Srisai's Instinct Stock Calls for Dt: 10.11.2009
This(Srisai's Instinct Stock Calls) will be a New Initiative of this blog to Publish Blog Author's Own Investment/Trading Calls for Short-Medium Term perspective. But All these Calls are not given on Purely Technical perspective. Most of these Calls are given by Blog Author from His past Investment/Trading experiences. So Do not expect More depth in Calls. Author has tried his best to give some calls for the benefit of Investors/Traders from his experience and from some media/web/news based call. So author request all the investors/traders to take/try these Calls as RISK CALLS. And Keep Strict Stop Loss Own (or) Keep Resi,Supp levels As Stop Loss for their Trading(or) Trade/Invest @ your Own Financial Risk. All type of Comments are Welcome about this New Initiative. Dont Forget to Keep Stop Loss and Again Author Remembering you that he is giving calls only from his past trading experience...
Nifty Future cmp 4906
Already NF has run nearly 10% from Recent low of 4538 levels... And 20 DMA is at 4930 levels.. PCR Ratio nearly at 1.40 levels(Slightly overbought)... Resi @ 4930-4957-4970 levels... Be cautious for next three sessions ahead of IIP Data, Inflation Data which is on November 12th... So Long traders are advised to HEDGE their LONG Positions with 4800 PE option..... Supports at 4905-4880-4864 levels...
GSPL cmp 91
Stock has breached 90 level and closed above that 90 after long time.... So If 87-90 holds with Good voulmes then can see 100-110 levels soon.... Supports at 84-78-72 levels....
Hindalco cmp 129
It seems stock has support at 117-108 levels... Resi @ 137-140 levels.. If it crosses that 140 levels, then could see 177 target in medium term... Buy for Medium term investments...
PiramalHealthcare cmp 397 (outside call)
Breakout above 408 could make stock target to 414-421-430 levels....
IDBI cmp 124
Looks good at this level... Buy this Stock with 113 as Strict StopLoss and Go LONG....
By
Srisai
10 November 2009
Morning Views from ET etc
Financial, industrial stocks will do a lot better: Ridham Desai
Ridham Desai, the chief India equity strategist at Morgan Stanley, says stocks will be volatile in the near term and that — after the
spectacular run-up this year — further gains will be muted in 2010. In an exclusive interview with ET NOW, Desai identifies financial and industrial stocks as his top picks. He says that equity investors need to carefully watch crude oil prices, IPOs, progress in infrastructure spending, and of course, the speed of monetary tightening. Excerpts:
Aren’t you more optimistic on corporate earnings this fiscal than the rest of the Street?
Yeah, the next two quarters could be very strong, and that is where the Street may be missing a point. We are running into a favourable base effect. So, if you look at the run rate in this quarter, I am just extending it to the next two quarters, too. This will give you a broad-market earnings growth of around 25%.
Recently, you wrote that investors were becoming a little complacent about volatility. And suddenly, volatility is back with a vengeance...
It looks like it’s going to be volatile near term. Central banks are going to decide the exit policy, which may generate volatility. But fundamentally, when you plot returns versus expected growth, it appears that the market has already priced in the growth that we are expecting for the next six months. There are two outcomes now: either the economy and the company deliver the expected growth and markets go nowhere, or they exceed the growth forecast and then markets adjust. If they don’t, then we are getting into choppy waters.
The quality of US growth does appear to be rather weak. What is your view on the kind of risk the anaemic US consumer poses to Indian markets?
We don’t think that the US Fed, for example, is going to be in a hurry to pull out the stimulus, because I don’t think there is enough evidence to suggest that growth is back and will stay in the US. Now, we aren’t in the double-dip camp. But many in America believe that we are heading for a double dip in 2010. Our view is that we will get some moderate growth and then we will get some exit from the Fed. India, on the other hand, is experiencing a better quality in growth than it did in the previous cycle.
This time around, the economy is on a very strong footing. I am impressed with the way the government has managed the fiscal policy, which is why we have come out of this quite quickly. And now, we are looking at a potential growth rate of 7-7.5% in the next 12-15 months. Of course, since the US is stuck in a range-bound growth, it will affect India’s growth.
What are some of the key factors that we need to watch out for in predicting the direction of markets?
Generally speaking, the market believes that whenever crude oil goes up, it is bad for India; and if that was the case, then the Indian equity market should not have done well over the past 3-4 months. But the Indian market has done well and the reason is that crude oil is not a problem when capital flows are strong. Also, crude oil becomes a problem if you get a very sharp spike in a very short time.
RBI is taking away the punch bowl of low interest rates. Is it going to be a problem?
Well, it already has. It’s one of the few
central banks to have already moved. The central bank’s track record is very good. RBI has conducted itself very well in the past. In 2006, when RBI chose to tighten and ring-fence banking from real estate, there was criticism that it was stamping out growth and that this was not good for India. But in hindsight, it’s a good thing to do, because it prevented banks from any problem when the property bubble collapsed. RBI is doing something similar right now. So far, RBI has conducted itself extremely well.
What about the risk that all the infrastructure spending that we are hearing about does not really materialise?
