Market Outlook 14-18 Dec 2009

Spooked by a lower than expected IIP number and concerns over rising food
inflation, markets shed intra-week gains to close on a flat note during the week
ended.

On the Bombay Stock Exchange (BSE), the Sensex gained marginally by 17 points to
close at 17,119 and the Nifty on the National Stock Exchange (NSE) ended just
eight points higher at 5,117.
However, heightened trader interest was seen in the midcap and smallcap
segments. Lack of liquidity on account of advance tax payments for third quarter
and weak FII inflows were dampeners.

Indication from the RBI that there are no plans to curb foreign fund flows
failed to improve sentiment.

Post-Dubai crisis, global markets continue to be on the edge due to not too
encouraging news of the downgrading of sovereign ratings of countries like
Greece and Spain, raising fears of `false' recovery in many countries.

However, weekend news of extension of TARP till October 2010 and better than
expected reading consumer spending and sentiment propelled Dow Jones to 2009
high.
Following fresh triggers from news flow, markets may break out from the present
trading range in the next couple of weeks. Roller coaster ride on cards for the
short term players. For the week ahead, chartists indicate a trading range of
16,800-17,490 for the Sensex and 4,940-5,300 for the Nifty.

Immediate supports for the indices are at 16,960 and 16,800 and 5,040 and 4,980.
Failure to sustain the support level 5,000-5,050 may trigger sharp selloff for
near term.

Expect strong resistance to the indices at previous week's highs yet again.

Never get out of the market just because you have lost patience or get into the
market because you are anxious from waiting. When in doubt, get out, and don't
get in when in doubt.

FUTURES & OPTIONS
Lacklustre trading was seen in the derivatives segment during the week ended.
With many market players preferring to play safe, open interest rose sharply in
opt-ion segment. Profit booking was seen in both index and stock futures.
Barring capital goods, IT and power, nearly all the sectoral indices ended in
red.

Among the stock futures, accumulation of longs seen in ABB, APIL, Bharat Forge,
BHEL, Balrampur Chini, Triveni, Cummins, Indian Hotels, JSPL, Hotel Leela,
Lupin, Prajay Industries, MTNL, REC and SAIL. Hotel stocks are witnessing good
buying interest. Buy on declines Hotel Leela and Indian Hotels for further gains
from current levels.
From infra stocks, Reliance Infra and JP Associates may see burst of activity.
Buy at current levels.

With non-ferrous metals shining on LME, expect bump up in Hindalco and Nalco.
Weakness in dollar may give fillip to steel stocks. As expected, capital goods
counters led by BHEL rallied smartly. Further gains indicated in engineering
stocks. Profit booking in banking stocks likely to be short lived. Accumulate
smaller PSU banks like Vijaya, Andhra, Syndicate, Dena and others in the current
downtrend for strong gains in next month. Relief rally in telecom. Realty stocks
are facing resistance at higher levels.

Avoid fresh buying for now. After the recent correction, pharma stocks look good
for fresh uptrend. Buy Biocon, Orc-hid and Aurobindo for sharp gains. While
range bound activity is indicated in IT bluechips, midcap counters may continue
to witness buying interest. Sudden spurt is not ruled out in Pantaloon, Educomp,
MTNL, Triveni and Bharat Forge.

STOCK SCAN
Ambika Cotton Mills has expanded its captive power plant to overcome power
shortage and is setting up another 6 MW biomass power unit. It has posted good
results in Q1 and Q2. Buy at current levels for a target price of Rs 200.

Turnaround performance of RSWM Ltd in Q2 has triggered renewed buying interest
in the counter. Restructuring by demerger of some divisions helped RSWMto
improve its operating margins. Buy on declines for a target price of Rs 150.

APW President is a leading designer, manufacturer and supplier of enclosure
systems for IT and telecom infrastructure. Buy at current levels for short term
gains.

After long consolidation, the stock price of Indrapra-stha Gas Ltd is on the
fast track due to expected gains from the recent expansion of the company's CNG
outlets in the NCR region. Stay invested for target price of Rs 225 in near
term.

