Market Mantra
Market outlook
Spare some trouble
In order to be happy, think of the ills you have been spared - Joseph Joubert
Waiting on the sidelines may have spared many investors the wild swings of recent days. The Greek storm continues to rattle world markets. Risk appetite has tumbled and will take a while to recover. Public protests are mounting in Greece, stoking concerns whether it will be able to attain the proposed cuts in budget deficit. Other members of 'PIIGS' like Spain and Portugal are staring at further downgrades. The idea of EU as a unified bloc and euro as common currency has taken a beating. Let's hope the crisis subsides sooner than later.
We expect some more trepidation at start today. Things might stabilize later, especially if global markets rebound. Global sentiment could improve if US monthly jobs data turns out to be strong. As of now, taking a decisive call is best postponed, though one may dabble with few counters for long-term purpose. Technically, the NSE Nifty has support at 5000 though a break below 200-day DMA of 4950 could potentially drag it down further. Resistance is seen around 5300.
Trading ideas (Time period: 1-3 days)
Indian Bank (BUY, CMP Rs233, Target Rs245): On the daily chart, the stock has given a bullish breakout and formed a bullish Candlestick pattern. It suggests that its short-term trend has turned up. Over the last one week, the stock was consolidating in the range of Rs208-228. On Wednesday, the stock crossed above the upper end of this trading band. The upmove was well supported by healthy volumes, which suggest accumulation. Further, supportive technical oscillators are also positive. We recommend traders to buy the stock at current levels and up to the levels of Rs227-233 for an initial target of Rs245. It is advisable to maintain a stop loss of Rs222.
Patni Computers (BUY, CMP Rs609, Target Rs625): A detailed analysis of the volumes of Patni Computers reveals that maximum interest has been displayed by the traders in this stock since March 2010. Prior to the yesterday's breakout from resistance zone of Rs590-594, the stock had been on a downward curve. It fell from a peak of Rs594 to the support of its 50-day DMA and than staged a sharp rally. The daily momentum oscillators i.e. RSI and MACD are suggesting strength in the upmove. Keeping in mind the above-mentioned evidences, we suggest high risk traders to buy the stock between the levels of Rs606-610 with a strict stop loss of Rs598 for a short-term target of Rs625.
Derivative strategies (Time period: Till expiry)
± Short Tata Communication May Future @ Rs267-266 for the target price of Rs255 and stop loss placed at Rs273
Lot size: 525
Remarks: Net maximum profit of Rs6,300 and net maximum loss Rs3,150.
± Long HCL Tech May Future @ Rs407 for the target price of Rs416 and stop loss placed at Rs401
Lot size: 1,300.
Remarks: Net maximum profit of Rs11,700 and net maximum loss Rs7,800.
Mutual funds
| New Fund Offer | |||||
| DSP BlackRock Focus 25 Fund | Subscribe | ||||
| Fund manager | Apoorva Shah |
| Min investment - Retail | Rs5,000 | |
| NFO dates | April 23 – May 21, 2010 |
| Entry load | Nil | |
| NAV | Rs10 |
| Exit load | 1% <1yr<Rs5cr | |
| Type | Equity – diversified |
| Registrar | CAMS | |
| Class | Open – ended |
| Asset allocation: |
| |
| Options | Growth & dividend |
| Equity & Equity related securities | 65-100% | |
| Benchmark | BSE Sensex |
| Debt and money securities | 0- 35% | |
Sector Update: Steel
± World steel expects steel demand to grow 10.7% yoy in 2010 and 5.3% yoy in 2011
± Indian steel consumption to increase 13.9% yoy
± Steel prices correct after touching US$700/ton
Corporate Snippets
± ICICI Bank, others in talks to buy-out Tayals stake in Bank of Rajasthan. (ET)
± SAIL is planning to set-up a power plant and another greenfield steel mill in eastern India. (FE)
± Bharti Airtel has entered into a partnership with cloud computing service provider Novatiun to expand its broadband business in India. (ET)
± JSPL's bid for Ziscosteel has been rejected. (BS)
± Maharashtra governments' cabinet sub-committee to meet today to resolve the Tata Power-Reliance Infra row over supplying electricity in Mumbai. (ET)
± Government to sell stake in 10 more PSU this year including IOC, MMTC, Coal India, SAIL, RINL and SCI. (ET)
± HCL Tech has entered into a pact with Stellar Asia Pacific to offer business services to clients in Australia. (ET)
± Bajaj Finserv to launch a wealth management business for retail customers in Q2 FY11. (BS)
± JSW Steel hikes prices of HR and CR coils by 1.5%. (FE)
± The Patni brothers are likely to sell a large chunk of their shares to Japanese systems integrator NTT Data. (ET)
± Yes Bank to tap SMEs for inclusive growth. (FE)
± Orchid Chemical has signed an outlicensing distribution deal with US based Alvogen for marketing its 8 oral non-antibiotic formulation in US. (BS)
± Kirlosker Brother has bought 90% stake in South Africa based Braybar pumps for Rs110mn. (BS)
± 3i Infotech to shift focus on IT solutions and Transaction Services business. (FE)
± Kalpataru Power raises Rs4.5bn through a QIP issue. (BS)
± Gayatri Projects has secured a road project worth Rs22bn from Andhra Pradesh government. (BS)
± Ansal Properties to invest Rs15bn over the next three years on housing projects in Haryana. (BS)
± Jagran Prakashan to buy Mid-day Multimedia for Rs2bn in an all stock transaction. (ET)
± Shoppers Stop has lined up a capex of Rs1.25bn to open 12 stores in the current fiscal. (ET)
± Piramal Healthcare has closed down its laboratory in Delhi and laid-off about 60 people. (ET)
Economic snippets
± Finance Ministry has decided to pay Rs140bn to state-owned OMCs as part compensation for selling kerosene and cooking gas below cost in FY10. (ET)
± Growth in non-food credit for the fortnight ending April 23rd stood higher at 17.5%. (FE)
± The annual ECB cap has been raised to US$40bn for FY11 from US$35bn in FY10. (ET)
± Government to ease stock holding limit for large sugar consumers from May 20. (BS)
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