Market Mantra
Market outlook
Running out of luck!
Good luck seldom comes in pairs but bad things never walk alone. – Chinese proverb
What a difference a day makes! On Monday, the world markets cheered China's proposed currency reform, firing up the risk trade. But, some of that euphoria seems to be fading already with US stocks closing in the red. In fact, the Dow Jones was up over 100 points at one point.
A downgrade of BNP Paribas by Fitch and loan loss projections for Spanish banks by S&P reminded investors of Europe's debt troubles. The euro retreated from a one-month high against the dollar. The US currency is actually up against the yuan today.
Asian markets are mostly trading down this morning. So, the Indian markets will fall in line with the regional trend at start. Things could turn choppy ahead of Thursday's F&O expiry. While chartists are gung-ho and see 5500 soon, short term oscillators entering into an overbought zone calls for consolidation in range of 5270-5320 before an uptrend resumes.
FIIs have turned buyers again this month after big outflows in May. So, some sideways consolidation is on the cards before the bulls take a shot at new highs.
Trading ideas (Time period: 1-3 days)
ICSA (BUY, CMP Rs145, Target Rs155): ICSA is pointing to continued strength in the weeks to come as it has broken a downward-sloping trend line since early-January 2010. A detailed study of the daily chart shows that the stock has corrected from the high of Rs191 to touch a low of Rs112 in May 2010. On Monday, the stock staged a smart breakout past the downward sloping trendline. This bullish breakout signals the end of the intermediate downtrend, which is further verified with the buy signal in the RSI. A sustained rally past the levels of Rs146 could see the stock attempting its 200-DMA (Rs162). We recommend traders to buy the stock in the range of Rs144-146 with a stop loss of Rs139 for an initial target of Rs155.
GlaxoSmithKline Pharma (BUY, CMP Rs2,123, Target Rs2,300): The stock has given a bullish breakout from symmetrical triangle after consolidating for almost a month. Volumes activity contracted as prices moved near towards its apex. Yesterday's breakout was accompanied with expansion in volumes and formation of bullish engulfing pattern on candlestick may call for a smart rally from the current levels. Bullish crossover in MACD and breakout from ascending triangle in RSI is likely to support the buying argument further. We advise buying at current levels for one week delivery with stop loss of Rs2060 for target of Rs2300.
Derivative strategies (Time period: Till expiry)
± Long JP Power June Future in range of Rs70-71 for the target price of Rs75.50 with a stop loss placed at 68.75.
Lot size: 3125
Remarks: Net maximum profit of 14,062 and net maximum loss Rs7,031.
± Long GT Offshore June Future in range of Rs442-444 for the target price of Rs456 and stop loss placed at 438
Lot size: 500
Remarks: Net maximum profit of Rs6,000 and net maximum loss Rs3,000.
Mutual funds
| Fund focus | |||||||
| ICICI Prudential Dynamic Fund | Invest | ||||||
| Fund manager | S Naren |
| Min investment | Rs5,000 | |||
| Latest NAV | Rs99.8 |
| Entry load | Nil | |||
| NAV 52 high/low | Rs100/66 |
| 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 has become the second refinery to receive crude oil supply through Cairn India and its joint venture partner ONGC's pipeline network. (BL)
± Oil India has secured an extension for petroleum exploration licences for 10 of its 16 independently held blocks in Assam and Arunachal Pradesh. (BS)
± BEML plans to invest Rs6.8bn in the next two to three years for expansion and diversification.(BS)
± Tata Teleservices has suggested that the price of each MHz of excess spectrum beyond 6.2MHz in the 1800 Mhz band should be 1.67 times the 3G price set through the recent auction. (BS)
± The Bajaj-Renault-Nissan alliance's small car project continues to get sidelined as plans of production and branding is yet to take shape. (BS)
± Bharti Airtel has appointed Ogilvy Africa BV as its marketing services partner for its African operations. (ET)
± HCL Technologies denied any plans to merge with the group's computer hardware subsidiary HCL Infosystems. (ET)
± Dewan Housing Finance Corporation stated that IFC has agreed to invest up to Rs200mn by subscribing up to 2mn shares in Aadhar Housing Finance Pvt Ltd. (FE)
± Tata Steel won the environmental ministry approval to expand capacity at its Jamshedpur unit. (ET)
± Reliance Industries several attempts to take over LyondellBasell may not be the final one. The Netherlands-based major expects the bid to come again in the coming years. (BS)
± Cox & Kings (India) plans to raise Rs20bn of equity and debt to fund expansion plans. (ET)
± Nagarjuna Construction is planning to dilute ~49% stake by roping in a foreign partner in the special purpose vehicle executing the 1320-MW coal-fired plant in Srikakulam, Andhra Pradesh. (BL)
± JSW Steel has demanded a stake in the controversial Obulapuram Mining Company or a definite deal to supply iron ore as talks with Karnataka's Reddy brothers for taking over their steel company reach a crucial stage. (ET)
± GMR Group is willing to buy stakes held by minority partners in all the three airports it operates if there is any such offer. (ET)
Economic snippets
± The department of public enterprises has proposed that the finance ministry classify loans to sick state-owned companies as priority sector lending, entitling them to lower interest rates and hastening their recovery. (ET)
± The government is set to simplify Shops and Establishments Act, some of the provisions in the law may be amended or dispensed with. (BS)
± The Union government proposes to switch over to specific rates for value added tax on petrol and diesel instead of the current ad-valorem (percentage) structure. (BS)
± Insurance regulator, IRDA is set to frame new guidelines for ULIP products, to make them more attractive for policy holders. (FE)
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 notencrypted 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 ommissions 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