Market Mantra
Market outlook
Right at start!
Money will come when you are doing the right thing.
The right thing appears to be really on a long holiday. The key indices have gone nowhere in the past 3-4 weeks and the trend has been extremely dull. Traded volume too has tapered off and is likely to remain low in the face of the upcoming holidays.
Thanks to firm global cues, we expect a higher opening and another choppy day. Can’t call it Christmas shopping, though! On the whole, the current lackluster trend is expected to continue. The Nifty will find some support and could surpass the 5000 mark again. The near-term trading range may be between 4900-5100.
Volatility will prevail given the murky outlook and F&O expiry next week. Stock centric action will continue based on the news flow. Short term traders are likely to take profit at every rise. A major break down is ruled out for now but avoid risky bets. Don’t read too much into what goes in the market these days as bulls and bears both seem to be lacking conviction.
Trading ideas (Time period: 1-3 days)
IVRCL Infra (BUY, CMP Rs349, Target Rs370): The stock has seen impressive volume expansion in yesterday’s trading session and appears to have taken support between Rs334-335. It could bounce till somewhere between Rs362-363 levels in the near term, i.e. 100-DMA for the stock. Our argument is further validated after the stock recovered from the low of Rs335 in yesterday’s session. Any move above Rs361 could take the stock towards Rs380 and higher in the short-term. Traders are advised to maintain a stop loss of Rs340 and go long. Book partial profit around Rs362 and exit around the levels of Rs370.
Sasken (BUY, CMP Rs185, Target Rs200): The stock had been facing stiff resistance around the levels of Rs183-184 from last four months. On Monday, the stock overcame the crucial resistance levels and closed above it. The upmove was accompanied with heavy volumes. In fact, the volumes recorded were the highest since October 2009. Moreover, on the weekly chart, the price movement has formed a higher bottom formation. A move past the Rs190 will see the formation of a higher top, which will confirm the basic bullish set up. We expect the stock to rally in the medium term. Traders can accumulate the stock in the range of Rs183-187 for a target of Rs200. It is advisable to maintain a stop loss of Rs178.
Derivative strategies (Time period: Till expiry)
± Long NTPC Dec Future @ Rs209 for the target price of Rs218 and stop loss placed at Rs205.
Remarks: Net maximum profit of Rs14,625 and net maximum loss Rs8,125.
± Long DISH TV INDIA Dec Future @ Rs42 for the target price of Rs45 and stop loss placed at Rs40.50.
Remarks: Net maximum profit of Rs15,450 and net maximum loss Rs7,725.
Commodities – Metals (Time period: Intra-day)
Trade recommendation
| Commodity | Strategy | Levels | Target | Stop-Loss |
| Gold - Feb | Sell | Below 16670 | 16630, 16580 | 16705 |
| Silver - Mar | Sell | Around 27050 | 26900, 26770 | 27170 |
| Copper - Feb | Sell | Around 328 | 325, 321 | 330.5 |
| Zinc - Dec | Buy | 112.8-113 | 114.3, 115.8 | 111.9 |
| Lead - Dec | Sell | 109-109.3 | 107.5, 106 | 110.1 |
| Aluminum - Dec | H. Buy | At 103.5 | 104.8, 106.3 | 102.7 |
| Nickel - Dec | Buy | 825-830 | 844, 858.5 | 814.6 |
| Crude Oil - | Sell | Below 3450 | 3420, 3400 | 3470 |
| Natural Gas - Dec | Buy | Above 265.5 | 268.5, 272 | 263.2 |
Commodities – Agro (Time period: Intra-day)
Trade recommendation
| Commodity | Strategy | Levels | Target | Stop-Loss |
| Pepper - | H. Buy | 14300-14330 | 14477, 14600 | 14190 |
| Jeera - | Buy | Above 15300 | 15430, 15650 | 15190 |
| Turmeric - Apr | Buy | Above 7080 | 7120, 7150 | 7047 |
| COCUDAKL - | H. Sell* | Around 1210 | 1198, 1185 | 1219 |
| Chana - | Sell | Below 2485 | 2450, 2430 | 2508 |
| Guar seed - | Sell | At 2700 | 2670, 2650 | 2720 |
| Soya bean - | H. Sell | Below 2390 | 2360, 2335 | 2410 |
| Soya oil - | H. Sell | Below 477.5 | 474.5, 471.7 | 479.8 |
| Mustard seed - | Sell | Below 595 | 592, 585 | 597.8 |
| Mentha oil - Dec | Buy | 589-590 | 593, 596 | 587.2 |
