Market Mantra
Market outlook
Upbeat Monday Morning
"Advances are made by those with at least a touch of irrational confidence in what they can do.”
We expect the bulls to extend last week’s advance. Asian markets are mostly up, taking their cue from the positive finish on Wall Street. Though the undertone is upbeat, the market will remain volatile. Near-term support is expected at 4900 while resistance may kick in upwards of 5100.
The health of the global economy seems to be getting better and better, if the latest GDP data from Europe and
There is a camp which is skeptical about the ongoing recovery. There are apprehensions as to whether the green shoots will stop growing in the absence of stimulus. There are also concerns about possible asset bubbles. Then there is a camp which is positive and hopeful, including the globally renowned investor
Trading ideas (Time period: 1-3 days)
HCC (Buy, CMP Rs146, Target Rs152): HCC has been in a strong uptrend since the second week of March 2009. During the previous week, the stock managed to cross past its crucial resistance level of Rs144-146. Moreover, volumes have also picked up substantially as the stock breached the crucial resistance levels. The MACD and RSI (momentum indicators) are above neutral levels and are exhibiting the positive trend to continue. It presents an opportunity for the traders to capitalize on the uptrend. We recommend traders to BUY the stock between the levels of Rs144-147 for target of Rs152 and Rs160, with a stop loss of Rs139.
Canara Bank (SELL, CMP Rs377, Target Rs368): The above Daily Candlestick Chart shows that the stock has been on a strong uptrend for the past few months. Infact, the stock has already risen by 2.7x from Rs144 in March 2009 to a high of Rs380. The Daily RSI is exhibiting strong negative divergences, which indicates that the best is over and that the trend should reverse from the current levels. Volumes have decrease in the past few sessions, thus indicating low participation at higher levels. A bearish candlestick pattern on Friday supports our short term SELL argument for the stock. Traders can SELL the stock at current levels and on highs up to Rs390 for a target of Rs368 and Rs345. We advise traders to maintain a stop loss of Rs395.
Derivative strategies (Time period: Till expiry)
± Long IVRCL Infra Nov Future @ Rs407 for the target price of Rs420 and stop loss placed at Rs401.
Remarks: Net maximum profit of Rs13,000 and net maximum loss Rs6,000.
± Long Nagarjuna Const Nov Future @ Rs169 for the target price of Rs178 and stop loss placed at Rs165.
Remarks: Net maximum profit of Rs18,000 and net maximum loss Rs8,000.
Commodities – Metals (Time period: Intra-day)
Trade recommendation
| Commodity | Strategy | Levels | Target | Stop-Loss |
| Gold - Dec | Buy | Above 16810 | 16860, 16900 | 16770 |
| Silver - Dec | Buy | Above 27030 | 27180, 27350 | 26930 |
| Copper - Nov | Sell | At 308 | 304, 300 | 310.4 |
| Zinc - Nov | Sell | Below 100.5 | 99.3, 98 | 101.6 |
| Lead - Nov | Buy | Above 105.5 | 106.4, 107 | 104.7 |
| Aluminum - Nov | Trade as per calls given during trading session | |||
| Nickel - Nov | Sell | Below 747 | 730, 715 | 758.9 |
| Crude Oil - Nov | Sell | 3585-3590 | 3560, 3530 | 3610 |
| Natural Gas - Nov | Sell | 206-207 | 203, 200 | 208.4 |
Commodities – Agro (Time period: Intra-day)
Trade recommendation
| Commodity | Strategy | Levels | Target | Stop-Loss |
| Pepper - Dec | Sell | Below 15150 | 15015, 14880 | 15285 |
| Jeera - Dec | Sell | Below 13860 | 13720, 13680 | 13960 |
| Turmeric - Dec | Sell | Below 11050 | 11000, 10950 | 11083 |
| COCUDCAKL - Dec | Buy | 571-572 | 576, 580 | 569 |
| Chana - Dec | Sell | Around 2690 | 2660, 2635 | 2710 |
| Guar seed - Dec | Buy | At 2630 | 2670, 2700 | 2610 |
| Soya bean - Dec | Sell | 2305-2310 | 2280, 2260 | 2317 |
| Soya oil - Dec | Sell | Below 466.5 | 463, 460 | 468.9 |
| Mustard seed - Dec | Buy | 590-591 | 594.5, 597 | 587.7 |
| Mentha oil - Nov | Buy | 563-564 | 569, 574 | 561 |
**Strict Stop-Loss *Book Partial Profits
Mutual funds
| Fund focus | ||||||