Steady buying seen from FIIs in hospital stocks. Stay invested in Apollo
Hospitals for a target price of Rs 675 in next few weeks.
After stock split, volumes in Hindustan National Glass are on the rise. It is
expected give an EPS of Rs 24. Buy for target price of Rs 225 in medium term.

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Market Outlook 26-30 Oct 09

Liquidity holds key for stocks after most Q2 results announced so far exceeded market expectations. A number of companies are yet to announce Q2 results. Most of the remaining Q2 results will be out next week, the deadline for the results being 31 October 2009, as per the listing norms.

The major event next week is the quarterly review of the monetary policy by the Reserve Bank of India (RBI) on Tuesday, 27 October 2009. The RBI is expected to keep its benchmark lending and borrowing rates unchanged on Tuesday. The RBI pumped in massive liquidity in the banking system in the past one year or so to help revive the domestic economy in the aftermath of the global financial crisis. While as exit from the loose monetary policy is imminent, speculation on the bourses is centred around the timing of the exit policy.

The whole price index (WPI) is expected to gallop in coming months as the statistical base effect becomes unfavorable and an economic recovery spurs demand for manufactured products. The Consumer Price Index is already in double digits.

Bank stocks will be action after comments from a finance ministry official on Friday, 23 October 2009, dashed hopes for the central bank relaxing mark-to-market rules for bank's debt holdings. The market has been agog with talks of the central bank hiking the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM) category, possibly at the quarterly monetary policy review on 27 October 2009.

Among the major results, car major Maruti Suzuki will announce Q2 results on Saturday, 24 October 2009. Ranabxy, Tata Motors, Idea Cellular and Tata Communications, are set to announce results on Monday, 26 October 2009. Tata Steel, Hindustan Unilever, Wipro, HCL Technologies and Reliance Power, unveil results on Tuesday, 27 October 2009. ACC, Cipla, Sun Pharma, GAIL India, Power Grid Corporation and Ambuja Cements, will declare results on Wednesday, 28 October 2009.

M&M, ONGC, Tata Power, BPCL, Cairn India, Grasim, Reliance Industries (RIL), DLF and Punjab National Bank, will come out with Q2 results on Thursday, 29 October 2009, to be followed by ABB, Sterlite Industries, ICICI Bank, National Aluminium Company, Bharti Airtel, Reliance Communications, Reliance Capital and Steel Authority of India on Friday, 30 October 2009. Hindalco, Jindal Steel & Power, State Bank of India, Reliance Infrastructure, Suzlon Energy and Unitech, will unveil Q2 results on Saturday, 31 October 2009.

The results announced so far have been mostly stronger than expected. The management guidance has been mixed. L&T said the company is likely to see order inflows rise over 30% in the financial year ending March 2010 and sales rise of 15%. The recent surge in crude oil prices may boost orders from the hydrocarbon sector, it said. The company said revival of infrastructure development in the Gulf augurs well as the company has a significant presence in the region.

IT major TCS said it has a good business pipeline and is pursuing 20 to 25 large outsourcing deals. Earlier, Infosys raised its earnings and revenue guidance in both dollar and rupee terms for the year ending March 2010 (FY 2010) at the time of announcing Q2 September 2009 results. Infosys, however, said strengthening rupee is a big concern for its earnings. The rupee has pared gains after hitting its highest level in more than a year recently.

Cement major UltraTech Cement said new capacities which are at various stages of implementation will result in pressure on margins for the cement industry. The company said its focus on higher volume growth, captive power generation and capital productivity, will help offset the impact of lower prices on margins.

Two-wheeler maker Bajaj Auto said raw material costs are likely to witness an upward trend in the coming quarters. The company said higher sales volumes from new launches will help leverage fixed costs and thus help partially offset a likely pressure on margins from higher input costs.

Market Outlook 12-16 October 2009

Ignoring good news such as positive global cues, liberal bonus issue from Reliance Industries and better-than-expected results from Infosys, markets tumbled from highs on heavy selling pressure during the week ended.
On the Bombay Stock Exchange (BSE), the Sensex plunged 492 points to close at 16,643 and the Nifty on the National Stock Exchange (NSE) fell by 138 points to 4,945.

