Both the major indices Sensex and Nifty lost close to 5% and 4% respectively during the week. It would have been much worse but for the startling display of short covering on Friday. Markets were weak through out the week and recovered sharply during the last hours of trading on Friday. The market breadth was extremely negative. Almost all sectors took the hit except some pharma and cement counters. Ambuja Cement, BPCL, Zee, Ranbaxy and NTPC were among the Nifty gainers while Unitech, Tata Communication, DLF, HDFC Bank, ICICI Bank, Tata Power and HDFC were the top losers.
The sharp bounce back that we saw on Friday is not likely to last for long. Any sharp rise is an opportunity and one should use these opportunities to exit and build short positions. The fall is not likely to be abated at this juncture and we might not see any big upside in the immediate term. Nifty may at best try to climb to 2800 where it finds resistance before F&O expiry but it is almost certainly comeback to the supports of 2500 and 2360. A short trader must take his chances and maintain short positions. Markets are adjusting the excesses and trying to come back to what is being called fair valuation. Stocks are on their way down and are yet to stop. Buying should be contemplated only when the fall comes to an end and markets consolidate for a reasonable amount of time, which is a long drawn process. In all probability, we are not going to see that happen any time soon. This bear phase may remain for a time longer than expected. Do not ponder over buying but try to exit.
“Trade what you see and not what you think”.
SELL
JSW Steel Sell @ 210-212 Tgt 184, 170 SL 217
National Aluminium Sell @ 180-182 Tgt 168, 160 SL 190
Indian Hotel Sell @ 49-49.50 Tgt 45, 43 SL 50
Cairn India Sell @ 141-142 Tgt 132, 125 SL 145
SBI Sell @ 1220-1230 Tgt 1120, 1070 SL 1245
HDFC Sell @ 1450-1460 Tgt 1320, 1200 SL 1500
Sunday, November 23, 2008
Sunday, November 16, 2008
Markets tumbled once again after 2 weeks of gains. The fall was again across the board and none of the sectors was spared. There were no places to hide since even defensives like FMCG are not able to hold the their prices. There were no notable gainers from Nifty except Nalco, which added more than 6% during the week. Suzlon, Zee, SAIL, Unitech, Tata Motors, DLF, ACC, M&M, L&T, Maruti and Tata Motors were among the major losers.
As has been our view since past 2-3 months, markets don’t look too promising for the foreseeable future. Things may become worse than what is being talked about and hence we might not see any recovery in the markets. Supports exist for Nifty at 2600 and further at 2520. It may find it difficult to breach 3000. We have been witnessing sharp bounce backs every now and then but we feel that from the current point even bounce backs would not be sharp. So a short trader carries with him lesser amount of risk and more rewards. We recommend medium and long term investors to liquidate their holdings and stay in cash. The fall may not stop here but it cannot go on like this forever. Hence traders should make the most of this situation and try to make bucks as quickly as possible. We may see the pace of the fall subsiding after a while but not the actual fall. Investors are still not willing to accept this fact since we haven’t witnessed it so far, but we see a strong possibility of this phase remaining for a long time.
SELL
Siemens @ 300-302 Tgt 278, 264 SL 314
Rolta @ 170-172 Tgt 154, 146 SL 175
IDFC @ 66-67 Tgt 62, 57 SL 71
Cipla @ 191-192 Tgt 181, 174 SL 195
National Aluminium @ 181-183 Tgt 168, 150 SL 185
Praj Industries @ 73-74 Tgt 66, 61 SL 76
ICICI Bank @ 408-410 Tgt 376, 333 SL 420
As has been our view since past 2-3 months, markets don’t look too promising for the foreseeable future. Things may become worse than what is being talked about and hence we might not see any recovery in the markets. Supports exist for Nifty at 2600 and further at 2520. It may find it difficult to breach 3000. We have been witnessing sharp bounce backs every now and then but we feel that from the current point even bounce backs would not be sharp. So a short trader carries with him lesser amount of risk and more rewards. We recommend medium and long term investors to liquidate their holdings and stay in cash. The fall may not stop here but it cannot go on like this forever. Hence traders should make the most of this situation and try to make bucks as quickly as possible. We may see the pace of the fall subsiding after a while but not the actual fall. Investors are still not willing to accept this fact since we haven’t witnessed it so far, but we see a strong possibility of this phase remaining for a long time.
