Sunday, September 26, 2010

Weekly Nifty Update 25 Sept, 2010 by Tanmay G Purohit

Nifty has closed the week higher for 4th consecutive week by 133 points at 6018 and this is first time after 11 Jan 2008 that Nifty has closed the week above 6000. Longest stretch of weekly up closings this year was Feb'10 through Apr'10 where 9 consecutive weeks Nifty inched up when it rose 15% but current rally is very sharp as in these 4 weeks only nearly 13% rise has been witnessed. Gains this week were clearly led by FMCG stocks as BSE FMCG index rose more than 5% in last 5 sessions. HIND UNILVR was top gainer in Nifty with 11% gains followed by HDFC, RANBAXY, HERO HONDA, MARUTI, IDFC, ITC and WIPRO which rose more than 6% each. FINANTECH lost 13% this week as SEBI denied permission for MCX-SX, in Nifty CAIRN was top loser with 3.8% loss.
Foreign institutional investors (FIIs) have poured in over $2.67 billion in September alone, fuelling the rise of Indian stock markets. Till Sep 17, FIIs had invested over $2.64 in the markets and picked up $39.67 million worth of new securities, according to data available with the Securities and Exchange Board of India (SEBI). Rupee is becoming stronger due to high FIIs inflow and strong Rupee benefits Importers and Oil Companies HPCL, BPCL, IOC, MRPL, ESSAROIL benefit, any fall in global crude prices would add to benefits of these companies.
Ratings agency Crisil said it will buy US-based knowledge process outsourcing firm Pipal Research Corporation for $12.75 million and at present, FSL holds the majority stake in Pipal which will boost valuations of FSL forward and stock can target Rs 32-33 in short-term. On index basis, SBI and FMCG stocks look very strong to add to gains but RELIANCE and INFOSYS hold the key for short-term trend as these stocks can pressurize if they correct.
Technical View:
Nifty 6357 is all time high and that would be only important resistance to be crossed now. Euphoria is slowly building up in markets but so far only FIIs have been providing big liquidity with MFs remaining sustained sellers. Nifty as long as maintains 5900 correction would be hard to come in this settlement and if rally continues above 6000 we may get very close to all time highs very soon. Whenever Index cuts low of previous 5 days then correction may start in a big way now 5880 below only will trigger correction. As market rise is steep correction can be steeper so book regular profits and be stock-specific as gains in individual stocks are high.
Support-5950/5880/5790 Resistance-6060/6180/6300
Stocks looking good: FSL, ONMOBILE, INDIA CEM, NHPC, NTPC
Stocks looking weak: STER, BGR ENERGY

Friday, September 24, 2010

Is the Dollar Depreciating

Dollar Index is making bearish Head & Shoulders formation where below 79 it can target 76/74 levels. Actually H&S target could be 71.

Monthly Graph shows likely formation of symmetrical triangle and current leg may test 76.20 as probable support.
(Graph Source: NetDania)

The US Dollar Index is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies. It is a weighted geometric mean of the dollar's value compared only with
  • Euro (EUR), 57.6% weight
  • Japanese yen (JPY), 13.6% weight
  • Pound sterling (GBP), 11.9% weight
  • Canadian dollar (CAD), 9.1% weight
  • Swedish krona (SEK), 4.2% weight and
  • Swiss franc (CHF) 3.6% weight.
Comments welcome!

