Market Mantra
Market outlook
Testing Thursday!
You can't choose the ways in which you'll be tested. - Robert J. Sawyer
Indices seem to be testing the recent tops and the charts point to faltering momentum after six days of gains indicating a temporal pause to the uptrend. Indian markets are likely to consolidate in a sideways fashion around the 5100 levels in the wake of an extremely muted session on Wall Street. Trend in Asia is mixed. The Nikkei is down while Hong Kong and Shanghai stocks are up as they resumed trading after a holiday.
Markets in Europe managed slim gains amid optimism that the debt-strapped nations in the region are tackling the crisis well. But, stocks in Spain declined on reports that it was seeking bailout money. The IMF and the government in Madrid have denied any such plans. The euro is stable around $1.22 while crude is hovering around $77.
Though there has been some relief over the sovereign debt situation in the euro-zone the problem is far from over. It may drag on for many months. Keep that in mind before taking large bets. Back home, the monsoon picture seems to be pretty as of now. Hopefully it would be able to sooth a few frayed nerves after the recent spike in inflation.
Trading ideas (Time period: 1-3 days)
Colgate Palmolive (BUY, CMP Rs830, Target Rs860) Colgate Palmolive continues to remain in steady uptrend on long term chart and has shown an encouraging price pattern in its weekly chart. A breakout from rising channel to acts a catalyst for sharp up move from here on with another channel seen at higher levels in range of Rs795-920. On the daily chart, breakout from pennant formation is likely to trigger a rally in the stock with immediate target seen at Rs866. One can buy the stock at current levels of Rs830-836 with stop loss of Rs810 for target of Rs860.
Glenmark Pharmaceuticals (BUY, CMP Rs270, Target Rs288) The stock is in the process of forming a variant of morning star pattern on weekly chart after prices opened above the real body of hanging man on Monday. A move above Rs272 on daily chart will signal a breakout from short term resistance line and open gates for smart movement ranging from 5-7%. Medium term moving average of 50DMA will act as solid support from hereon. Hence, we advocate buying stock above Rs272 with stop loss of Rs265 for target Rs288.
Derivative strategies (Time period: Till expiry)
± Short M&M June Future in range of Rs633-634 for the target price of Rs613 with a stop loss placed at 643.
Lot size: 624
Remarks: Net maximum profit of 12,480 and net maximum loss Rs6,240.
± Long Voltas June Future in range of Rs184-185 for the target price of Rs195 and stop loss placed at 180
Lot size: 2700
Remarks: Net maximum profit of Rs27,000 and net maximum loss Rs13,500.
Mutual funds
| Fund focus | |||||||
| ICICI Prudential Dynamic Fund | Invest | ||||||
| Fund manager | S Naren |
| Min investment | Rs5,000 | |||
| Latest NAV | Rs98.7 |
| Entry load | Nil | |||
| NAV 52 high/low | Rs99/66 |
| Exit load | 1% <1 yr | |||
| Latest AUM | Rs2,160cr |
| Latest dividend (under dividend option) | 12% (Feb 15, 2010) | |||
| Type | Open-ended |
| Benchmark | S&P CNX Nifty | |||
| Class | Equity – diversified |
| Asset allocation | Equity (83%), Debt (0%), Cash (17%) | |||
| Options | Growth & dividend |
| Expense ratio | 2% | |||
Corporate Snippets
± Reliance Industries plans to build large power plants in India. (BL)
± Reliance Capital picks up 18% stake in Bloomberg UTV. (BL)
± RCom looks to selling 26% stake in Globalcom. (BL)
± NTPC is scouting for coal fields in Australia. (ET)
± IOC, HPCL have signed contracts with RIL for KG gas. (ET)
± US distributor sues M&M for delay in launching SUV. (BL)
± SBI is planning to introduce wealth management services in a phased manner in 2010-2011. (BL)
± Cipla to partner Chinese companies to sell Roche, Amgen drug clones. (ET)
± Khazanah set to buy Aman Resorts from DLF. (ET)
± Punj Lloyd Singapore arm bags Rs13.9bn project. (ET)
± Fortis gets time till July 30th to decide on counter offer for Parkway. (BL)
± Government plans to divest 10% stake in Neyveli Lignite. (BL)
± Essar Oil raises US$115mn from FCCBs to part-finance its expansion plans. (BL)
± TCS has won a multi-year outsourcing deal from Telenor Norway. (BL)
± Orient Paper will be re-starting its 1mtpa paper plant in Madhya Pradesh. (BL)
± Procter and Gamble (P&G) said increase may provide a boost to sales growth in the next fiscal year. (BL)
± Suven Life Sciences has secured two products patents from the 'Japanese Patent Office'. (BL)
± Surana Power is planning to set-up two thermal power plants with an outlay of Rs26.4bn in Raichur. (ET)
± Adani Group arm starts drilling in Cambay. (BL)
Economic snippets
± RBI to buyback government bonds upto Rs200bn. (BS)
± Telecom companies to invest US$40bn this year to develop 3G, BWA networks. (ET)
± Direct Tax Code (DTC) re-thinks on cut in tax exemptions. (BS)
± Government allows sugar exports to European nations. (BS)
Advance tax numbers
| Company (Rs cr) | Q1FY11 | Q1FY10 |
| SBI | 869 | 1,069 |
| BHEL | 400 | 320 |
| HDFC Bank | 315 | 250 |
| NTPC | 280 | 276 |
| Bank of Baroda | 225 | 210 |
| Bharti Airtel | 179 | 100 |
| Union Bank | 168 | 104 |
| OBC | 140 | 70 |
| TCS | 128 | 53 |
| REC | 128 | 88 |
| PFC | 127 | 110 |
| Bajaj Auto | 110 | 50 |
| Hero Honda | 76 | 65 |
| Ambuja Cement | 65 | 70 |
| HPCL | 61 | 15 |
| Siemens | 60 | 70 |
| ACC | 50 | 60 |
| Yes Bank | 50 | 27 |
| GIC | 46 | 17 |
| Nestle India | 44 | 38 |
| Castrol India | 39 | 27 |
| Crompton Greaves | 38 | 28 |
| Ranbaxy | 18 | 15 |
| Century Textiles | 17 | 12 |
| Lupin | 16 | 11 |
| Colgate Palmolive | 15 | 8 |
| Pfizer | 11 | 9 |
| Suzlon | - | 35 |
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