SELL
Siemens @ 300-302 Tgt 278, 264 SL 314
Rolta @ 170-172 Tgt 154, 146 SL 175
IDFC @ 66-67 Tgt 62, 57 SL 71
Cipla @ 191-192 Tgt 181, 174 SL 195
National Aluminium @ 181-183 Tgt 168, 150 SL 185
Praj Industries @ 73-74 Tgt 66, 61 SL 76
ICICI Bank @ 408-410 Tgt 376, 333 SL 420
Sunday, November 9, 2008
Markets witnessed short covering in many F&O counters but indices saw slender gains due to sharp cuts in Reliance and some technology stocks. Banking stocks were the major gainers during the week with a sharp rise of close to 12% on Bank Nifty. Reliance lost as much as 11% and was the one of the major Nifty losers along with Sterlite, Tata Steel, Satyam, Infosys and ABB. Suzlon was the top gainer with a 60% gain after the severe drubbing it got in the last couple of months. Ranbaxy, DLF, Reliance Infra, Reliance Power, PNB, BPCL, Siemens, ITC, SBI and ONGC gained anywhere between 10-30% during the week.
Asian markets saw huge rallies this morning and we may see a gap up opening at the beginning. Multiple resistances exist for Nifty between 3260-3400 and it is not likely that Nifty will breach this zone effortlessly. It is highly unlikely that equities witness across the board buying in the foreseeable future. We believe that the rises that we are seeing every now and then are due to short covering and not genuine long term buying. The valuations in many stocks are looking reasonable at this juncture but the fundamentals are changing as quickly. If the alacrity with which markets sold off during the past couple of months is any indication, we feel we are in for troubled times. Do not commit funds for buying equities and wait for at least another 2 quarters. The markets are here to stay and the stocks, which saw stupendous rallies during the past, are not going to be the same money making machines. Next time it will be a new set of stocks that will make money for investors. We recommend traders to create fresh shorts and hold.
Maruti Sell @ 610-614 Tgt 564, 540 SL 626
Rolta Sell @ 168-170 Tgt 146, 138 SL 174
Siemens Sell @ 307-310 Tgt 278, 250 SL 314
Bharti Airtel Sell @ 670-674 Tgt 618, 600 SL 685
Sun Pharma Sell @ 1230-1240 Tgt 1165, 1120 SL 1260
Zee Limited Sell @ 145-147 Tgt 136, 124 SL 150
Asian markets saw huge rallies this morning and we may see a gap up opening at the beginning. Multiple resistances exist for Nifty between 3260-3400 and it is not likely that Nifty will breach this zone effortlessly. It is highly unlikely that equities witness across the board buying in the foreseeable future. We believe that the rises that we are seeing every now and then are due to short covering and not genuine long term buying. The valuations in many stocks are looking reasonable at this juncture but the fundamentals are changing as quickly. If the alacrity with which markets sold off during the past couple of months is any indication, we feel we are in for troubled times. Do not commit funds for buying equities and wait for at least another 2 quarters. The markets are here to stay and the stocks, which saw stupendous rallies during the past, are not going to be the same money making machines. Next time it will be a new set of stocks that will make money for investors. We recommend traders to create fresh shorts and hold.
