Dated 16th March, 2009

Both the major indices rallied sharply on the last trading session taking cues from global markets. Auto, Banking, Technology and Cement stocks participated in the rally. PSU oil marketing stocks were particularly weak as per our prediction last week. Tata Motors, ICICI Bank, Sterlite, HDFC, Nalco, Tata Communications, Reliance and RPL were among the major Nifty gainers. HPCL, BPCL, Bharti, IOC and Zee were the major losers.

We might see a positive opening on Monday on back of a buoyant Friday close and there may be some follow up buying. But these rises are not likely to sustain. Technically major resistance for Nifty comes around 2800. Short traders must wait for opportunities to sell anywhere around this level. Be stock specific and trade short at higher levels. Fundamentally we don’t see any major reason for a sustained rally. There are some positive indications on the auto sales and cement dispatch figures. We feel that these numbers do not reflect the true picture due to extraneous reasons like election fever and the govt schemes running on fast track. But this myopia is likely to evaporate in 1-2 months. Aptech, Moser Baer, Yes Bank, IDFC, Hotel Leela, Canara Bank, Bharti and Idea may try to test lower levels in the coming week. One can trade short in these stocks with adequate stoplosses. Avoid long positions.

Dated 9th March, 2009

Though it was a surprise, technically the pull back had to happen after such a steep cut. As time passes, it is becoming increasingly difficult for the markets to sustain a pull back. I am afraid we might see a time, not in the very distant future, when even pull backs as vigorous as this would be hard to come by. Any rise like this should be utilized to sell into irrespective of the valuations. We see no reason for the markets even to stabilize at this juncture, let alone a rally. Let all traders accept this reality and continue moving out of the markets and creating short positions. At levels that we are going to witness a few quarters from now, we might not dare to sell. Make the most of these relatively good times and SELL.

SELL
IOC @ 433-435 Tgt 424, 413 SL 438
Praj Industries @ 50-50.5 Tgt 46, 41 SL 52
India Infoline @ 42-43 Tgt 38.60, 35 SL 44
Aditya Birla Nuvo @ 360-364 Tgt 340, 320 SL 370
HPCL @ 276-278 Tgt 268, 260 SL 282
Reliance Capital @ 296-300 Tgt 271, 260 SL 305

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Dated 2nd March, 2009

Markets managed to end the week in green despite weakness in global markets. Auto stocks lead the pull back. M&M, Tata Motors and Maruti were the top gainers in Nifty. Infosys, ONGC, Tata Communication, NTPC and BHEL were among the other gainers. Ranbaxy was the worst loser losing over a fifth of its market cap in the week. ABB, ACC, PNB, HDFC, SAIL and Zee were the other losers.

Most of the global markets breached October lows and drifted much lower. The outperformance of our markets is not likely to last for long given the bleak global outlook. Asian markets are trading weak and we should expect a gap down opening and the cuts may get much deeper during the course of the week. 2660-2680 is the strong support for Nifty and if it manages to breach this level, the next support comes only at 2520, the RIL-RPL merger not withstanding. Sell at the opening and hold on to short positions.

SELL
Divis Lab @ 860-864 Tgt 824, 800 SL 875
ABB @ 370-372 Tgt 348, 336 SL 380
ACC @ CMP Tgt 494, 478 SL 526
Reliance Capital @ 360-362 Tgt 333, 320 SL 370
Tech Mahindra @ 254-256 Tgt 232, 220 SL 262
Grasim @ 1370-1375 Tgt 1320, 1200 SL 1400

Dated 24th February, 2009

Markets plunged sharply amid growing concerns of slow down and uninterrupted flow of bad news from the global markets. Almost all sectors too the hit with Banking index falling by a whopping 14% week on week. Small, medium and large cap stocks fell with out any exception. ICICI bank was the worst Nifty loser and lost more than one fifth of its market cap. Hindalco, Rcom, Reliance Infra, Tata Steel, Tata Communication, M&M, SAIL, HDFC, Suzlon, SBI, Unitech, PNB, RPL, L&T and Reliance were other counters which lost more than 10% week on week. Maruti, BPCL and ITC were the only Nifty stocks, which managed to end the week with out any losses.