Market breadth was negative during the most part of the week reflecting caution among market participants ahead of the “festival week.”

Telecom and IT scrips proved to be the biggest drag on the indices. FMCG and metal stocks were in demand on sustained buying interest. With several companies sucking liquidity by issuing QIP, IPO, GDR and other instruments, money flow to the secondary market is getting limited.

Simultaneously capital inflows have led to strengthening of rupee hitting hard the export-oriented companies. A result of one company does not change the overall outlook; keep track of broader markets to see whether the real recovery is in place.

For the week ahead, chartists predict a trading band of 16,060 and 16,970 for the Sensex and 4,780 and 5,100 for the Nifty.

Immediate supports for the indices are at 16,460 and 16,060 and 4,860 and 4,780. A close below 4,870 on the Nifty could see it plunge to 4680-level if the news flow dries up. Expect resistance to the indices at 16,880 and 17,160 and 4,980 and 5,040. You can be bullish only above 16,900 on the BSE or 5,020 on the NSE on closing basis. There is still enough scepticism about the recent rally and enough cash waiting to be invested at lower levels, feel analysts. You have to be just as willing to sell short as you are to buy.

SATTA GUPSHUP

* Shri Lakshmi Cotsyn is a diversified textile manufacturer with a product range from embroidery, quilting, fusible interlining and army products like camouflage fabric uniforms and bullet proof jackets. It has a fully-owned subsidiary for manufacturing bullet-proof armo-ured vehicles for armed for-ces and the police. The commissioning of new plants has made the firm an integr-ated textile player with div-ersified revenue mix. Buy for target price of Rs 150.
* TeleCanor is engaged in niche segments like mobile VAS, IVR-product solutions and payment gateways. Rec-ently the company has tied up with Buongiorno, one of the largest mobile entertainment and VAS firms. It has a huge chunk of land in Vis-akhapatnam near the petro corridor. Buy on declines.
* Henkel India is reportedly going to launch its international brands in cosmetics and toiletries. It is restructuring its operations like disposal of Kolkata factory and also beef up operations with the help of MNC parent. Buy at current levels.
n Gitanjali Gems is the largest integrated diamond jewellery retailer in India. It has 150 retail stores in the US by virtue of two acquisitions made last year. Adopting FMCG model to jewellery retailing, the company has grown from $300 million in 2005 to $1.2 billion in 2008. Restructuring of debt and improving economic environment spell good times for investors in the firm in the coming days. Buy for a target price of Rs 200.

F & O
Volumes were robust in both cash as well as the derivative segments. Overall open interest is presently close to Rs 1 lakh crore mark pointer of high speculative build up. Nifty PCR has fallen to 1.25 on higher addition of calls. A relief rally is not ruled out. VIX rose sharply to 30.25 reflecting concerns over sustainability of uptrend and bumpy road in near term. Accumulation of short positions seen in the counters of ACC, Bharti, Idea, Infosys, TCS, RIL, Unitech, Maruti and Tata Motors.

Unwinding of long positions seen in SBI, ICICI Bank, Reliance Infra, JP Associates, M&M, BHEL and L&T. Stocks showing positive bias are Century Textiles, Hotel Leela, IDBI Bank, HCC, GAIL, NCC, Neyveli, REC, Opto Circuits, Voltas, Welspun Guj and HDIL. These stocks are good for targets of Rs 525, Rs 45, Rs 145, Rs 155, Rs 420, Rs 190, Rs160, Rs 220, Rs 225, Rs 175, Rs 300 and Rs 385.

Industry experts feel that ‘bashing’ of telecom stocks on the basis of tariff wars is highly overdone. Gutsy traders can attempt buying in telecom counters Bharti, Reliance Communication, and Idea for short term ‘relief’ gains.
Metal stocks have been moving up on reports of weak dollar and expectations of higher demand.

However, valuations are stretched for near term view, avoid fresh exposure and book partial profits. Fears of rupee strength are again haunting IT stocks. Use sharp declines to buy and avoid aggressive shorts for present. Realty counters are attracting buyers at lower levels. Stay invested for further gains. Sugar, power, capital goods and pharma are likely to witness renewed buying interest.

