After trading lower during the initial part of the week ended, markets rallied on Friday to end the week on a positive note.
On the BSE, the Sensex gained 243 points to close at 14,765 and the Nifty on the NSE logged 62 points to finish at 4,375.
Renewed interest was seen in midcap and smallcap stocks, both the CNX Midcap and the BSE Smallcap indices outperformed the benchmark indices rising 3.8 per cent and 3.3 per cent for the week.
Increase in weightage of ICICI Bank (2.8 per cent to seven per cent), L&T (3.3 per cent to 7.9 per cent) and Infosys (3.7 per cent to 7.4 per cent) in the Nifty after adoption of free float computation triggered buying in the counters from Index funds.
Forecast of below normal monsoon, ‘fresh’ selling by FIIs and weak global economic reports have turned market players cautious ahead of the Union Budget.
With many Cabinet ministers making all the right noises, investors’ expectations are at sky high over the Union Budget. But remember that markets rise on hope and correct on news. In the absence of any negative global cues, market direction to be dictated by economic survey and Railway Budget in the coming week.
For the week ahead, chartists predict trading range of 14,200-15,400 for the Sensex and 4,100-4,680 for the Nifty. Immediate supports for the indices are the ‘lows’ of Friday at 14,370 and 4,240. Below these levels, sharp decline to 13,800 and 4,050 is not ruled out.
Expect resistance to the indices at 14,960 and 15,280 for the Sensex and 4,460 and 4,580 for the Nifty. It is the time to get out of all the risky stocks and hold quality stocks; In the event of market reversal after the Budget, it becomes difficult to exit from speculative counters, warn savvy market players.
F & O
Brisk volumes were seen in the derivatives segment during the week ended. However, rollover of positions was only 74 per cent — the lowest since May 2005. Lowest rollover of only 55 per cent was seen in Nifty futures indicating abundant caution ahead of the Union Budget.
Option segment reveals aggressive put writing at 4,200 and call writing at 4,500, 4,600 strikes indicating strong support at 4,150-4,200 and stiff resistance at 4,500-4,550.
Use strangle or straddle strategies to take advantage of post-Budget volatility.
Choose the options carefully since premiums are high at present. The July series will be bearish below 4,200-level on closing basis.
Capital goods, infrastructure and power stocks witnessed good buying interest. Further gains indicated in Punj Lloyd, IVRCL, Lanco Infra, NCC and HCC.
Speculative build up seen in ‘road’ stocks after positive statements from the roads and highways minister, Mr Kamal Nath. Buy Noida Toll and IRB Infra for target prices of Rs 60 and Rs 200 in next few weeks.
Real estate stocks are back in demand on reports of modest revival in housing sector. Buy DLF, Unitech and HDIL at current levels for short term targets of Rs 375, Rs 110 and Rs 290. After the announcement of Unique ID project, IT analysts are bullish on domestic e-governance opportunities.
Selective buying suggested in the sector for good medium-term gains. Speculative build up in JP Associates, Suzlon, IFCI and Cairn may see stocks spike from current levels. Wild swings likely in Orchid Chemicals and Kingfisher counters say punters.
SATTA GUPSHUP
n Countdown has started for the Railway Budget. Stocks on the radar are BEML, Kalindee Rail, MIC Electronics, Kernex Micro, Titagarh Wagons, Texmaco and Stone India. Liberalised wagon investment scheme, replacement of old coaches with GenX suburban rail coaches and addition of new rakes will benefit coach and wagon manufacturers like BEML, Texmaco and Titagarh. Stone India is manufacturer of alternators, air brakes and regulators, while Kernex Micro is anti-collision device maker. Switch to power saving LED lighting devices and modern display systems will benefit MIC Electronics. Kalindee Rail specialises in rail tra-cks, signaling and telecommunications. Expansion of Delhi Metro and freight corridor project will benefit Kalindee Rail. Stay invested and buy on declines for near term gains.
n Here is a forecast of market movement on a combination of events:
Dream budget + good monsoons = 17000/18000; Good budget + Average monsoons = 13500/14500; Bad budget + Average monsoons = 10000/11000; Bad budget + below normal monsoons = 9500/10500.
n Sources indicate good results from Premier Explosives. Stay invested and add on declines for price target of Rs 60. Sree Rayalaseema Alkalies has corrected sharply after announcement of excellent results on reports of institutional selling. The stock is a good buy for a price target of Rs 30 in near term. Results of Zen Technologies are better than expectations and confirm the growth trajectory of the company. Buy on declines for steady long term gains. Low priced Ecoboard Inds (Rs 13) has declared dividend of 10 per cent offering good yield at current price. Aluflouride may declare dividend of 15 per cent say sources. Steady gains from current level likely.