Unlike the trend has been for years, we are going to witness the overall markets dominating the futures movement and the expiry rather than futures outstanding dictating the overall market trend. Markets might open with a downside gap and may take support at lower levels. 2660-2680 provides a good support for Nifty and we may see a bounce back from these levels. It Nifty manages to close below this band, we might see another sharp fall to 2500 very soon. Markets have to correct to levels of October-November lows sooner or later in line with the other global markets and it is a good opportunity for traders to build short positions in Nifty at rises. The heavy weights have to correct from this juncture and we will witness the 2500 levels in Nifty very soon. We have been recommending short positions since past 6 months and we continue to hold this belief that markets are heading for much lower levels. And the outlook cannot be complete with this last sentence “Avoid long positions at any level”.

Dated 16th February, 2009

Nifty managed to close well above 2900 with good market breadth. Almost all sectors participated in the move. Technology remained subdued while sectors like Fertilizer, Auto, Financials and Capital goods moved up. DLF, M&M, Siemens, Nalco, Unitech, RCom, Zee and L&T were the top Nifty gainers. HCL Tech, Dr Reddy, Ranbaxy, Infosys and ABB figured among losers.

Nifty decisively broke the level of 2900 and closed above it. Multiple resistances exist above 3000 and we do not see any reason for the markets to add on to these gains. The interim budget is going to be presented in the Parliament today and hence expect volatility for this week. One should try to get out of equities at every opportunity. Medium term traders should utilize the opportunity to progressively build shorts with 2-3 month perspective.

SELL
ABB @ 444-446 Tgt 430, 419 SL 454
Praj Industries @ 61.5-62 Tgt 56 SL 64
India Infoline @ 52-53 Tgt 48 SL 55
Sterlite Industries @ 280-282 Tgt 263 SL 294

Dated 9th February 2009

Markets recovered from the lower levels in line with the global markets and were held strong on the last trading day. Some of the small cap counters in F&O rallied after being beaten down continuously for past many months. Market breadth was negative for the major part of the week. Realty stocks witnessed mixed trends as the biggies DLF and Unitech got a drubbing while the smaller counters recovering smartly from the lows due to short covering. IT, Banking, Pharma and Financials lost further ground during the week while Cement and Shipping stocks were among the sectors which gained the most. Grasim, HCL Tech, ACC, SAIL and GAIL were the top Nifty gainers while Hindalco, M&M, Suzlon, HDFC, Reliance Infra, L&T, Reliance Power, Tata Motors and Sterlite lost anywhere between 5-10%.

2880-2900 is a crucial resistance area for Nifty in the short term. Markets may open with an upside gap given the strong global clues but there is every possibility that they may correct. A close above 2900 on Nifty may spring an upside surprise of another 100 points but the rallies are not likely to sustain. We might see distribution in many stocks taking place in the coming week/s and markets, in all probability, may resume their downward journey again. Wait till later half of the week for higher levels to create short positions progressively with a 2-3 month perspective. The possibility of negative surprises is looming large in the markets and it may come in at any time and in any form. Avoid long positions at any levels.

SELL
HCL Tech @ 130-132 Tgt 118 SL 135

Polaris @ 52-53 Tgt 48 SL 55

Mercator Lines @ 32-33 Tgt 28 SL 35

Sesa Goa 100-102 Tgt 90 SL 106

Ispat Industries @ 12-12.20 Tgt 10.60 SL 12.60

Dated 2nd February, 2009

Markets moved up sharply after falling for 3 consecutive weeks. Stocks across all sectors moved up and most of the moves were due to short covering more than anything else. Metals, Auto, Banking and Sugar were sectors, which showed rises. Reliance Infra, Unitech, Zee, SAIL, Ranbaxy, Sterlite, Reliance, ICICI Bank and RPL were among the major Nifty gainers. Suzlon, GAIL and PNB were the only counters which ended the week in red.

The rally we saw just now is purely due to short covering and is not backed by genuine buying and hence we feel that it is not sustainable. The bounces that we are witnessing are bear market rallies, which have the tendency to create lower tops. We feel that it will take a very long time for this bear market to reverse or even find a bottom. One should trade on both sides once the markets finish the fall and form a trading range. At this point in time we recommend remaining only short. Short term resistance on Nifty exist at the current levels and a close above the Friday’s close may see Nifty trying to stage back to 2950 and further 3100 levels. But that looks an uphill task given the fact that markets already rallied quite a bit last week. One should not be fooled by the rallies of this kind and continue selling without worrying too much about the upside. We expect fall in Sugar, Cement and Infrastructure stocks in the following weeks and hence recommend traders to build short positions with adequate stoplosses.