An Over Sold Bounce is Due
Derivative strategies: CUMMINSIND, IDBI, BHARATFORG
Derivative strategies: ACC, PFC, HCLTECH
Technical calls: Cummins India, NB Ventures
Technical Calls: Siemens, Jindal Steel, DLF
Bearish `Island Reversal` in Nifty Future
10 Jun 2010, 0700 hrs IST,HARISH RAO,ET Bureau
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Heard on the Street
Trading in shares of KPIT Infosystems was frozen at the upper end of the 20% intra-day circuit filter, after there were only buyers in the stock. Last week, the company had formed an equal joint venture with Bharat Forge for a hybrid technology designed to improve fuel efficiency of vehicles.
According to a note by domestic broking firm Paid Leave (PL), the joint venture is targeting revenues of Rs 300-500 in FY12, with an operating margin of 15-18%. But PL thinks this is a very conservative estimate. Strangely, PL has assigned an ‘accumulate’ rating to the stock, instead of a full-fledged ‘buy’ rating.
Leading domestic broking house Info Lion is said to have been a big buyer in the stock, though it couldn’t be ascertained if it was making the purchases on behalf of its institutional or non-institutional clients. KPIT shares closed at Rs 129.50 on the NSE, with nearly 77 lakh shares being traded. Less than a fifth of that volume resulted in delivery.
Fatpipe extends IPO bid date on low turnout
The initial public offer of Fatpipe Networks has been extended till Monday due to a low investor turnout. The company has also changed the price band of the issue from Rs 82-85 to Rs 80-85, according to merchant bankers. The issue was subscribed just 0.7 times.
According to brokers, a couple of HNIs and an institutional buyer, who had invested in the IPO, wanted to back out from the bidding process. However, merchant bankers of the issue denied any such incident.
“Investors have not backed out of the issue. The only problem we faced was when one bid came in past the IPO subscription deadline,” said a senior official of Keynote Corporate Services, the banker to the issue.
Outlicensing deal hopes trigger rally in Orchid Chem
Shares of Orchid Chemicals and Pharmaceuticals rose nearly 3% to Rs 144.35 with good volumes on Wednesday. The buzz is that some traders have taken up positions ahead of the company’s press conference on Thursday, anticipating some positive announcement. They are hoping the company may announce an outlicensing deal. When contacted, a senior company official declined to comment on market speculation.
(Contributed by Santosh Nair, Shailesh Menon & Deepali Gupta)
Fortis Healthcare - another fundraising
Daily Market Outlook - June 10 2010
Mahindra and Mahindra - acquisition moves strengthening
Jubilant Foodworks, Hindalco, Sadbhav Engineering
Hero Honda - riding strong, Shoppers Stop - consumer growth powers on
Educomp Solutions Limited - the leader in education
Rakesh Jhunjhunwala Interview - bullish on India
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Tech view: Strength above 5053
As expected the bulls tried to fight back, however, global cues once again played spoilsport. The European markets which weakened in late noon deals, forced our markets to pare gains. The Sensex finally ended with a gain of 40-odd points at 16,658. The NSE Nifty was up 13 points at 5,000.
As things stand, the markets are trapped in an extremely narrow band - within the 20-days and 50-days DMA (Daily Moving Averages). In case of Sensex it is 16,650-16,840 and on Nifty 4997-5053. Longer the markets trade below the short-term moving averages, difficult it would get for them to bounce back. Hence one needs to watch the 20-days DMA as key reference point for future trend.
Today, the Nifty is likely to find support around 4,975-4,955, while face resistance around 5,025-5,045.
TRADING DESK
Yes Bank
Current Price: Rs 279,
Target Price: Rs 292
The stock has seen a correction to a key support. It appears to be in an inter-mediate uptrend. It has the potential to bounce till 290-295 levels in the next upmove, which could be tomorrow. Keep a stop at 276 and go long. Increase the position between 284 and 286, and start booking profits above 290. If the stop at 275 is broken however, the stock could fall till 269 and below that, 263.
Tata Motors
Current price: Rs 728,
Target Price: Rs 710
The stock is seeing heavy selling beyond the 730-mark. It has a likely downside till 705-710 level and it should test support at the top end of that band as a minimum target. Keep a stop at 735 and go short. Increase the position below 720 and reset the stop loss to 724. Clear the position below 710. Note that if 735 is exceeded, the stock could jump to 750. So consider going long if the stop is broken.
Nifty
Current price: 5,000.3,
Target Price: NA
The index is at key support. If its trades below 4,975, it could fall all the way till 4,800. On the upside, there's serious resistance at 5050 and above but if that is broken, a rise till 5,175 is possible. Two option spreads are tempting with a 2 session perspective. A long 5,100c (59) and short 5,200c (25) costs 34 and pays a maximum of 66. A long 4,900p (71) and short 4,800p (49) costs 22 and pays a maximum of 78. The bearspread has the better ratio.
Src: ET, DP blog , Smartinvestor, HDFCSec, Valuenotes and etc