| Reliance Monthly Income Plan | Invest | |||||
| Fund manager | A Tripathy, Ashwani Kumar | | Min investment | Rs10,000 | ||
| Latest NAV | Rs19.6 | | Entry load | Nil | ||
| NAV 52 high/low | Rs20/14 | | Exit load | 1% <1 year | ||
| Latest AUM | Rs847cr | | Latest dividend (under dividend option) | 1.2% (21-Aug-09)w | ||
| Type | Open-ended | | Benchmark | Crisil MIP Blended | ||
| Class | Hybrid: Monthly Income | | Asset allocation Equity (15%), Debt (77%), Cash (8%) | |||
| Options | Growth & dividend | | Expense ratio | 2% | ||
| | | | | | | |
Initiating Coverage:
CMP Rs105, Target Price Rs91, Downside 13.0%
± Oversupply and weak demand to keep prices under pressure
± Subdued volume growth; margins to contract
± D/E worse compared to peers. Recommend SELL
Event Update: Ultratech Cements Ltd - MP
CMP Rs729, Target Price Rs704, Downside 3.5%
± Ultratech-Samruddhi merger EPS accretive but swap ratio below expectation
± Post merger, UCL capacity to expand to 49mtpa by FY11
± Better market mix to arrest EPS decline; Upgrade to MP
Mutual Funds Thermometer as on November 13, 2009
Given below is the summary of performance of the mutual fund industry in
Key observations
± Equity diversified NAVs ended sharply higher this fortnight after witnessing a decline last fortnight. The category average delivered +4.4% returns, outperforming the BSE Sensex (+4%) this fortnight. Many of midcap and largecap funds outperformed and occupied the top quartile of the category. Among the large corpus, top gainers on a fortnightly basis were Reliance Equity Opportunities Fund (+6.7%), Birla Sun Life Mid Cap Fund (+6.5%), HDFC Equity Fund (+6.3%) and Sundaram BNP Paribas Select Focus (+6.3%).
± On a fortnightly basis, bank-oriented funds topped the sectoral chart delivering an average return of 7%. The only sectoral fund NAV that ended in the red was JM Telecom Sector Fund. Its NAV was down by 1.2% on a fortnightly basis. Many FMCG and Infrastructure underperformed the sectoral category namely Canara Robeco Infrastructure Fund (+1.9%), Sahara Infrastructure Fund (+1.6%) and ICICI Prudential FMCG (0.3%).
± Among the ELSS category, most of funds’ NAVs ended on a positive note. Out of 39 funds, 28 outperformed the BSE Sensex benchmark during this fortnight. Among the large corpus, Birla Sun Life Tax Relief ‘96 outperformed the category and was up by 6.2%. It was closely followed by HDFC Taxsaver Fund (up by5.9%) and Kotak Taxsaver Fund (up by 5.8%) on a fortnight basis.
± Among the balanced fund category, capital protection funds underperformed during this fortnight. On an average, capital protection funds posted a nominal return of 0.9%. However, funds with higher exposure to equity delivered a positive return. Tata Balanced Fund with a return of 5.7% outperformed the Crisil Balanced Fund Index by 200bps. It was followed by Kotak Dynamic Asset Allocation Fund (+5.2%) and HDFC Prudence Fund (+4.4%).
± Among the ETF category, Banks ETF were among the top two funds on a fortnightly basis. Bank BeES and Reliance Banking ETF witnessed a positive growth of ~7.9% on this fortnight. This fortnight, the price of yellow metal spiked to new highs in the domestic and international market. After crossing Rs16,000 this fortnight, gold is now heading towards the Rs17,000-mark per 10 gram. Parallel effect was visible in Gold ETFs on a fortnightly basis, delivering positive returns of 5.5% on a fortnightly basis.
Weekly Update: Debt Market - week ended November 13, 2009
± The yield on 10-year benchmark paper, 6.90% G-Sec 2019, remained steady throughout the week. It ended up by 3bps at 7.34%. Even the shorter tenure bonds yield ended flat during the week.
± However, corporate bonds prices witnessed some rally. 10-year AAA bond yield were down by 11bps at 8.66% vis-à-vis 8.77% in last week.
±
± RBI issued draft guidelines on OTC forex derivatives and allowed banks to offer plain vanilla cross currency options to people who reside in
± WPI inflation index for the month of Oct ‘09 stood at 1.34%, higher than 0.5% in Sept ’09. CPI index for Sept ’09 was also higher mom to 11.7%.