Monday, September 20, 2010

Weekly Nifty Update 18 Sept, 2010 by Tanmay G Purohit

Nifty has closed the week very strong +244 points at 5885 but Adv-Decline ratio has remained negative through the week in spite of Nifty moving higher as focus has clearly shifted to Large caps from Mid and Small Caps after strong IIP numbers last weekend. DLF, AXIS BANK, HDFC, ABB, SUN PHARMA, UNITECH, RELIANCE rose more than 7% each from Nifty while LIC HSG, CORPORATION BANK rose 11% this week to take Nifty Junior higher.
Indian top one hundred firms paid 381.07 billion rupees in advance taxes for July-Sept, a rise of 16.4 percent year-on-year, an official from the federal finance ministry said. Sectors like banking, finance and auto have done well while cement and pharma adv tax payments were down as compared to last year's numbers. Cement prices would go up in South by Rs 25-40 per 50kg bag despite low demand – Coal and Freight costs form nearly 50% cost of Cement production and both have gone up 20-30% in last one year as a result of which prices have been hiked.
RBI raised repo rate by 25bps and reverse repo rates by 50bps in its Monetary policy on Thursday and bankers have indicated that borrowing rates may soon rise. While talking about Economic Indicators in India, the RBI has voiced concern over the high volatility in the industrial production numbers, which is sure to bring greater focus on the integrity of data put out by Indian agencies as it comes within a month of an embarrassing mistake in first quarter GDP estimates.
Trade numbers for August - Trade deficit at 23-month high at $13.06Billion, exports up 22.5% to $16.64billion and  Imports jump 32.2% to $29.7 billion in August, trade gap during the April-August period stood at $56.62 billion.
US House passes 'Made in America' bill, the US House of Representatives passed two different bills that mandate the Congress and the Department of Homeland Security to purchase only US-made goods indicating U.S entering protection era. Indian cabinet cleared the way to allow commodities exchanges to launch options on Thursday, a move which should boost liquidity in markets which have already attracted international investors.
Technical View:
Nifty has neared 5900 very easily after breakout last week and now 6000 is next psychological level to test while Sensex would eye 20000.
Investors need to know that this market is becoming overvalued every day and Nifty P/E is at 24.61 while S&P CNX 500 P/E at 22.37. Markets can remain overvalued for a long time as long as liquidity is strong but once selling starts correction can be equally sharp. There are opportunities in any market so investors would do well accumulating stocks for long term - RELIANCE, NTPC, POWERGRID, GLENMARK, NHPC, ONMOBILE, MRPL, NEYVELILIG, RELINFRA, APIL are value buy for 3-4yrs long term investor who feel missed out can invest in monthly SIP basis.
Nifty hasn’t really corrected in the last 12 sessions and has risen nearly 9% in this period. In this fast rally Nifty has never broken previous day lows so traders can take benefit of this to keep intraday stops. For traders keeping 5790 as short-term stop loss is advisable while 5550 becomes very important intermediate term support.
Support-5790/5650/5575 Resistance-5925/6030/6170
Stocks looking good: PUNJ LLOYD, HIND OIL EXP, EKC
Stocks looking weak: HERO HONDA, CIPLA

Monday, September 13, 2010

Update on SINTEX

SINTEX we had a buy call since Rs 217 for target Rs 400. It was an investment call given on 5 Aug 2009 and now after 13 months we see 79% returns. This is an update for the same.
SINTEX trades at Rs 390 and our target is almost achieved. The stock has seen fresh long position with +8% Open interest built up and price higher by 2.5% and volumes higher by +252% and stock from start of the settlement has seen +8% price change and +31% higher O.I. Stock has made 52week high Support 20DMA Rs 366 higher side Rs 405-420 can be targets for short-term traders. Slowly one can take profits in this stock as our long term targets are met.

Previous Post on SINTEX:

Weekly Nifty Update 11 Sept, 2010 by Tanmay G Purohit

Nifty has closed the week on a very positive note up 161 points at 5640 and the week was dominated by METAL  and CEMENT stocks – TATA STEEL, ACC, AMBUJA rose more than 8% each while IDEA CELLULAR went up by 7%. SBI and HINDALCO too inched up by 7%. Adv-Dec ratio was favourable to advances but some Nifty stocks were under pressure – POWERGRID, CAIRN lost nearly 3% while BPCL, RELINFRA were other losers.
IIP data for July 2010 was much better than expected as Industrial production grew 13.8% against 5.8% in June 2010 and it was 7.2% in July 2009. Manufacturing sector clocked the strongest growth of 15% and Cap Goods sector rose 63%. Now experts are more confident about further RBI rate hikes and the central bank is scheduled to meet on 16 September where 25bps hike in repo and reverse repo is widely anticipated by economists.
Not only will we have RBI move on interest rates next week but also Advance Tax payments for Q2 will be known.  After such a bright IIP and GDP Data, Adv Tax is one more number and then Q2 results would dominate the market trend. Agri commodity stocks are witnessing a good rally after shortage of Wheat globally and the commodity is rising while fertilizer stocks look good for more gains from here. Market is overvalued and flow of advance tax numbers has to support. Mumbai High Court verdict on Hutch Vodaphone deal will have far-reaching implications as far as FDI, M&A and PE activity in India are concerned SESAGOA & CAIRN can become weak.
IT Sector Woes are far from over as The US state of Ohio has banned outsourcing of government IT and back-office projects to offshore locations such as India, raising fears of similar moves by other American states struggling to cope with high unemployment rates. Obama statement that tax breaks should go to companies that create jobs in the US and not overseas would hurt more.
Technical View:
After Breakout above 5520 Nifty has now closed at 32-month high and the market has given a direction; till 5500 below close is not seen weakness is not seen. Nifty long term moving average supporting market 200DMA which 5193 and 100DMA is 5287 any close below 5400 weakness will be high.

