BSE / NSE Shares analysis 11 May 2009

BSE / NSE Shares analysis 11 May 2009

The market opened on a firm note, remained in positive zone for just about an hour today.

After moving in a tight band for sometime, it declined sharply around noon and kept losing ground consistently in afternoon trade due to weakness in Asian and European markets.

Investors appeared keen on booking profits after recent strong gains. Political uncertainty also weighed in to a notable extent.

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The Sensex, which opened with a positive gap of nearly 125 points and moved on to 12,026.60, ended at 11,667.25 (provisional) with a big loss of 209.18 points or 1.78%.

The Nifty closed at 3552.35, more than 100 points off the day's high of 3660.20, netting a loss of 68.35 points or 1.89%.

All the sectoral indices ended in the red today.  Realty, capital goods and metal stocks declined sharply.  Power, oil, IT, pharma, telecom and FMCG stocks also suffered sharp losses.

Bank stocks opened well and stayed firm in morning trade, but lost their way thereafter.  DLF, JP Associates, Tata Motors, SBI, Tata Steel and RComm lost 4% - 6%.  Grasim, Ranbaxy, HUL, L&T, TCS, Bharti Airtel, BHEL, RIL, HDFC and ACC also ended with sharp losses.

Unitech, Cairn India, HCL Tech, Reliance Capital, SAIL, RPower, Cipla, Tata Comm, Siemens and ABB went down sharply.  Axis Bank, ICICI Bank and M&M bucked the trend and ended on a firm note.  Heavy selling was seen at several midcap and smallcap counters.  The market breadth was very weak at close.

One holding Gujarat NRE Coke (cmp Rs 31) can stay invested with a stop loss near Rs 27.  The stock can rise by around 10 - 15% in the near term.  A strong resistance is seen around Rs 40. A decisive breakout there can result in a jump to Rs 55 or even higher.  The market is likely to see some strong rounds of correction in the near term.  The Sensex, which has had a pretty good run over the past few weeks, is likley to fall to around 11,200 levels.

One with a good appetite for risk can go in for Bajaj Hindustan and Renuka Sugars now.  A rise of 10 - 20% looks likely over a short run. Investors willing to wait for 6 - 9 months can continue to hold the stock.  Balrampur Chini and Triveni Engineering also look good for medium term.

One can go in for Tata Steel, SAIL and Jindal Steel at sharp declines.  These stocks are likely to drift lower from their current levels and one can treat these falls as opportunities to increase exposure.  Hindalco and Nalco can also be picked up at sharp dips.

Investors looking at medium to long term can continue to hold power stocks Power Grid, Areava, CESC, NTPC and NLC.  Though a few spells are round the corner for these stocks, their long term prospects continue to remain pretty bright.

One holding bank stocks with a long term plan can stay invested.  Fresh buying can be considered in IOB, Andhra Bank, Bank of India, Bank of Baroda, PNB and Canara Bank at sharp declines.  

UCO Bank and Syndicate Bank can also be bought for long term. One can try these stocks at 10 - 15% down from current levels.

After a steady start, most of the Asian markets have plunged into the red today.  Investors across the globe appear keen on booking profits after recent strong rally.  European markets have opened lower and U.S. index futures too have drifted down.  The mood back home is quite bearish right now.

Global economy appears to be recovering slowly but steadily.  But uncertainty over election results may render the market quite volatile for the next couple of weeks.  One looking for long term gains can stay invested in quality stocks.  Those looking at short term would do well to book profits at rallies and re-enter later at dips.

Sesa Goa (Rs 138) looks good for long term.  The stock can see some weak spells in the near run, but has fairly good support at Rs 110 levels. For now, one can hold the stock with a stop loss there. A decisive breakout past Rs 142 can result in a surge to Rs 155 - 160.

Four Soft Ltd has informed that Prime Cargo Netherlands BV, a Netherlands based freight forwarding company has selected Four Soft's Integrated freight forwarding solution - 4S eTrans SME, to rationalize and automate its freight forwarding processes.

The contract was executed through Four Soft Netherlands B.V., a subsidiary of Four Soft Ltd, India.  At Rs 16, one can try the stock as downside risk looks somewhat limited from here. A stop loss can be placed near Rs 10.

One looking for some short term gains can go in for NLC (Rs 101).  The stock looks set for a sharp upmove. A rise to Rs 120 looks very likely.  A stop loss can be placed at Rs 90 - 92 levels.

Aurobindo Pharma (Rs 287) can be picked up for long term at Rs 5% - 10% down from its current levels.  Though a sharp downside looks unlikely, a modest fall is in the offing for the stock.  Long term investors can hold the stock with a stop loss near Rs 220 for now.

Investors holding Sintex Industries (cmp Rs 161) can stay invested if they are looking at long term.  Short term traders can exit the counter or book partial profits at sharp rallies and re-enter later at declines.  Though a sharp upmove is not ruled out altogether, the stock is likely to face some pressure in the near run.

Polaris (up 2.35% at Rs 76.80) looks poised for a further upmove in the near to medium term.  Investors with a decent appetite for risk and looking for some smart gains over the next 6 - 9 months, can try this stock at Rs 70 levels.