± In Oct ‘09,
Corporate Snippets
± UltraTech Cement has agreed to an exchange ratio of four shares of UltraTech (of Rs 10 each) to every seven shares of Samruddhi (of face value of Rs 5 each). (BL)
± Government expects to raise Rs81bn from 5% stake sale in NTPC through a follow-on public offer. (TOI)
± Oman Oil Company will now pick up additional equity in the 6mn tonne Bina refinery of BPCL for Rs12bn. (BL)
± Tata Motors and Jaguar Land Rover ties up US$250m in distribution financing from GE Capital. (ET)
± ONGC finds a reserve of uranium while carrying out exploration work in an oilfield in
± Nalco plans to enter nuclear power generation and distribution in partnership with Nuclear Power Corporation. (BL)
± L&T Heavy Engineering LLC, a JV of the Zubair Corporation and L&T,
± Tata Steel to start work on its Kalinganar plant in Orissa from December. (BS)
± BHEL and Madhya Pradesh Power Generating Company are close to ink a MoU for a JV to set up a 1,600MW thermal power station in Khandwa district. (BS)
± HDFC acquires a 41% stake in Credila Financial Services, a company that specialises in education loans, for Rs100mn. (ET)
± Air India will get its initial Rs8bn bailout money as equity in the next two months. (BL)
± Gujarat State Petroleum Corp. is raising Rs9bn by placing 5% equity stake with a clutch of financial institutions and
±
± A district court in
± Grupo
± Infosys establishes a separate subsidiary in the
± TCS plans to expand its strategic business alliance with Dow Chemicals. (ET)
± Tata Steel has approved an exchange offer of new FCCBs for the existing investors of US$875mn convertible alternative reference securities due for conversion in 2012. (BL)
±
± Union government is likely to raise Rs290bn from disinvestment in two public sector companies - NMDC and SAIL. (DNA)
± Mahindra Lifespace plans to construct a residential complex at its SEZ –
± GVK Power & Infrastructure will complete the acquisition of a 13.5% stake of its South African partner Bidvest in
± UCO Bank is planning to present to the government a blueprint for acquiring a slightly smaller public sector bank. (BS)
± TVS Motor relaunches the controversial twin spark plug 125cc Flame motorcycle. (FE)
± Nalco shelves its proposed project in
± KSK Energy Ventures has raised Rs5.2bn through QIP issue. (BL)
± Shoppers Stop is planning to raise funds to acquire 32% in group firm and hypermarket chain Hypercity. (DNA)
± Essar Group has signed a definitive agreement to pick up majority stake in Warid Telecom, the Dhabi Group subsidiary in
± Cairn
± A local court has passed an order barring Maytas Properties from using land as collateral for loans. (ET)
± PVR announces it has acquired DLF Group’s DT Cinemas. (BL)
± Essar eyes
± Torrent Pharma plans to invest Rs4.75bn in
± Oriental Bank of Commerce plans to expand its network by opening around 200 new branches each annually in the next three years. (ET)
Economic snippets
± Foreign exchange reserves rose by US$1bn to US$285bn, for the week ended November 6. (BL)
± The 3G and the WiMAX spectrum auction will begin today, with DoT holding a pre-bid conference for prospective bidders. (FE)
± Government is likely to offer public sector shares at a discount to individual investors as part of its disinvestment programme. (BL)
± First monthly report shows WPI doubling to 1.34%. (BL)
± Steel ministry may consider imposing a ban on iron ore exports. (FE)
± For the second time this month, state-owned oil firms hiked ATF prices by 2.4% following a spurt in international oil rates. (TOI)
± Steel production in
± SEBI has allowed stock brokers registered with the exchanges to "transact" in all types of mutual funds, both listed and unlisted. (FE)
± The government plans to free the pricing for import of technology and use of trademark. (BS)
Warm Regards,
Amar Ambani
Please help preserve our environment. Avoid printing this report.
Confidentiality & Disclaimer: This message contains confidential information and is intended only for the individual named. If you are not the named addressee you should not disseminate, distribute or copy this e-mail. Please notify the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system. E-mails are not encrypted and cannot be guaranteed to be secured or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender, which includes India Infoline Limited and its group companies, will not be liable for any errors or omissions in the contents of this message which arise as a result of e-mail transmission. If verification is required please request a hard-copy version. This message is provided for informational purposes and should not be construed as a solicitation or offer to buy or sell any securities or related financial instruments.
No comments:
Post a Comment