C. Kutumba Rao is a Hyderabad-based stock market analyst. The views expressed and the recommendations made are those of the author. Readers are strongly recommended to consult their financial advisors before making any financial investments. This newspaper is not liable for investment decisions made on the basis of recommendations in these columns.
Source : deccan chronicle
Showing posts with label Deccan Chronicle. Show all posts
Showing posts with label Deccan Chronicle. Show all posts
Tuesday, June 30, 2009
Monday, June 22, 2009
Market Khabar 22 June 2009
Free float of Nifty may bring high volatility
June 22nd, 2009
By C. Kutumba Rao
After 14 weeks of sustained gains, the markets closed lower during the week ended on worries that the ongoing rally has been overdone.
On the BSE, the Sensex shed 716 points to end at 14,522 and the Nifty on the NSE closed at 4,313, down 270 points. The broader market “struggled” and ma-rket breadth was deeply ne-gative reflecting the “fra-gility” of the rally.
Weak global markets, co-urt ruling in the RIL-RNRL case and unwinding of positions by FIIs have impacted the sentiment. Positive “noi-ses” from key ministries ov-er reforms and fresh “inve-stor friendly” steps from the market regulator Sebi failed to enthuse markets. Key events to watch out for in the week ahead are the US Fed meet and the F&O settlement. Removal of 50 stocks from the derivative segment and the move to compute the Nifty on free float concept may trigger high volatility in next few days. Chartists predict a trading band of 14,100-14,980 for the Sensex and 4,080-4,550 for the Nifty. Expect resistance to the indices at 14,800 and 15,000 and 4,390 and 4,480. Supports for the we-ek are at 14,180 and 13,800 and 4,220 and 4,100. Avoid fresh longs if indices do not sustain above 14,800 and 4,380. The rate of decline by the indices has been quite strong; caution advi-sed till budget. Avoid large positions and trade lightly. Be pliable at all times, but don’t overtrade. Try to avoid holding postmortem examinations of the “might have beens” in the market.
SATTA GUPSHUP
* eClerx Services is India’s first listed KPO providing data analytics and customised process solutions to global enterprise clients from its offshore delivery centres in India. It has been featured under Forbes 200 Best under a Billion list of companies judged on a number of performance criteria including growth in sales and profitability. Despite very high average return on capital employed, the stock price is at P/E multiple of just 8. Buy at current levels for target price of Rs 350.
* Allcargo Global Logistics is one of the largest logistics service provider operating in the seven key areas of the logistics business-multi modal transport, CFS, Airfreight, transport logistics, equipment hiring, project and ODC cargo handling and Oil rig and supply vessels management. The company has acquired substantial equity in Gateway Distriparks Ltd.
Sources do not rule out M&A possibility in coming few months and also indicate stock split in near term. book value of Rs 208 and TTM earnings of Rs 42 make the company’s stock is a good buy for a target price of Rs 1,200.
F & O
Mirroring the weakness in the broader markets, volumes dipped in the derivative segment ahead of settlement week. Rollover was low at 12.7 per cent compared to usual 25 per cent.
However, the total open interest saw a rise of 7.1 per cent in terms of value and 29.46 per cent in terms of number of shares.
Nifty OI PCR has dropped to 0.91; technical bounce back from current levels not ruled out. Option activity clearly defines the boundaries of the trading range-strong support at 4,200 and resistance at 4,400.
Be bearish below 4,200 and bullish above 4,400. Stock futures looking good for speculative gains are HDIL, Suzlon, Essar Oil, Educomp, ICICI Bank, India Info, Reliance Infra, Indusind, Tata Comm., Canara Bank and Dr Reddy Labs.
Spike in counters like Srei Infra, 3i Infotech, Punj Lloyd, IDBI, GDL and IRB Infra likely. GVK Power and Tata Motors are likely to gain steam on reports of pricing of QIP’s.
True to predictions renewed buying interest was seen in banking counters. Stay invested in Axis, IDBI, PNB, Union and OBC for further gains.
Reaction to merger proposal of SBI and its subsidiary is keenly awaited by markets. VIX has ended higher at 49 indicating high volatility in coming week.