Maruti Sell @ 610-614 Tgt 564, 540 SL 626
Rolta Sell @ 168-170 Tgt 146, 138 SL 174
Siemens Sell @ 307-310 Tgt 278, 250 SL 314
Bharti Airtel Sell @ 670-674 Tgt 618, 600 SL 685
Sun Pharma Sell @ 1230-1240 Tgt 1165, 1120 SL 1260
Zee Limited Sell @ 145-147 Tgt 136, 124 SL 150
Sunday, November 2, 2008
Dated 2nd November, 2008
Indices recovered sharply from the lows they touched on the first trading day of the week. It was a sharp recovery and both Sensex and Nifty recovered nearly 25-30% from the lows. The bounce back was lead by Metals, Technology, Auto, Infrastructure and Realty stocks. Almost all sectors made significant gains due to short covering. The most prominent among gainers is Reliance, which gained nearly 35% during the week. Unitech, Hindalco, Sterlite, Tata Communincation, ICICI Bank and M&M were the other gainers all richer by more than 25%. Sun Pharma, Ranbaxy, Suzlon, Dr Reddy and SBI were among the losers.
A bounce back was necessary for the markets and it happened at the most opportune time ie.. on Diwali. This pull back may take Nifty to 3100 and may be even 3400. On the downside 2760 provides a strong support and Nifty is likely to hold this support for a couple of weeks, at least. The overall sentiment going into the next week is positive and hence one should avoid taking short positions in the immediate future. We may witness stock specific movements this week and hence traders are recommended to cautiously trade long on dips. If Nifty manages to climb to the levels of 3400, it will be a right opportunity for medium term traders to start building short positions and even investors to get out of their holdings. Short term/intraday traders may go long on falls in specific stocks and medium term players should look for building short positions on sharp rallies. 3400 on Nifty is an ideal level for going short and hence we recommend traders to wait for a week of upside and then build medium term short positions.
BUY
Reliance Comm @ CMP Tgt 242, 258 SL 205
IVRCL Infra @ 83-85 Tgt 94, 100 SL 80
Tata Communication @ 455-460 Tgt 482, 500 SL 440
Chambal Fertilizer @ 43.50-44 Tgt 47, 50 SL 42.80
GTL Infra @ 37.8-38 Tgt 39.5, 41.20 SL 37
SELL
Satyam Computers @ 316-320 286 264 335
Sun Pharma @ 1170-1180 1040 1000 1200
GVK Power @ 12-12.30 10 8.60 13
Sterlite Inds @ 310-320 260 220 340
A bounce back was necessary for the markets and it happened at the most opportune time ie.. on Diwali. This pull back may take Nifty to 3100 and may be even 3400. On the downside 2760 provides a strong support and Nifty is likely to hold this support for a couple of weeks, at least. The overall sentiment going into the next week is positive and hence one should avoid taking short positions in the immediate future. We may witness stock specific movements this week and hence traders are recommended to cautiously trade long on dips. If Nifty manages to climb to the levels of 3400, it will be a right opportunity for medium term traders to start building short positions and even investors to get out of their holdings. Short term/intraday traders may go long on falls in specific stocks and medium term players should look for building short positions on sharp rallies. 3400 on Nifty is an ideal level for going short and hence we recommend traders to wait for a week of upside and then build medium term short positions.
BUY
Reliance Comm @ CMP Tgt 242, 258 SL 205
IVRCL Infra @ 83-85 Tgt 94, 100 SL 80
Tata Communication @ 455-460 Tgt 482, 500 SL 440
Chambal Fertilizer @ 43.50-44 Tgt 47, 50 SL 42.80
GTL Infra @ 37.8-38 Tgt 39.5, 41.20 SL 37
SELL
Satyam Computers @ 316-320 286 264 335
Sun Pharma @ 1170-1180 1040 1000 1200
GVK Power @ 12-12.30 10 8.60 13
Sterlite Inds @ 310-320 260 220 340
Sunday, October 26, 2008
Dated 27th October, 2008
Indices are trading at levels not seen in the last 3 years. Another week of selling saw Nifty losing close to 16% and Sensex losing around 13%. The last trading session was particularly severe and almost stocks from all sectors were sold off with out any support. This phase is arguably “the Worst” for our markets so far. Blue chips losing 20-50% in a single day is a rare sight to behold. Technology heavyweights were holding strong in an otherwise weak market and Realty was the worst loser. Uniteh, Suzlon, Nalco, M&M, Tata Motors, DLF, Tata Steel and Hindalco were the top Nifty losers while TCS, Satyam and Infosys were the top gainers.
