Weekly Nifty Update 27 March, 2010 by Tanmay G Purohit

Nifty has closed positive (+20 points) at 5282 positive close 7^th week in a row and 7week rally has been highest after October 2007 8week rally and in March2009 we had 7week rally after seeing a low of 2500. Nifty has closed @ highest level in 111 weeks and now 5310 highest point in 2years formed in January 2010 can be important resistance above which 5368 & 5500 can be possible targets.  FIIs have made a net investment of Rs.15881Cr for month of March till 25March, taking their total inflow to Rs 17692 crore so far this year. Midcap & Small cap stocks have given negative returns in the week that ended with Adv-483 Vs Dec-874 (on NSE) and 1067-1908 (on BSE). The breadth has deteriorated through the week in spite of indices being positive and it can be an indication of probable reversal in near future.

NMDC tumbled 16.86% to 298.30 and stock fell below its recently concluded follow-on-public offer (FPO) price of Rs 300 per share. HDFC BANK rose 7% as the stock moved into All Time High territory. RPOWER, PNB, SUNPHARMA, HUL rose more than 4% each. REALTY stocks were main losers after RBI raised interest rates – DLF -5%, UNITECH -3.8%.

US Healthcare Bill was passed and Pharmaceutical stocks have gained shown by BSE HEALTHCARE INDEX which rose 2.59% this week. JUBILANT, DISHMAN, DIVIS look good from CRAMS sector. CIPLA will replace its peer SUN PHARMA on the Bombay Stock Exchange’s benchmark Sensex from May 3.

RBI came out with its Financial Stability Report and it has said Economic slowdown can have a lagged effect on Credit Growth and Profitability of banks. Going by many statements, RBI has indicated more tightening ahead and it may happen at next month Policy Meeting as well which can  keep AUTO, REALTY  and BANKING stocks under check in near future.

There were major sovereign risks as Dubai, Greece and Portugal were downgraded; now Dubai Government has said they would help the indebted companies and Greece got bailout package from the EU which makes these worries recede for some time. But any correction from here would be event-based and it can be overnight also, so regular profit-taking is advisable for short-term players.

Stocks looking good: IFCI, EKC, SUNTV, MRPL, ONMOBILE

Supp 5200/5090/4985 Res 5325/5390/5510

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Weekly Nifty Update 20 March, 2010 by Tanmay G Purohit

Nifty has closed positive (+125 points) at 5262 positive close 6^th week in a row and Nifty has broken out above 5150 this week which has given a strong closing for the index. Nifty January high at 5310 is the highest point in last 24 months and once above that rally would strengthen more but failing to crossover would be a sign of caution for longs. Weekly graph shows a channel formation and above 5320 a move towards 5400-5425 is not ruled out. Nifty has to maintain 5170-5200 levels to remain strong this week and below 5100 major weakness is expected. This is expiry week as March-2010 contracts would get squared off Thursday and if Nifty touches around 5400 this week a reaction from there looks probable so caution is advised at higher levels.

Stock Performance: - It was a week of TELECOM stocks where IDEA rose 14%, RCOM 6.6% and BHARTI AIRTEL 4.2%. RELIANCE IND, the biggest heavyweight contributed to the fullest as it rose nearly 7% this week and nears important resistance at Rs 1100 above which the stock may become stronger for higher levels. METALS followed TELECOM as TATA STEEL, SAIL and HINDALCO gained more than 5% each.

Advance Tax Numbers: - Q4 Advance Tax numbers were released this week and it indicated higher taxes from many companies, BANKING companies lagged in those numbers but SBI was top tax-payer overall; RELIANCE, TCS, MRPL and INFOSYS showed good numbers.

RBI Rate Hike: - WPI touched 9.89% in Feb and Food Inflation at 16.3% has made RBI surprise markets with sudden repo and reverse repo rate hike on Friday evening by 25bps. Many expected the rise to happen in April annual policy meeting but this can have a negative reaction for banking stocks and REALTY, AUTO can also be impacted. Market is not ready to move higher for the last 3 sessions and if it continues the fall may materialize once again and this time the correction can be bigger also. Stock-specific approach is only advisable. Around 1,800 companies on the Bombay Stock Exchange (BSE) are trading at or near their 52-week highs but large caps are failing to perform so caution is warranted at current levels.

