Market Mantra
Market outlook
Nothing unusual here
"If you are not willing to risk the unusual, you will have to settle for the ordinary." – Jim Rohn.
Unusually uncertain - that is how Federal Reserve chairman Ben S Bernanke sees the prospects for the US economy. Wall Street was doing just fine until Bernanke's latest assessment – a guarded view of the world's largest economy - sent US stocks into a tizzy. A mixed bag of earnings from some of the top American companies added to the woes.
Thankfully, Asian markets don't appear to be too perturbed about Bernanke's comments and the ensuing fall on Wall Street. Chinese shares are up fourth day in a row, while others are flat to slightly negative. Also, European markets managed to eke out small gains. So, we expect a sluggish opening for India. As usual, the end will hinge on few earnings and global cues.
It has been a long consolidation phase for our markets and the same may persist for some time to come. Try churning your portfolio to beat this listless trend. A new, secular bull run may take a while to materialize. Till that happens, there is no escape from the current sideways pattern.
Trading ideas (Time period: 1-3 days)
PTC India (BUY, above Rs113, Target Rs119): On Wednesday, the stock surged sharply on impressive volumes above its 200-day DMA. It now faces a resistance at Rs120 levels and should have a minimum upside till that level. Our argument is further validated after the stock gave an upside breakout in yesterday's session as the price broke through the top of a trading range. The stock has rallied smartly from a low of Rs98 in early July 2010 to the present levels. The daily RSI is already in strong buy mode, indicating that the prices are set to rally from the current levels. We recommend traders with high risk appetite to buy the stock above Rs113 for a target of Rs119 with stop loss of Rs110.
Lupin (BUY, CMP Rs1,878, Target Rs1,930): After forming bullish piercing line pattern on candlestick last Friday, the stock is moving sideways in the range of Rs1,855-1,885. Yesterdays close above Rs1,872 accompanied with sporadically high volumes has signaled a breakout on line chart. Stochastic oscillator has already entered in the positive terrain however; RSI is yet to show a positive crossover despite giving a breaking above from falling resistance line. Buy stock above Rs1,888 with stop loss of Rs1,875 for a target of Rs1,920.
Derivative strategies (Time period: Till expiry)
± Long ACC July Future in range of Rs818-819 for the target price of Rs838 with a stop loss placed at Rs808.
Lot size: 250
Remarks: Net maximum profit of Rs5,000 and net maximum loss Rs2,500.
± Long Ultratech Cement July Future in range of Rs849-851 for the target price of Rs869 and stop loss placed at Rs.839.
Lot size: 250
Remarks: Net maximum profit of Rs5,000 and net maximum loss Rs2,500.
Mutual funds
| Fund focus | |||||||
| HDFC Top 200 Fund | Invest | ||||||
| Fund manager | Prashant Jain |
| Min investment | Rs5,000 | |||
| Latest NAV | Rs198.5 |
| Entry load | Nil | |||
| NAV 52 high/low | Rs199/135 |
| Exit load | 1% <1 yr | |||
| Latest AUM | Rs8,020cr |
| Latest dividend (under dividend option) | 40% (Mar 12, 2010) | |||
| Type | Open-ended |
| Benchmark | BSE200 | |||
| Class | Equity – diversified |
| Asset allocation | Equity (97%), Debt (0%), Cash (3%) | |||
| Options | Growth & dividend |
| Expense ratio | 1.8% | |||
Corporate Snippets
± DoT to issue show-cause notices to Idea over six overlapping licences. (ET)
± HDFC and Kotak Bank to rework profit forecast for insurance arms. (ET)
± SKIL may make open offer to Everonn investors today. (ET)
± ONGC, Oil India, GAIL and IOC have combined forces to acquire BP's stake in Vietnam gas project. (BL)
± L&T has completed manufacturing the first India-made nuclear grade canister for Transnuman clear Inc. (BL)
± Adani Power sets up subsidiary for 3,300MW Bhadreshwar plant. (BL)
± TCS expects IT spending to shoot up. (ET)
± DLF plans to exit retail venture. (BS)
± Ranbaxy to sell Daichii Sankyo's anti-bacterial drug in two countries. (BL)
± BHEL, GE unit sign pact for oil, gas compressors. (BL)
± Indian Hotels re-assessing product mix for resort/spa project in Phuket. (BL)
± Low-cost air carriers Indigo, Spicejet and GoAir are set to nearly double their fleet capacity over the next 17 months. (BS)
± Rolta to make night goggles for defence sector. (BL)
± The cabinet is likely to take up the PowerGrid FPO today to raise up to Rs30bn. (BS)
± Actis to buy Halonix's lighting business. (ET)
Economic snippets
± Finance Minister unveiled a three-year plan for moving to a single-rate goods and services tax (GST) regime of 16% for the centre as well as states. (BS)
± RBI may prescribe a higher capital requirement for banks from financial year 2012-13. (BS)
± TRAI plans to cap the monthly subscription charges for cable TV services at Rs250 across the country. (BS)
± Government asks Telecom operators to address gear security issues. (ET)
Results table
| Company (Rs mn) | Sales | % yoy | PAT | % yoy |
| Bajaj Auto Fin | 2,701 | 63.9 | 468 | 207.6 |
| Yes Bank | 2,622 | 67.2 | 1,565 | 56.3 |
| Thermax | 7,788 | 49.0 | 662 | 42.3 |
| Esab India | 1,218 | 16.1 | 165 | 1.8 |
| TVS Motors | 13,696 | 40.4 | 404 | 122.8 |
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