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.com

Market Khabar 21 Sept 09

Buoyed by firm global cues and encouraging reports indicating revival in the economy markets improved to 16-month highs during the week ended.

On the Bombay Stock Exchange, the Sensex gained 477 points closing in the vicinity of 17,000 at 16,741 and the Nifty on the National Stock Exchange ended 146 points higher at 4,976. Market breadth was not positive on all days reflecting abundant caution at higher levels. It is interesting to note that for once while FIIs are on buying spree, domestic institutions were in profit booking mode.

Inflation turned positive signaling that era of cheap credit may be over in near term and triggering rally in banking counters. However, signals from the Reserve Bank of India and the finance minister not to hike interest rates and not to roll back stimulus measures till the economic recovery is on a strong footing kept the sentiment positive.

Advance tax numbers suggest good quarter two performance from companies. Expectations for a broad earnings recovery could prove disappointing and that could create more volatility in October. Key events to watch for in the coming week are F&O settlement and US Fed Meet musings. For the week ahead chartists predict trading range of 16,400-17,180 for the Sensex and 4,840-5,180 for the Nifty.

Supports for the week would be at 16,560 and 15,380 and 4,920 and 4,840. Expect resistance to indices at 16,960 and 17,180 and 5,050 and 5,160.

Be bearish only below 16,300 or 4,850 levels in indices on closing basis. Sharp selling not ruled out at psychological level of 17,000. Short term traders can stay on long side if Nifty trades steadily above 5,000 level.

SATTA GUPSHUP

* Renewed interest was se-en in many footwear stocks on expectations of sharp improvement in exports and festive sales. Relaxo Footw-ears is one of the largest manufacturers of hawai slippers. Competing with Chinese manufacturers, it bagg-ed large orders from the global retailing giants Tesco and Wal-Mart. Excellent Q1 results and book value of Rs 62 make the stock good buy for steady gains in medium term. Buy on declines for a target price of Rs 175.

* Jupiter Biosciences is the only company in the world to have integrated model from raw materials to finished dosage form in ‘peptides’ and has manufacturing presence for peptides in Europe and the US. It is reportedly doing placement at hefty premium to current price and also unlocking value of subsidiaries. Low market cap makes Jupiter vulnerable for a takeover bid. It may be recalled that Ranbaxy earlier had a ‘look’ at the company. Recent Biocon-Amilyn tie up and Neuland Labs foray into peptides has put this pharmaceutical segment in limelight. High B.V. of Rs 203 makes the stock good bet at current levels for target price of Rs 150.

* Hatsun Agro Products and Heritage Foods are dairy majors. Hatsun has developed unique model of ‘contract’ farmers for captive source of milk supply. Heritage has launched many private labels from jams to mineral water to leverage its brand value. Buy Hatsun Agro and Heritage for Rs 150 and Rs 250.

F & O

Mirroring the strong bullish undercurrent volumes were robust in the derivatives segment and open interest increased sharply to Rs 11,8000 crore. Signs of irrational exuberance are beginning to show up.
Sharp rise in Nifty OI PCR to 1.73 on the back of put writing at 4800 and 4900 levels indicates that short sellers are trapped for the moment. Sharp short covering rally not ruled out. VIX has fallen sharply to 26 indicating confidence of the market players over the ongoing rally. Among the sectors that witnessed long build up are auto, banking, cement and metal. Expectations over good festival sales pushed auto counters into fast track mode. Stay on plus side and add on declines. Led by SBI, state owned banks vaulted to new highs. Momentum is on the side of the sector. Buy on declines for further gains.

True to predictions correction in cement counters was short lived. Selective buying suggested for outperformance returns. Among the stock futures long build up was seen in BEL, GE Shipping, GMR Infra, Mphasis, Nagarjuna Construction, JP Associates, Ispat Inds, Reliance Power, Divi Labs, Suzlon, IFCI, Unitech and IBRL. Sharp rally indicated in realty counters DLF, Unitech and Indiabulls Real for target prices of Rs475, Rs130 and Rs300.