Stocks Looking Good: JUBILANT, AREVA, BIOCON

Weak stocks: KOTAK BANK, ACC, LIC HSG, M&M, MARUTI,

Supp 5205/5110/5030 Res 5320/5425/5500

Around 1,800 companies at or near 52-week highs http://tinyurl.com/yl22doc

BRIC rally slows amid highest valuations http://tinyurl.com/ygsjcn8

RBI raises repo, reverse repo http://tinyurl.com/ylqnpxb

ONMOBILE Rs 392 Buy for targets above Rs 450 in short-term - Tanmay G Purohit

About ONMOBILE:-
http://www.onmobile.com/

• OnMobile is one of the largest white labeled Data and Value Added Services [VAS] companies for Mobile, Landline and Media Service Providers. OnMobile’s 360° approach offers the entire product line across all mobile access channels like Voice, SMS, WAP, USSD, On-Device Portal & Web. The current product suite includes Ringback Tones 2.0,Voice, Wap, Sms, Ussd Portals, On-Device Portal & Handset Clients, Mobile Marketing, Media Portals & Interactive Tv, 3G Applications & Vas, Say & Search, Phone Backup, Phonebook 2.0 & Anti-Theft.
• Call rates are down to 1 paisa per second and now Telcos may concentrate more on Value Added Services (VAS) to increase margins, ONMOBILE is an experienced player in VAS segment.
• 3G Auction is scheduled to begin on April 9th and already top Telcos have submitted their bids. ONMOBILE's presence in 3G application space would benefit immensely after 3G connectivity starts.
• Mobile phone market has exploded with entry of new players like KARBONN, LAVA, INQ, LEMON and many more which are flooding the market with cheaper choices and make mobile handsets more affordable for those who can't buy expensive handsets. This would improve demand for softwares such as Anti-Theft and Backup.

Technical View:-
The stock has consolidated between 415 and 357 for the last one month and a breakout above Rs 410 would take it higher towards Rs 450/490 also. Buy as investment.

Weekly Nifty Update 12 March, 2010 by Tanmay G Purohit

Nifty has closed positive (+48 points) at 5137 positive close 5^th week in a row and its biggest stretch of weekly gains since June last year, but closed flat on Friday as market players booked profit before weekend. Nifty was constricted between a very narrow range this week as it hit 5092 to start the week and it could go up to only 5158 on Friday which gives a weekly range of just 66 points which is narrowest in nearly 10 weeks. It indicates indecision at current levels and volumes have dropped to very low levels which gives suspicion about the uptrend. AMBUJA CEM, M&M, ABB, ITC gained more than 5% each making them top gainers in Nifty whereas HIND UNILEVER fell nearly 10% in this week as the company was hurt by pricing war in detergent segment. SUZLON, RCOM and UNITECH were other losers.

IIP data :- Industrial output in India continued to grow at a fast pace; Output at India's factories and mines rose 16.7% from a year earlier in January, slower than a revised 17.6% expansion in December, government data issued Friday showed.

Nifty has to cross 5200 decisively with volumes to show strength and then 5310 is 52-week high hit in January which has to be crossed. Only one sign has been on the side of bulls and that has been the long series of rising tops and bottoms, any sustained move below 5090 and the trend may get broken. 5000 Put has been very active and normally this would provide good support in deep correction intraday so cutting this level would mean downtrend can resume. Major Index being in such a small range indicates a big move in days to come and direction would be known by breakout but caution is advised at current levels. Investors can accumulate good stocks as correction would be an opportunity to buy but short-term players and traders may find it difficult as stocks are not moving even 2-3% intraday.

Advance Tax numbers for Q4 would start soon early next week and those would be closely watched as that can dictate further trend for the market. This market is becoming very stock-specific but being light is advisable as such a narrow range normally would give a move of 8-10% on index also.

Stocks Looking Good:

Value: AIA ENG, APIL, ABB

Technically Strong: BRFL, ANANTRAJ

Supp 5080/5000/4925 Res 5187/5250/5360

Tata Steel hit by Orissa Govt's blanket mining ban order

Ore loading stopped at Joda East mines.

