Market Mantra
Market outlook
This is it!
In a world filled with despair, we must still dare to dream. - Michael Jackson
There's not much despair on the street as the bulls managed to eke out slim gains after a fairly insipid session on Wednesday. With the global cues not supportive, it is not really easy to Just Beat It, especially with F&O expiry. While India's macro fundamentals are sound, the smooth criminal remains the external scenario.
The start will be shaky with no decisive cues coming from Wall Street and European markets finishing in red. Fed has kept its key rates steady. The FOMC continues to see a gradual recovery though it remains worried about the housing market and the euro-zone debt crisis. ABG Shipyard, Core Projects and Orbit Corp will be added to the F&O segment.
Manufacturing growth in the debt-strapped euro-zone slowed to a four-month low in June. Exports in Japan rose 32% yoy in May but were below forecast. Markets in Asia are mixed, with the Hang Seng slipping while other benchmarks are holding in green.
A lot of action was seen outside the main indices. That trend may continue but we would like to remind you that dealing in some of these counters remains Dangerous.
Trading ideas (Time period: 1-3 days)
Opto Circuit (BUY, CMP Rs242, Target Rs260): Recent price behavior of Opto Circuit from the month of February 2010 till date has been oscillating in narrow channel having a positive slope. Prices have violated the resistance line of rising channel and have closed above Rs240 in yesterday's trade. Thus this breakout should be viewed as positive move accompanied by bullish belt hold pattern on daily candlestick chart. Prices thus are expected to enter into a new trading zone from here on with earlier resistance of Rs238-240 acting as strong support. We advise buying stock at current levels with stop loss of Rs234 for target of Rs260.
Harrisons Malayalam (BUY, CMP Rs128, Target Rs139): The stock has seen impressive volume in yesterday's trading session and appears to have taken support between Rs123-125 zone. It could bounce till somewhere between Rs138-140 levels in the near term. Bullish white candlestick appearing in yesterdays session along with spurt in volumes has taken the stock above its 200-DMA, suggesting that the consolidation phase is completed and price is likely to approach levels of Rs140 in coming days. We recommend traders with high risk appetite to buy the stock in the range of Rs127-129 for a target of Rs139. A stop loss of Rs122 should be maintained on all long positions.
Derivative strategies (Time period: Till expiry)
± Short Hero Honda June Future in range of Rs2040-2043 for the target price of Rs2000 with a stop loss placed at 2060.
Lot size: 200
Remarks: Net maximum profit of 8,000 and net maximum loss of Rs4,000.
± Short BHEL July Future in range of Rs2450-2452 for the target price of Rs2400 and stop loss placed at 2475
Lot size: 125
Remarks: Net maximum profit of Rs6,250 and net maximum loss of Rs3,125.
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
± Tata Motors is considering raising Rs25bn via equity or FCCB to trim debt pile. (ET)
± RCom may sign a 5-year deal with Africa's Attijariwafa Bank for managing the bank's Ethernet services. (BS)
± NTPC seeks 30mmscmd more of gas for expansion of gas based power projects. (DNA)
± SAIL in talks with Japan's Kobe Steel for a technological deal. (DNA)
± IOC to start processing crude oil produced from Cairn India's Rajasthan block at its Panipat Refinery. (DNA)
± Vivendi SA, Europe's largest entertainment group denies interest to buy a 26% stake in RCom.(mint)
± Shree Renuka Sugars has signed a revised agreement to acquire a majority stake in Brazilian firm, Equipav for Rs11.5bn, 25% lower than price agreed before. (ET)
± Patni Computers has denied any plans to sell their stake in the company. (ET)
± PNB to pick up 58% partners' stake in life insurance business. (ET)
± ING to sell its entire 3.1% stake in Kotak Mahindra Bank to raise US$173mn. (ET)
± Financial Technologies hints at shedding stake in National Spot Exchange (NSEL) to 26%. (ET)
± Bank of Rajasthan board to meet today to take forward the process of its merger with ICICI Bank. (BS)
± Raymond to exit home retail business. (DNA)
± Titan Industries is planning to open 50 Titan Eye Plus stores in the current fiscal. (DNA)
± Gitanjali Lifestyle, a retail arm of Gitanjali Gems plans to open up a 100 watch stores in next three years. (BS)
± Emami has bought a manufacturing unit in Egypt for Rs120mn to manufacture all its personal care products and distribute them in West Asia and Africa. (BS)
± Essar Shipping is planning to raise US$250mn via FCCB issue. (DNA)
± Birla Corp to invest Rs24bn to boost its total cement capacity to 13mtpa. (DNA)
Economic snippets
± The empowered group of ministers is expected to clear the proposal of a revision in petro goods prices at its meeting scheduled on 25th June. (ET)
± Interest rate may go up any time says Pronab Sen, Chief Statistician of India. (ET)
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