Expectedly Orchid hogged limelight. Buy on declines to Rs150 for target price of Rs200 in next few weeks. Ahead of Q2 results season IT stocks are again witnessing good accumulation. Spurt in Rolta, Mastek, Moser Baer, HCL Tech and TechMahindra not ruled out. Stock specific movement to continue till the onset of Q2 results season. Focus more on midcaps than frontline counters.

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.com

Market Khabar 17 August 2009

Markets continued their uptrend during the week ended on the back of promising industrial growth data, the draft of new Direct Tax Code and the Free Trade Agreement with Asean.
On the Bombay Stock Exchange (BSE), the Sensex added 251 points to close at 15,412 and the Nifty on the National Stock Exchange (NSE) logged 100 points ending at 4,580.
Heightened action was seen midcap and smallcap counters. Sluggish trading volumes were attributed to jitters over the spread of H1N1 virus and fears over impact of below normal monsoon on the economy.
The statement of Federal Reserve on the state of United States economy and the reports of France, Germany and Israel coming out of recession have infused optimism in the world markets.
The near-term direction of the markets will depend on the revival of monsoon and global cues. The Chinese markets will continue to be a cause of concern for the investors.
Policy announcements by the central government on its economic agenda likely to help markets consolidate their recent gains till the start of second quarter results season.
For the week ahead, chartists predict a trading band of 14,800 and 15,940 for the Sensex and 4,330 and 4,700 for the Nifty. Immediate supports for the Sensex are between 15,160 and 14,800 and for the Nifty are between 4,480 and 4,390.
Expect resistance on upside between 15,620 and 15,940 for the Sensex and between 4,640 and 4,730 for the Nifty.
Investors can be bullish above 4,700 and likewise be bearish below 4,400 on closing basis.
Avoid large positions and trade lightly till the indices break out of the current trading range.

SATTA GUPSHUP
* Tera Software is a unique e-governance firm with pro-ven capabilities. It has a good order book, which is expected to increase due to rise in government’s spending on e-governance. It has steady dividend yield and is good buy at current levels for a target price of Rs 80.

* Kiri Dyes and Chemicals, a manufacturer of reactive dyes, has commissioned its new venture at Vadodra in alliance with Chinese major Longsheng. Kiri Dyes is one of the very few certified and accredited contract supplier to the world’s top five dye-stuff majors. Buy at current levels for target price of Rs 500 in medium term.

* Amara Raja Batteries has reported excellent first quarter results. The firm manufactures specialised batteries for the telecom sector and railways and has reportedly developed batteries for hybrid cars. Buy at current levels for steady returns.

* Indraprastha Gas Ltd, a JV of GAIL, BPCL and the Delhi government, has excl-usivity for city gas distribution network for the National Capital Region. It has recently tied up with RIL for augmenting its needs and expanding its network. Buy on decline for target price of Rs 250 in next few weeks.

* Linc Pens is aiming to be among the top two pen manufacturers in the country in 2009-10. Buy on declines for target price of Rs 60 in medium term.

F & O
Volumes were a tad lower in the derivatives segment on the lack of confidence among the market players over the near term direction of markets.
Sharp swings on alternate bouts of buying and selling kept traders on the edge. Nifty futures were seen trading at a discount to spot at the end of the week. Adopt strangle strategy for Nifty options to take advantage of directional change.
FII positions as percentage of gross positions has declined sharply reflecting their bias to sell. Metals, realty and oil and gas counters witnessed a good buying interest. Tata Steel, Sterlite, JSPL, HDIL, Unitech, Cairn and BPCL look good for further gains from current levels.
Auto and cement counters are attracting profit booking at higher levels. Avoid auto stocks for now. Rebound in cement counters indicated. Buy India Cements at current levels for a target price of Rs 160.

Correction in sugar stocks likely to be short lived. Availability of cane makes Shree Renuka a good bet for further gains. Range bound trading seen in banking cou-nters. Use sharp declines to accumulate private banks. Buying suggested in LIC Hsg and Reliance Capital. Punters tip Jindal Steel & Power and Financial Technologies for short term targets of Rs 3,600 and Rs 1,800. Among the second-tier IT counters, Firstsource, Polaris, Rolta and Mphasis may touch Rs 38, Rs 155, Rs 190 and Rs 575 in next few weeks.