The Orissa Government's order banning what it feels “illegal” mining by private companies in the State's iron ore-rich Banspani / Jarauli areas has proved too much for Tata Steel.
The order, also promulgating Sec 144 Cr PC, has stopped iron ore loading at the company's Joda East mines, with the result iron movement from the mines to the Jamshedpur plant has remained suspended for the past few days. If the present situation continues, the production at the Jamshedpur plant will be hit, according to company sources.
Tata Steel's Joda East mines on an average load four rakes of iron ore a day, accounting for 40 per cent of the Jamshedpur plant's daily requirement of 10 rakes. An attempt has been made to step up loading at neighbouring Noamundi mines also belonging to the Tata Steel. But the increased loading at Noamundi, it is felt, will not be enough to cover the shortfall. “After all, it is not a switch-on/switch-off kind of thing,” observe sources.
What is particularly causing concern is the not-so-comfortable iron ore stock at the plant. For about a month now, the South Eastern Railway (SER), for whatever reasons, loaded less iron ore to a rake – 3,600 tonnes on an average against the earlier 4,400 tonnes. As a result, the same number of rakes, though moved into the plant, carried much less quantity.
SER had promised to clear the backlog but the promise, it appears, is unlikely to materialise as SER's own loading in Banspani /Jarauli areas too has been hit.
“There is nothing illegal about our mining at Joda East, as the mines are our own, siding is our own and we produce entirely for our captive consumption and we're open to all inspection and verification by any government agency,” says Tata Steel sources.
“But the problem is that those who implement government orders do not differentiate between chalk and cheese”.
Tata Steel, it was informed, had already taken up the matter with the appropriate authorities at every level, both at the Centre and Orissa, but with little success so far.
However, senior officials at the Mines Ministry said they were not aware of the issue and that the Tatas have not approached them as yet.
Meanwhile, the Orissa Government's order has also hit hard SER, which loads eight to 10 rakes of ore every day at Banspani and Jarauli.
“We're trying to make up the shortfall by stepping up loading at other locations such as Barbil, Barajamda and a few other places but the present situation, if persists, will affect our throughput,” a spokesman of SER told Business Line.
Iron ore is the single largest item of traffic for SER, accounting for 65 per cent of the total. Till February, SER loaded 70.26 million tonnes of iron ore out of the total traffic of 115.34 mt.
(Source: Business Line) http://www.thehindubusinessline.com/2010/03/11/stories/2010031153700100.htm

Weekly Nifty Update 07 March, 2010 by Tanmay G Purohit

Nifty has closed positive (+166 points) at 5088 positive close 4^th week in a row and biggest weekly gain in 2010, crossing major resistance of 5070 which is 61.8% correction of high of 2010 (5310) to low of 2010 (4675).  Nifty can go towards 5205-5240 if it can sustain 5020 this week on a sustainable basis, post Budget rally this is the 2^nd time in last 10 budgets and as many didn’t have any expectation on the budget no negative has become positive and government holding on to its stand on petrol & diesel price hike has given hope that government is serious about reforms very positive going forward. FIIs have made a net investment of Rs 4,334 crore in the first week of March, taking their total inflow to Rs 5,051 crore or USD 1.11 billion so far this year. Investors brace up for three public offerings this week, NMDC -- the country's largest iron ore producer -- is coming out with its FPO of over 33 crore shares or 8.38% stake. The issue opens on March 10 and closes on March 12. DQ Entertainment (International) Ltd opens today Another IPO from textile manufacturer Pradip Overseas will open on March 11. BALTIC DRY INDEX which indicates global freight movement has risen 3.9% yesterday to close @3242 and it has risen more than 24% from its lows around 2566 seen in mid-February. Shipping stocks has seen some rally and Shipping Corporation can be good pick @ these levels for 5-6% rally 

IIP data on 12-March & advance tax would be keenly watched:

PRAKASHIND, HCC, AIAENG, AREVEDAT&D, ONMOBILE, GSPL, GUJNRECOKE, JUBILANT, ADHUNIK, BHARTISHIPYARD, ABGSHIPYARD,

Supp 5020/4960/4885 Res 5130/5190/5260

Update on GUJ NRE COKE:
The stock has taken support around Rs 66 in recent market correction and now it is forming Inverse Head & Shoulders formation. Above Rs 79 the stock would break out and we can see Rs 87-89 as short-term target on this stock. The stock has started trading above all major moving averages which is one more sign of strength.
Previous posting on GUJ NRE COKE:- http://tanmaygopal.blogspot.com/2010/01/coal-black-diamond-india-is-3rd-largest.html
http://tanmaygopal.blogspot.com/2010/02/update-on-coal-and-guj-nre-coke-we-had.html