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
Sunday, February 15, 2009
Sunday, February 8, 2009
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
Sunday, February 1, 2009
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.
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.
Monday, January 26, 2009
Dated 27th January, 2009
It was another week of downfall and almost all major and sectoral indices saw major falls. Reliance came out with better than expected quarterly numbers but still could not climb much. The weakness was visible all across and Banking was particularly weak despite good results from PSU banks. Powergrid was the biggest Nifty gainer with a 13% rise during the week while Zee lost about a fourth of its market cap. Nalco, Jet airways, Cipla and Hero Honda managed to hold into the green while Tata Steel, M&M, DLF, Ranbaxy, ICICI Bank, Hindalco, Siemens, RCom, Grasim, L&T, Maruti, Tata Motors, Maruti, SBI, HDFC, PNB, Wipro and Sail lost between 10-20% during the week.
A decisive close below 2700 on Nifty more or less indicates the things to come. There seems to be unanimity of opinion about the fall now and what we are going to witness is a range bound movement in Nifty for this week. The put call ratio suggests a range of 2600-2700 on Nifty until this expiry. One should indulge in stock specific short trades and pick the right counters to stay short. Cement counters remained quiet without much downside in January. We might see sharp downward rallies in cement in the coming month and hence we recommend traders to stay short in cement. The chances of negative shocks far exceed the possibility of a positive surprise and we may going forward see some more skeletons falling as promoters feel the funds crunch and had to come out in open due to desperation. We don’t want to get struck with another Satyam, or do we? Avoid buying.
Following are some of the positional calls for the month of February. Initiate short positions in counters where the Feb futures are tradina at or nearing initiation prices with appropriate day close stoplosses. Some stocks may not hit Initiation prices but the targets are in tact. Wait for the right opportunity and go short. Avoid trading long.
A decisive close below 2700 on Nifty more or less indicates the things to come. There seems to be unanimity of opinion about the fall now and what we are going to witness is a range bound movement in Nifty for this week. The put call ratio suggests a range of 2600-2700 on Nifty until this expiry. One should indulge in stock specific short trades and pick the right counters to stay short. Cement counters remained quiet without much downside in January. We might see sharp downward rallies in cement in the coming month and hence we recommend traders to stay short in cement. The chances of negative shocks far exceed the possibility of a positive surprise and we may going forward see some more skeletons falling as promoters feel the funds crunch and had to come out in open due to desperation. We don’t want to get struck with another Satyam, or do we? Avoid buying.
Following are some of the positional calls for the month of February. Initiate short positions in counters where the Feb futures are tradina at or nearing initiation prices with appropriate day close stoplosses. Some stocks may not hit Initiation prices but the targets are in tact. Wait for the right opportunity and go short. Avoid trading long.
Sunday, January 18, 2009
Dated 19th January, 2009
Nifty took support around 2680-2700 band and bounced back. The results so far didn’t do too much to give any big boost to the sagging markets. Realty, Infra, Banking and Metal stocks were among the major losers. Reliance Infra, Infosys, Hero Honda and M&M were among the major Nifty gainers while Unitech, Siemens and DLF lost more than 10% during the week.
Asian markets are trading strong and we might see opening gains on Monday. Short term resistances exist at 2860, 2950 and 3150. The action would remain stock specific as the third quarter results keep coming in. There are two reasons to remain short in the markets. The first one is that the overall medium and long term outlook looks extremely bleak and the other one is what happened with Satyam and Rolta can happen with a host of other companies in terms of price erosion. A negative surprise may see a stock crash in a single day and the days of pleasant surprises are more or less over. Risk takers should go ahead and initiate short positions in counters, whose results are due and cover positions after the announcement of results. Out of every 10 stocks we might see returns in 7-8 counters. One should only remain short at rises and do not carry any long positions.
Hero Honda, Indian Bank, Akruti, Chambal Fertilizer, Gail, Noida Toll, Maruti, GTL and GMR Infra are depicting relative strength and we might see some gains in short term. Avoid short positions in these stocks.
We might see fall in some of the PSU banking stocks which erstwhile remained strong throughout. Other counters where one can expect a fall in short term include IVRCL Infra, Financial Tech, DCB, Hindalco, JSW Steel, Punjlloyd, Pantaloon, Unitech, Voltas, Mc Dowell, Polaris and Jindal Saw.