**Strict Stop-Loss *Book Partial Profits
Mutual funds
| Fund focus | |||||||
| Sundaram BNP Paribas Select Midcap Fund | Invest | ||||||
| Fund manager | S. Ramanathan | | Min investment | Rs5,000 | |||
| Latest NAV | Rs129.8 | | Entry load | Nil | |||
| NAV 52 high/low | Rs133/49 | | Exit load | 1% <1 year | |||
| Latest AUM | Rs1,769cr | | Latest dividend (under dividend option) | 15% (20-Nov-09) | |||
| Type | Open-ended | | Benchmark | BSE Midcap | |||
| Class | Equity-diversified | | Asset allocation | Equity (89%), Debt (0%), Cash (12%) | |||
| Options | Growth & dividend | | Expense ratio | 2% | |||
| | | | | | | | |
Company Update: Hotel Leelaventure – SELL
CMP Rs43, Target Price Rs35, Downside 18.3%
An improvement in H2 FY10 occupancies across room portfolio coupled with steady average room rates (ARRs) has been key to Hotel Leela’s recovery from amongst the worst downturn in the hospitality industry. Even so, Mumbai and
Corporate Snippets
± M&M signed a joint venture agreement with Yueda Group,
± Tata Motors plans to roll out hybrid city buses which are aimed at providing eco-friendly transportation solutions. (FE)
± Reliance Infrastructure is on track to commission over Rs100bn worth of infrastructure projects in the next seven months. (BS)
± TVS Motor plans to launch diesel auto-rickshaws as part of its strategy to grow in the domestic market. (ET)
± Nava Bharat Ventures acquired a 65% equity stake in Maamba Collieries Ltd (MCL) of Zambia at a total outlay of US$26mn. (BS)
± The Orissa government has granted Prospecting License (PL) in favour of Bhushan Steel over an area of 280.755 hectares spread over Marsuan,Tiriba and Narasinghapur villages in Keonjhar district. (BS)
± S Tel, the latest entrant in the Indian cellular market, aims to be present in six telecom circles of the country by the end of 2010. (BS)
± Fortis Healthcare, post-acquisition of 10 hospitals from the Wockhardt group, will spend around Rs2.5bn to complete the ongoing hospitals in Mumbai, Kolkata and
± Ranbaxy Laboratories plans to market an antihypertensive originally, discovered by Daiichi Sankyo, in six African countries. (BL)
± Tata Realty And Infrastructure Ltd (TRIL), a wholly owned subsidiary of Tata Sons, plans to develop the Rs35bn ‘Ramanujan IT City' in Chennai. (BL)
± Aegis Logistics has acquired Shell Gas (LPG)
± Fortis will expand and add 600 beds in the first half of 2010. (FE)
± Ansal Properties plans to raise Rs6bn through qualified institutional placement. (ET)
± Ranbaxy labs to launch its parent companies anti-hypertensive drug, Olmesartan Medoxomil, in six African countries under the brand name — Olvance. (ET)
Economic snippets
± Indirect tax receipts for eight months (April-November 2009) dipped 21% to Rs1,458bn. (BS)
± Nuclear Power Corporation has projected an investment of Rs10,000bn for nuclear capacity addition of 10,000MW by 2020. (BS)
± The advance tax collection from India Inc rose 20% in the first nine months of FY10, compared to the same period last year, with automobiles, consumer goods and metals leading the pack. (BS)
± The life insurance industry logged a 21% yoy increase in premium collections during the first seven months of FY10. (BS)
± The empowered Group of Ministers decided that auctions for 3G mobile spectrum will take place in January and will be given to four successful bidders excluding BSNL and MTNL. However, all the successful bidders will get 3G spectrum simultaneously only in August 2010. (BL)
± The Petroleum Minister has sought oil bonds worth Rs208bn to partially compensate the public sector OMCs for selling cooking fuels below the market price during the three quarters of the current fiscal. (BL)
± The government is set to accept the recommendations of a ministerial group and ban FDI in tobacco, dealing a blow to the plans of international tobacco firms that have long eyed a bigger presence in the Indian market. (ET)
± The companies are rushing to buy-back FCCBs as deadline set by RBI for repurchase of these securities ends this month. (ET)
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