DAILY REPORT FOR 18 JUNE, 2008
NIFTY (4653 +81 pts)
Supp 4620/4560/4520 Res 4680/4740/4800
After giving almost a triple century from low level of 4370, Nifty is up against good resistance at 4680-4700. A correction that starts from here should be considered as worth buying only until we are above 4520-4560 levels. Fall below these levels will indicate more weakness.
SENSEX (15696 +301 pts)
Supp 15580/15450/15300 Res 15800/15970/16090
Review of the previous session:-
It was a very strong session as far as gains were concerned. Rally was built up slowly after initial hiccups. Banks and Real estate stocks were major gainers. The soothing fact for bulls was that FIIs turned net buyers yesterday (provisionally).
BSE Breadth 1784 Adv-880 Dec NSE Breadth 846 Adv-321 Dec Upper Circuit - 288 Lower Circuit – 90
BSE Vol Rs 5337 Cr NSE Vol Rs 10991 Cr F&O NSE Vol Rs 42624 Cr
FIIs bought Rs 142 Cr in cash market and MFs bought 420 Cr. In F&O, FIIs bought Index Futures worth Rs 677 Cr and sold Stock Futures worth Rs 49 Cr. Their Outstanding position in Futures is 42429 Cr and Options is 23016 Cr.
Additional Data:- Gold $886.90/oz Nymex Crude $134.01/bbl
F&O observations:-
Bullish build-up –Sasken, UniPhos, IOB, Neyveli, Divi, Zee Enter, Educomp, RelCap, RelInfra, Essar Oil, Yes Bank, BomDyeing, Andhra Bank, Ranbaxy, NTPC
Bearish build-up – Amtek Auto, CAIRN, Rolta
OI 85877 Cr (+4474 Cr) Nifty OI up 3% PCR 1.54 (from 1.60)
Bank rally was fantastic yesterday but mostly it was short-covering and if selling starts again, we may see some downside in those stocks. So one should have a cautious view in banks at higher levels.
Outlook for 18 June, 2008:-
A negative opening is not ruled out but Nifty may take support around 4620. Bounce from there can again take us towards 4660-4680.
Current government has failed on inflation front and they will really want to make some concrete reform before putting the papers down. One such possibility is Nuke Deal which is getting shelved all the time. We have to see if it really happens but stocks like BHEL, L&T and APIL should be watched.
Ideas for Trading (for short-term position):-
Glenmark (702):- The stock has broken out and one can buy with SL of 665 for target of 750 and above. Ideal buy is around 685-690.
Catch them falling (Ideas for Investment):-
Alembic (53.25):- (http://www.alembic-india.com/)
Alembic Pharma is one of the oldest (more than 100 years) pharmaceutical companies in India. They manufacture pharmaceuticals and chemicals, bulk drugs and penicillin with presence in over 75 countries globally. Alembic is a fully integrated player in Anti-infective segment which is the largest segment for this company accounting for over 60% of sales. In this segment company's sales is growing at higher pace compared to industry rate. Company manufactures - bulk drugs, formulations with 4- Brands falling under top selling 300 pharma brands. Company has OTC brands like - Glycodin & Zero, in cough and sugar free sweetner segments. To capitalise on the growing opportunity in CRAMS, the company has set up a state-of-the-art research centre, BioArc, at Vadodra. The CRAMS segment is expected to scale-up significantly over the next two years contributing 10% of the company's overall sales. Alembic has free land of around 50 acres at Vadodara, which it expects to monetize over a period of time.
It has posted strong numbers for FY08. Net profit for the year ended March 31, 2008 rose by 57.7 per cent to Rs 112 crore and net sales rose by 42% to Rs 1,027 crore. The stock trades around 6 times its FY10 forward EPS which is low comparing its recent past valuations, which should give some margin of safety to investors. It looks cheap comparing peers and the long track record of the company. One should accumulate the stock for 20-25% return on investment. (Source: company website and research reports)
Disclaimer: These recommendations are based on the theory of technical analysis and personal observations. This does not claim for profit. I am not responsible for any losses made by traders. It is only the outlook of the market with reference to its previous performance. You are advised to take your position with your sense and judgment. I am trying to consider the fundamental validity of stocks as far as possible, but demand and supply affects it with vision variations.
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