels. Select IT, bank and realty stocks are likely to extend gains.

Scrip Watch

Wockhardt may see action on reports that the company has received tentative approval from US Food and Drug Administration for its Adenosine injection. The drug, indicated for supraventricular tachycardia in cardiac patients, would be available in the strength of 3 mg/ml.

Bharti Airtel will be in focus. With its current multi-billion dollar network outsourcing deals with equipment majors Ericsson and Nokia Siemens Networks coming up for renewal next year, The company is expected to start inviting bids from global equiment vendors in the near future.

ACC will attract attention following an announcement from the company that it sold 1.8 million tons of cement in the month of April 2009, 4% more than the 1.73 million tons it had sold in the same month last year.

Macro and Market Factors

Bolstered by news that pending home sales for March advanced by 3.2%, higher than what was expected earlier, and construction spending increased 0.3% month-over-month, Wall Street rallied sharply on Monday and the key indices Dow Jones Industrial Average and the Nasdaq ended stronger by 214 points and 44 points respectively.

Asian markets took cues from Wall Street and moved up sharply in early trading today. However, right now they are seen exhibiting some weakness. Markets in Japan and South Korea are closed today. The mood back home is likely to be cautious, with a positive bias.