Consider strangle strategy in options because direction of markets is uncertain. Before taking a position, determine exactly where the stock you are watching, or the general market, stands. A study of price, breadth, activity, time and volume will be helpful in this respect.
Source : deccan.com
C. Kutumba Rao is a Hyderabad-based stock market analyst. The views expressed and the recommendations made are those of the author. Readers are strongly recommended to consult their financial advisors before making any financial investments. This newspaper is not liable for investment decisions made on the basis of recommendations in these columns.
June 22nd, 2009
By C. Kutumba Rao
After 14 weeks of sustained gains, the markets closed lower during the week ended on worries that the ongoing rally has been overdone.
On the BSE, the Sensex shed 716 points to end at 14,522 and the Nifty on the NSE closed at 4,313, down 270 points. The broader market “struggled” and ma-rket breadth was deeply ne-gative reflecting the “fra-gility” of the rally.
Weak global markets, co-urt ruling in the RIL-RNRL case and unwinding of positions by FIIs have impacted the sentiment. Positive “noi-ses” from key ministries ov-er reforms and fresh “inve-stor friendly” steps from the market regulator Sebi failed to enthuse markets. Key events to watch out for in the week ahead are the US Fed meet and the F&O settlement. Removal of 50 stocks from the derivative segment and the move to compute the Nifty on free float concept may trigger high volatility in next few days. Chartists predict a trading band of 14,100-14,980 for the Sensex and 4,080-4,550 for the Nifty. Expect resistance to the indices at 14,800 and 15,000 and 4,390 and 4,480. Supports for the we-ek are at 14,180 and 13,800 and 4,220 and 4,100. Avoid fresh longs if indices do not sustain above 14,800 and 4,380. The rate of decline by the indices has been quite strong; caution advi-sed till budget. Avoid large positions and trade lightly. Be pliable at all times, but don’t overtrade. Try to avoid holding postmortem examinations of the “might have beens” in the market.
SATTA GUPSHUP
* eClerx Services is India’s first listed KPO providing data analytics and customised process solutions to global enterprise clients from its offshore delivery centres in India. It has been featured under Forbes 200 Best under a Billion list of companies judged on a number of performance criteria including growth in sales and profitability. Despite very high average return on capital employed, the stock price is at P/E multiple of just 8. Buy at current levels for target price of Rs 350.
* Allcargo Global Logistics is one of the largest logistics service provider operating in the seven key areas of the logistics business-multi modal transport, CFS, Airfreight, transport logistics, equipment hiring, project and ODC cargo handling and Oil rig and supply vessels management. The company has acquired substantial equity in Gateway Distriparks Ltd.
Sources do not rule out M&A possibility in coming few months and also indicate stock split in near term. book value of Rs 208 and TTM earnings of Rs 42 make the company’s stock is a good buy for a target price of Rs 1,200.
F & O
Mirroring the weakness in the broader markets, volumes dipped in the derivative segment ahead of settlement week. Rollover was low at 12.7 per cent compared to usual 25 per cent.
However, the total open interest saw a rise of 7.1 per cent in terms of value and 29.46 per cent in terms of number of shares.
Nifty OI PCR has dropped to 0.91; technical bounce back from current levels not ruled out. Option activity clearly defines the boundaries of the trading range-strong support at 4,200 and resistance at 4,400.
Be bearish below 4,200 and bullish above 4,400. Stock futures looking good for speculative gains are HDIL, Suzlon, Essar Oil, Educomp, ICICI Bank, India Info, Reliance Infra, Indusind, Tata Comm., Canara Bank and Dr Reddy Labs.
Spike in counters like Srei Infra, 3i Infotech, Punj Lloyd, IDBI, GDL and IRB Infra likely. GVK Power and Tata Motors are likely to gain steam on reports of pricing of QIP’s.
True to predictions renewed buying interest was seen in banking counters. Stay invested in Axis, IDBI, PNB, Union and OBC for further gains.
Reaction to merger proposal of SBI and its subsidiary is keenly awaited by markets. VIX has ended higher at 49 indicating high volatility in coming week.
Consider strangle strategy in options because direction of markets is uncertain. Before taking a position, determine exactly where the stock you are watching, or the general market, stands. A study of price, breadth, activity, time and volume will be helpful in this respect.
Source : deccan.com
C. Kutumba Rao is a Hyderabad-based stock market analyst. The views expressed and the recommendations made are those of the author. Readers are strongly recommended to consult their financial advisors before making any financial investments. This newspaper is not liable for investment decisions made on the basis of recommendations in these columns.
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