Courtesy swine flu, pharma counters are witnessing volume and price action in both cash and derivative segments. Buy on declines Ranbaxy, Dr Reddy and Aurobindo. News driven activity indicated in Cipla and Orchid.

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.com

Sectoral Analysis and Outlook for this week !

Weekly Sectoral review

BSE sensex gained 321 pnts during the week. Monday it lost 196 pts while it gained 419 pnts on Friday Outlook Bullilsh. Nifty gained 62 pts while it has jumped sharply on friday by 134 pts it had a bad Monday 22 June it tanked 78 pts, Thursday it lost 51 pts. The outlook ahead of Union Budget 2009-2010 is bullish and buy on dips could give better returns for investors.

Power index was up 2.37% and the outlook remains positive use dips to accumulate - GVK Power Torrent Power, Reliance for an upside of 25-30%

Realty index was up 3% on expectation of budget sops for home buyers. The raising of threshold limit of income tax relief expected 3 lakhs

On the back of dis-investment PSU index had a mixed week up by 1.84% look out to buy BEML and BHEL on dips for an upside of 15-20% in July

Oil Gas had a bad last week recovered backed by Reliance Industries. The outlook remains cautious on the back of international crude prices

After the sell off seen in the metal index recovered somewhat by 2.69% Tread with caution as the outlook is not very positive sell on rises

IT index ended smartly up 3.64% on back of good turn around expected from the US recovery. Watch out for guidance and invest in small lots

Healthcare index was down 1.49% on back of Sun pharma downfall. Accumulate mid cap stocks like dishman and divis for targets of 250 and 1500

FMCG index too had a insipid week and rose by mere 1% the delayed monsoon will be a cause for worry avoid investing in the short term

Consumer durable industry has posted a mere .35% rise and one can avoid this sector as it is likely to under perform the overall indices

Capital Goods index risen sharply 6% on the back of robust demand growth. Buy on dips both ABB and Siemen for target prices of 1000 and 750

Bankex recovered smartly during the week gaining 2.69% during the week. Buy on dips ICICI and UTI banks. Buy Yes bank, idbi target 150 125

Auto sector was biggest loser during the week - it lost 1.08% the strategy should be sell on rise both Mahindra 725 and Tata Motors at 370

Take advantage of dips which are expected next week and accumulate todays winners at lower levels. They will lead the next leg of rally

Trading for the July FnO started on a bullish note with sensex and nifty gaining 3% The outlook for the next week should be continued buying

Highlight of todays trading is that all the sectors except Healthcare all sectoral indices went up.Sun Pharma dragged HC index by losing 12%

ICICI bank surged by 8% during the day to close at high price of today at 754 Buy on dips around 700 for a target of 800

The biggest driver of todays market has been the banking sector which after a period of consolidation flared up by 4.37% outlook is positive

Bse Auto index was up 1.2% today with gainers Maruti, Bajaj auto Buy Tata Motors at 325 for a target of 365 for next week.

Outlook for next week

With initiative seized from bears Bulls will have strangle hold next - try to push the indices higher - target for Sensex 15000 Nifty 4500

Raghav
Chief Investment Officer

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Market Khabar 15th June 2009

Despite losing some steam, markets "managed" to post gains for 14th straight
week. On the Bombay Stock Exchange, the Sensex gained 134 points closing at
15,238 and the Nifty on the National Stock Exchange ended flat at 4,583.
However, selling pressure in the broader market was visible in the fall of BSE
Midcap and Smallcap indices by over 3.2 per cent and 6.9 per cent.

You can observe that while benchmark indices are in "green", many stocks are in
"red" with corrections of over 10 per cent. Despite positive IIP numbers raising
expectations on growth, higher international crude oil prices, uncertain monsoon
"path", and a rally in commodity prices warrant caution on the growth front.

Lack of a follow-up buying and "caution" ahead of the Union Budget may see
markets trudging sideways for next fortnight.

Weekend results of the Iran elections and North Korea's nuclear threat may have
limited impact on global markets. Markets have rallied for more than three
months straight and look ripe for a big pullback in near term.