Asian markets are trading strong and we might see opening gains on Monday. Short term resistances exist at 2860, 2950 and 3150. The action would remain stock specific as the third quarter results keep coming in. There are two reasons to remain short in the markets. The first one is that the overall medium and long term outlook looks extremely bleak and the other one is what happened with Satyam and Rolta can happen with a host of other companies in terms of price erosion. A negative surprise may see a stock crash in a single day and the days of pleasant surprises are more or less over. Risk takers should go ahead and initiate short positions in counters, whose results are due and cover positions after the announcement of results. Out of every 10 stocks we might see returns in 7-8 counters. One should only remain short at rises and do not carry any long positions.
Hero Honda, Indian Bank, Akruti, Chambal Fertilizer, Gail, Noida Toll, Maruti, GTL and GMR Infra are depicting relative strength and we might see some gains in short term. Avoid short positions in these stocks.
We might see fall in some of the PSU banking stocks which erstwhile remained strong throughout. Other counters where one can expect a fall in short term include IVRCL Infra, Financial Tech, DCB, Hindalco, JSW Steel, Punjlloyd, Pantaloon, Unitech, Voltas, Mc Dowell, Polaris and Jindal Saw.
Sunday, January 11, 2009
Dated 12th January, 2009
It was the most unfortunate day for the corporate India when Mr Ramalinga Raju confessed that Satyam was a fraud. It came as a shocker and nothing less than a ban and a disgorgement order against the auditors of the company should compensate the loss of credibility that India has suffered. A fraud of this nature is beyond imagination and the reaction from the markets is not very surprising. Almost all sectors took a hit and stocks with not so sound credentials were beaten to dust. Not surprisingly, Satyam was the biggest Nifty loser with a fall of 86%. DLF, Rcom, Unitech, Reliance Infra, Siemens, Reliance Power, L&T, HCL Tech, Ranbaxy, RPL, Nalco and Reliance were the biggest losers. Grasim, Maruti, TCS, M&M, HDFC, HUL and Infosys were the top gainers.
The next week is going to be crucial as the results season begin with the announcement of results from Infosys. The results this quarter are likely to throw some negative surprises and we should be prepared for some nasty blows on specific stocks. One should remain short in the markets as we are convinced about the long term bearish outlook.
The next week is going to be crucial as the results season begin with the announcement of results from Infosys. The results this quarter are likely to throw some negative surprises and we should be prepared for some nasty blows on specific stocks. One should remain short in the markets as we are convinced about the long term bearish outlook.
Sunday, January 4, 2009
Dated 5th January, 2009
Indices recovered from the lows and markets gave a tremendous bounce back in terms of market breadth. Almost all sectors participated prominent among them were Media, Realty, Infrastructure, Metals, Banking, Technology, Capital Goods and Power. Unitech was the top gainer Satyam Computer, RCOM, Sail, Reliance Infra, Hindalco, Ranbaxy, Suzlon, Nalco, ABB, ICICI Bank, Tata Motors, Siemens and L&T were among the top gainers gaining anywhere between 10-35% over the week.
It was one of the worst weeks for us in terms of the success ratio of our weekly calls and outlook. Almost everything went wrong as markets staged a big rally. Markets defy everybody at one point or other and we are at the receiving end last week. We still maintain our overall view about the markets and recommend an exit for investors. We see resistance for Nifty coming at 3160 and further at 3250. We feel that markets are in a secular bear spiral and we might see a prolonged bear run on the markets and the rally that we have seen is a corrective rally which will fizzle out sooner or later. We do not recommend going against the trend and hence are vary of recommending a buy at this point. We suggest traders to wait for opportunities and remain sellers on the way down. Those who are holding on to the short positions should continue to hold the positions as we see troubled times ahead. Avoid long positions at any juncture.
It was one of the worst weeks for us in terms of the success ratio of our weekly calls and outlook. Almost everything went wrong as markets staged a big rally. Markets defy everybody at one point or other and we are at the receiving end last week. We still maintain our overall view about the markets and recommend an exit for investors. We see resistance for Nifty coming at 3160 and further at 3250. We feel that markets are in a secular bear spiral and we might see a prolonged bear run on the markets and the rally that we have seen is a corrective rally which will fizzle out sooner or later. We do not recommend going against the trend and hence are vary of recommending a buy at this point. We suggest traders to wait for opportunities and remain sellers on the way down. Those who are holding on to the short positions should continue to hold the positions as we see troubled times ahead. Avoid long positions at any juncture.
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