A bounce back should be the least one could expect after a fall of such magnitude. Markets are defying all laws when it comes to this fall. There is no support at any level and hence one should not be very aggressive buyer at this point of time. The alacrity with which stocks are being sold off, suggests large-scale exodus of funds and not just liquidation. It might take a long time for these wounds to heal and hence one should stay away. We recommend even long term investors to stay away at this moment since the results for the coming quarters are likely to surprise even the most pessimistic estimates. There is a sense of gloom everywhere, which is likely to stay for more time. For the time being avoid the markets and traders make the most of it. Many stocks are likely to see more falls and hence short term short trades may be profitable. The best thing still is to stay away.
A bounce back should be the least one could expect after a fall of such magnitude. Markets are defying all laws when it comes to this fall. There is no support at any level and hence one should not be very aggressive buyer at this point of time. The alacrity with which stocks are being sold off, suggests large-scale exodus of funds and not just liquidation. It might take a long time for these wounds to heal and hence one should stay away. We recommend even long term investors to stay away at this moment since the results for the coming quarters are likely to surprise even the most pessimistic estimates. There is a sense of gloom everywhere, which is likely to stay for more time. For the time being avoid the markets and traders make the most of it. Many stocks are likely to see more falls and hence short term short trades may be profitable. The best thing still is to stay away.
Sunday, October 19, 2008
Dated 20th October, 2008
It was the heavy weights’ turn to contribute towards the downtrend. Biggies like Reliance, L&T, ONGC, RPL, Grasim, Ranbaxy, Nalco, Hindalco and Tata Steel fell anywhere between 10-25% week on week. The market breadth was not as terrible as we have seen in the recent past. There were sharp short covering rallies in some of the beaten down F&O stocks. PSU Banking stocks bucked the trend and remained resilient during this entire bear phase. ICICI Bank, PNB, Satyam Computer, GAIL and BPCL were among the top Nifty gainers.
Nifty may test the psychological 3000 mark this week achieving our target (given on 29th Sep) in just 20 days. We feel that the fall is likely to continue but it requires real guts to go short at this level. One must wait for a small pull back for going short. Going long is a strict “NO” since the overall trend is negative and is likely to remain so for atleast another 2 quarters. There is a possibility that we may witness some euphoria being created before Diwali, but still I feel it should be utilized to sell into stocks. Stocks like Bharti, Power Grid, Lupin, NTPC, Kotak Bank have broken their short term supports and are likely to see further downside. One should not be very aggressive while selling but remain short, never the less.
Nifty may test the psychological 3000 mark this week achieving our target (given on 29th Sep) in just 20 days. We feel that the fall is likely to continue but it requires real guts to go short at this level. One must wait for a small pull back for going short. Going long is a strict “NO” since the overall trend is negative and is likely to remain so for atleast another 2 quarters. There is a possibility that we may witness some euphoria being created before Diwali, but still I feel it should be utilized to sell into stocks. Stocks like Bharti, Power Grid, Lupin, NTPC, Kotak Bank have broken their short term supports and are likely to see further downside. One should not be very aggressive while selling but remain short, never the less.