For the week ahead, chartists predict a trading band of 14,600 and 15,600 for
the Sensex and 4,350 and 4,750 for the Nifty. Expect resistance to the indices
at 15,490 and 15,700 and 4,680 and 4,790.
Immediate supports for the indices are at 14,880 and 14,540 for the Sensex and
4,460 and 4,340 for the Nifty.

Trim long positions if indices hover below 15,000 and 4,500. Never assume a
market fact based on what you read or what others say, verify everything
yourselves. To succeed in the markets, it is essential to make your own
decisions.

F & O

Volumes were relatively lower in the derivatives segment during the week ended
reflecting "tiredness". Sentiment indicators such as open interest, put/call
ratio, implied volatility and VIX indicate sideways movement in near term with
intermittent bouts of high volatility. With "visible" signs of profit booking at
higher levels, savvy market players advise extreme caution for short-term
traders.

Metal stocks surged on the reports of bullish LME prices. Use sharp corrective
moves to accumulate. Weakness in bank counters will be short lived say punters.
Auto counters may continue to attract selling at higher levels. Trade
cautiously. After initial gains on the reports of extension of tax sops, IT
stocks have attracted selling at higher levels. Use declines to buy ahead of Q1
results. Buy TCS, HCL Tech, OFSS and Rolta for short term.

Among the stock futures showing relative strength are JSW Steel, Jindal Steel &
Power (included in Nifty), Noida Toll, Maha Seamless, Union Bank, Hindustan
Zinc, IFCI, Voltas, RCom, Nalco and Wockhardt. Targets for near term are Rs 825,
Rs 2800, Rs 55, Rs 350, Rs 250, Rs 750, Rs 65, Rs 160, Rs 375, Rs 410 and Rs
175.

SATTA GUPSHUP

* Laffans Petrochemicals Ltd has signed technology transfer agreement with
Huntsman Corporation for producing specialty chemicals like non-ionic
surfactants, glycol ethers and amines for wide range of markets-agrochemicals,
personal care, oil gas and automotive brake fluids. Book value of Rs 53 and EPS
of Rs 7.5 makes the stock good bet for a price target of Rs 50 in the medium
term.

* Infrastructure equipment financing company SREI Infra has two "valuable"
subsidiaries — offshore oil services firm Quippo Oil and Gas and telecom tower
services firm Quippo Telecom Infrastructure. The value of the subsidiaries is
reportedly over Rs 5,000 crore while market cap of SREI is just Rs 780 crore.
Blip in Q4 results is attributed to conscious decision of company to go slow in
disbursements. Good buy at current levels for price target of Rs 150 in medium
term.

* DCM Shriram Consolidated is a diversified company with a turnover of over Rs
3,000 crore with primary business interests in sugar, fertilisers, hybrid seeds,
chemicals, building systems, cement and rural business centres (Hariyali Kisaan
Bazaars). Completion of expansion in chemicals division and setting up of
cogeneration power plant were visible in the turnaround performance in the
current year. Buy on declines for target price of Rs 125 in medium term.

* Renewed interest seen in tyre and tea sectors. Volumes indicate further gains
in Apollo Tyres and Ceat. From the tea pack Jayashree Tea, Warren Tea, Goodricke
and Harrison Malayalam look good for investment. Use declines to buy for the
medium term.

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.com

Market Khabar 8th June 2009

Markets may cool down before Budget

June 8th, 2009
By C. Kutumba Rao

on the rise for a 13th consecutive week, the benchmark indices recorded the longest winning streak since August 2005. On the Bombay Stock Exchange (BSE), the Sensex ended at 15,103, adding 478 points, or 3.27 per cent and the broader Nifty on the NSE advanced 138 points, or 3.1 per cent to 4,587.
CNX Midcap and BSE Smallcap indices gained 6.2 per cent and 7.9 per cent reflecting “exuberance” of retail investors. The President, Mrs Prathiba Patil’s speech to Parliament indicating that the government will focus on reforms in financial and infrastructure sectors and selective disinvestment of PSUs provided the necessary “fodder” for tired bulls to extend the rally. Though there are no tell tale signs of correction, overheated markets may ‘cool’ before the end of settlement and the Budget, say savvy analysts.