Support-5580-5525-5460 Resistance-5689-5738-5778
Stocks looking good: CHAMBAL, APIL
Stocks looking weak: CAIRN, SESA GOA

Tuesday, September 07, 2010

ICSA - powering ahead

ICSA (Rs 133):- The stock for the last 12 months has underperformed the indices but now shows some accumulation as it has crossed 13, 26 and 50 DMA in just one session. Now crossing Rs 145 (200DMA) would be an important buy signal. Stock maintaining Rs 123 is important for any uptrend.
Buy Rs 130-132 for target Rs 145, keep stops below Rs 127
Book Values Rs 149 EPS Rs 25.05 P/E 5.3 FV= Rs 2/share
ICSA - India has rich experience in design and development of customized Infrastructure solutions, state-of-art embedded technologies and software applications for the power, oil, gas and water sectors. Our team of committed and highly qualified professionals with vast experience in industrial automation and execution of tailor made projects from the idea stage to its successful implementation.

Sunday, September 05, 2010

Weekly Nifty Update 04 Sept, 2010 by Tanmay G Purohit

Nifty has closed 70 points higher this week at 5479 after once again maintaining crucial support at 5350. BHARTI AIRTEL, RANBAXY, TATA STEEL, UNITECH and RELINFRA rose more than 5% each to support Nifty while BHEL, HERO HONDA, SUN PHARMA were top losers. HERO HONDA fell on reports that Honda may exit the company soon. METAL stocks rose after steel companies raised prices of their products from Sep 1st. HOTEL stocks gained after RELIANCE bought stake in EIH – HOTEL LEELA +9%, IND HOTEL +5%, EIHAHOTELS itself rose 60% this week.
DTC-Direct Tax Code is very positive for stock market with long term capital gains tax nil, while IT industry is worst affected Software units under STPI scheme will be levied 30% corporate tax but DTC will be implemented later by one year in 2012 April by which time many changes will be made.
Indian GDP Growth for Q1 came in at 8.8% and as per that economy grew at its fastest pace in over two years in the April-June quarter but some economists have questioned the accuracy of the data while government has not revised the estimates even after many experts doubting the statistics. The HSBC Markit Purchasing Managers' Index , based on surveys of 500 companies in Asia's third-largest economy, fell to 57.25 in August from 57.6 in July, but remained well above the 50 mark that divides growth from contraction. India's manufacturing sector expanded for the 17th successive month in August, although at a slightly slower pace than in July, supported by strength in new orders.
Trade data for July which we have seen eariler July registers the largest trade deficit since Sep ‘08 of USD 12.93 bn as exports fell sharply and imports strengthened and cumulative trade deficit for April - July 2010 of USD 45.19 billion was much higher than the deficit of USD 30.84billon during April -July 2009.
Maintaining their bullish stance for the third month in a row, global fund houses made a net investment of Rs 11,687 crore ($2.5 billion) in Indian equities in August as per SEBI Data.
RAILWAY stocks KALINDEE and TEXMACO are moving now and both can give good short-term returns. GUJNRECOKE has moved up as DTC would benefit the company, IDBI, 3IINFO, FSL, GLENMARK also look good for traders. JSW ENERGY looks good as it trades near all time highs and Rs 148-150 can be possible soon. Underperforming stocks are becoming outperformers now – KPIT, TATA COMM, ONMOBILE moved last month and now ICSA, IDBI, TATA SPONGE, EKC, NHPC can move higher if markets support, 3i INFO and FSL are owned by ICICI Bank and they can be good investment candidates. SUZLON moved nearly 15% on Thursday on rumours that Reliance would buy stake in the company but later denied by both managements.
Technical View: Even though Nifty has closed positive for the week, for the last two sessions it has been unable to pierce past 5520 levels. If it continues to be resisted above 5500 and falls below 5400 we may even see 5100 being tested soon. Crossover of 5520 on sustainable basis is needed for further strength in market. Nifty still trades near resistance of up channel in weekly graph and as long as that is not crossed there is always a danger of falling down soon.
Stocks looking good: ICSA, CHAMBAL FERT,
Supp 5430/5350/5200 Res 5522/5589/5680

Wednesday, September 01, 2010

TATA SPONGE triangle breakout looks near

TATA SPONGE Rs 326 is trying to breakout from a symmetrical triangle. Stock sustaining above Rs 340 would be a sign of strength. 
 Group Companies -