Sunday, October 12, 2008
Dated 13th October, 2008
The selling just doesn’t seem like abating. It was THE WORST week on the exchanges in terms of index fall and erosion in market cap. After all we don’t very often see bluechips losing one fourth of their value in a single week, especially after a deep cut had already happened. It was more or less predicted by us and we were categorical when we said this on September the 29th and I quote - One must exit all long positions and wait for the opportunity to short the markets. We might see some soothing comments from the FM and statements from big corporates when they come out with second quarter results about the India growth story but that will only add to the pain – unquote. Amid the turmoil, PSU stocks were the ones, which were a bit resilient than the rest. Suzlon, Sterlite Inds, RCOM, ICICI Bank, Tata Steel, Unitech and Siemens were the stocks that lost more than 25% week on week.
It sends shivers down my spine when I hazard a guess that another such week is on cards. I have my own reasons for such a wild guess. A small pull back is not ruled out, though. Asian markets are recovering this morning and we might see a flat to gap up opening but markets are not likely to sustain rises. There is an age old saying that “Buy when the markets are panic” but I don’t buy this argument at this moment at least for I recommend buying when I see appreciation and not because stocks have fallen. History is being created everyday and I would surely hate to be caught on the wrong side. We recommend Medium and long term investors to wait for another two quarters before committing any funds. It is a ‘clear sell’ from our side and investors must take their own informed decisions before taking a call on the markets. We must have a stop loss for any trade and a close above 3500 should be the stoploss on Nifty. If one were to buy for a pull back I would rather recommend for a wait for the pull back and sell. If one has not already sold, I suggest cutting positions, if not short. A pull back is certainly possible but it is worth cutting positions than withstanding the pain. For the die-hard bulls, I could only recollect the old Raj Kapoor classic “Jaane kahaan gaye wo din….”.
SELL
Bharti Airtel @ 710-720 Tgt 660, 600 SL 740
Lupin @ 640-645 Tgt 565, 490 SL 660
PNB @ 480-484 Tgt 440, 400 SL 495
Titan @ 850-860 Tgt 760, 680 SL 880
Hero Honda @ CMP Tgt 770, 730 SL 840
Tata Communication @ 425-430 Tgt 385, 340 SL 440
NTPC @ 168-170 Tgt 159, 148 SL 174
SAIL @ 110-112 Tgt 98, 82 SL 114
http://www.orkut.com/Community.aspx?cmm=17682920
www.sunilkdaga.blogspot.com
It sends shivers down my spine when I hazard a guess that another such week is on cards. I have my own reasons for such a wild guess. A small pull back is not ruled out, though. Asian markets are recovering this morning and we might see a flat to gap up opening but markets are not likely to sustain rises. There is an age old saying that “Buy when the markets are panic” but I don’t buy this argument at this moment at least for I recommend buying when I see appreciation and not because stocks have fallen. History is being created everyday and I would surely hate to be caught on the wrong side. We recommend Medium and long term investors to wait for another two quarters before committing any funds. It is a ‘clear sell’ from our side and investors must take their own informed decisions before taking a call on the markets. We must have a stop loss for any trade and a close above 3500 should be the stoploss on Nifty. If one were to buy for a pull back I would rather recommend for a wait for the pull back and sell. If one has not already sold, I suggest cutting positions, if not short. A pull back is certainly possible but it is worth cutting positions than withstanding the pain. For the die-hard bulls, I could only recollect the old Raj Kapoor classic “Jaane kahaan gaye wo din….”.
SELL
Bharti Airtel @ 710-720 Tgt 660, 600 SL 740
Lupin @ 640-645 Tgt 565, 490 SL 660
PNB @ 480-484 Tgt 440, 400 SL 495
Titan @ 850-860 Tgt 760, 680 SL 880
Hero Honda @ CMP Tgt 770, 730 SL 840
Tata Communication @ 425-430 Tgt 385, 340 SL 440
NTPC @ 168-170 Tgt 159, 148 SL 174
SAIL @ 110-112 Tgt 98, 82 SL 114
http://www.orkut.com/Community.aspx?cmm=17682920
www.sunilkdaga.blogspot.com
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