Barring any negative news flow on economic front and global cues, markets may witness stock specific activity and “rotation” of sectors from momentum traders in the near-term. For the week ahead, chartists predict a trading band of 14,700-15,600 for the Sensex and 4,380-4,760 for the Nifty. Resistances for the week would be at 15,290 and 15,540 and 4,645 and 4,760. On downside, expect supports for the indices at 14,820 and 14,590 and 4,480 and 4,360.

Avoid short-term logs, if indices trade below the first supports. Markets change continuously and so must traders and investors. What worked last year, last month, or even last week may very well not work today. Be flexible, do not overstay in a market or try to cherry-pick the top or bottom. Do not let your greed get the better of your judgement.

source : deccan.com

Market Outlook for 20-24 April 2009

Index Outlook

Sensex (11023.1)

Indian stock market juggernaut rolled on to a sixth consecutive positive weekly close. Neither disturbing guidance from Infosys nor the cacophony of the Lok Sabha elections deterred its progress.

It promises to be an action-packed week ahead with the monetary policy review, corporate earnings and IPL matches vying for investors’ attention.

Though the large-cap stocks appeared a trifle hesitant in last week’s trade; stellar moves made by mid and small cap stocks ensured that investors had nothing to complain about. Volumes soared through the roof. Average volume in NSE cash segment was Rs 18700 crore last week.

Volumes in NSE derivative segment averaged Rs 75000 crore in the last three sessions. Last time such volumes were witnessed was in the last quarter of 2007.

Open interest has leapt to Rs 86000 crore, implying that leveraged trading is back in vogue. FIIs doggedly remained net buyers, even on days when the markets corrected; taking their tally of net inflows for April to $730 billion.

Oscillators in the daily chart are still featuring in the overbought region. But such indicators become ineffective in strong trending market where they can stay overbought for considerable length of time. Weekly oscillators are beginning to move in to bullish region.

However, the index is currently grappling with the strong resistance offered by the 200-day moving average. High volumes witnessed over the last three sessions too suggest that the bulls and bears are battling it out for supremacy around the long-term moving average.

It needs to be borne in mind that since this is a long-term indicator, we need to wait for the index to sustain above this line for at least a couple of weeks before we can conclude that the long-term trend has reversed.

Immediate targets for the move from 8047 low are 11305 and 11600. Sensex achieved the first target and is whipsawing violently since then.

Investors ought to be cautious if the index continues to struggle to move beyond 11300, since that would imply that a terminal corrective is being formed that can be followed by a decline to 10000 or even 9500. Rally above 11600 will take the Sensex to the next resistance zone around 11800.

The short as well as medium term trend is currently up and prudence dictates that it is best to flow with the trend till we get confirmation that the trend has reversed. Supports for the week ahead are 10650 and 10230. Short-term investors can buy in declines as long as the first support holds. Upper targets for the week would be 11367, 11640 and 11820.

Nifty (3384.4)

Nifty made an attempt to climb above 3500 before a mild correction set in. It is difficult to determine if the movement over the last three sessions is a terminal corrective or a running correction. According to both the counts, sharp moves can be expected in the week ahead. As explained before, if the move from the 2539 low is the B wave of a long-term bear market, its first targets would lie in the zone between 3480 and 3680.

Since Nifty is already at this zone, it would do to stay extra vigilant.

The short-term trend however continues to be up and traders can buy in declines as long as the index holds above 3300. A firm close below 3100 is needed to indicate that the medium-term trend is reversing lower. Upper targets for the week are 3550 and 3684.

Global Cues

Equities put up a strong show last week. Stock markets in Brazil and Argentina continued their uptrend and made fresh highs for 2009, European markets too rallied strongly. DJ Euro STOXX 50 closed 4 per cent higher last week. Jakarta Composite Index was the out-performer with11 per cent weekly gain.

Action on the Dow was however muted, the index closed with less than 1 per cent gain. It is yet to gather sufficient momentum to break above the resistance at 8100. As explained before target above this level is 8800 and 9100.

 — Lokeshwarri S.K.

Businessline 19-04-09