We have made tremendous progress in rural infrastructure. We have added about 1.5 lakh kilometres of roads, at a run rate of 100 km a day. It’s a fantastic achievement that has happened. We have managed to get electricity into rural areas. So, NREGA has done some good work and the rural infrastructure is clearly on the upswing. Now, we need to also fix urban infrastructure. Our base case is that we will get enough spending in roads and electricity.
Is more than $20 billion of equity issuances in a year a problem for the market in terms of its absorption capacity?
That’s a moving target really, because it is all a function of where we are in terms of liquidity, what happens to global growth, where we get to on exit policy by the Fed and by ECB. So, the India market can absorb around $20-25 billion in the next 12-15 months.
What makes you overweight on consumer-discretionary stocks such as auto?
We are still at the early stages of a growth cycle where consumer discretionary tends to do well. If I have to put a pecking order on the sectors, it will be probably financials, industrials, energy and then consumer-discretionary. We are still overweight on all the four sectors, but the pecking order will shift because of the fact that we have already seen a lot of performance from autos and the cycle is now taking off. So, when the cycle is about to start, consumer-discretionary is usually the best sector, financials follow next.
In the next 12 months, you will see financials and industrials do a lot better; industrials have done well, largely because of hopes of infrastructure spending. In financials, we will go through an expansion in net interest margins. The worst of the non-performing loan (NPL) cycle is behind us and loan growth will recover quite sharply in 2010. The earnings environment for financials will be good, and in terms of valuations, some of the industrial stocks do look rich.
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It's advantage RIL in LyondellBasell bid
Top 5 picks of the day | Mid-term picks | Views/Recommendations
Top stories
DP Blog Updates
Src: Economictimes, DP Blog
Ridham Desai, the chief India equity strategist at Morgan Stanley, says stocks will be volatile in the near term and that — after the
Aren’t you more optimistic on corporate earnings this fiscal than the rest of the Street?
Yeah, the next two quarters could be very strong, and that is where the Street may be missing a point. We are running into a favourable base effect. So, if you look at the run rate in this quarter, I am just extending it to the next two quarters, too. This will give you a broad-market earnings growth of around 25%.
Recently, you wrote that investors were becoming a little complacent about volatility. And suddenly, volatility is back with a vengeance...
It looks like it’s going to be volatile near term. Central banks are going to decide the exit policy, which may generate volatility. But fundamentally, when you plot returns versus expected growth, it appears that the market has already priced in the growth that we are expecting for the next six months. There are two outcomes now: either the economy and the company deliver the expected growth and markets go nowhere, or they exceed the growth forecast and then markets adjust. If they don’t, then we are getting into choppy waters.
The quality of US growth does appear to be rather weak. What is your view on the kind of risk the anaemic US consumer poses to Indian markets?
We don’t think that the US Fed, for example, is going to be in a hurry to pull out the stimulus, because I don’t think there is enough evidence to suggest that growth is back and will stay in the US. Now, we aren’t in the double-dip camp. But many in America believe that we are heading for a double dip in 2010. Our view is that we will get some moderate growth and then we will get some exit from the Fed. India, on the other hand, is experiencing a better quality in growth than it did in the previous cycle.
This time around, the economy is on a very strong footing. I am impressed with the way the government has managed the fiscal policy, which is why we have come out of this quite quickly. And now, we are looking at a potential growth rate of 7-7.5% in the next 12-15 months. Of course, since the US is stuck in a range-bound growth, it will affect India’s growth.
What are some of the key factors that we need to watch out for in predicting the direction of markets?
Generally speaking, the market believes that whenever crude oil goes up, it is bad for India; and if that was the case, then the Indian equity market should not have done well over the past 3-4 months. But the Indian market has done well and the reason is that crude oil is not a problem when capital flows are strong. Also, crude oil becomes a problem if you get a very sharp spike in a very short time.
RBI is taking away the punch bowl of low interest rates. Is it going to be a problem?
Well, it already has. It’s one of the few
What about the risk that all the infrastructure spending that we are hearing about does not really materialise?
We have made tremendous progress in rural infrastructure. We have added about 1.5 lakh kilometres of roads, at a run rate of 100 km a day. It’s a fantastic achievement that has happened. We have managed to get electricity into rural areas. So, NREGA has done some good work and the rural infrastructure is clearly on the upswing. Now, we need to also fix urban infrastructure. Our base case is that we will get enough spending in roads and electricity.
Is more than $20 billion of equity issuances in a year a problem for the market in terms of its absorption capacity?
That’s a moving target really, because it is all a function of where we are in terms of liquidity, what happens to global growth, where we get to on exit policy by the Fed and by ECB. So, the India market can absorb around $20-25 billion in the next 12-15 months.
What makes you overweight on consumer-discretionary stocks such as auto?
We are still at the early stages of a growth cycle where consumer discretionary tends to do well. If I have to put a pecking order on the sectors, it will be probably financials, industrials, energy and then consumer-discretionary. We are still overweight on all the four sectors, but the pecking order will shift because of the fact that we have already seen a lot of performance from autos and the cycle is now taking off. So, when the cycle is about to start, consumer-discretionary is usually the best sector, financials follow next.
In the next 12 months, you will see financials and industrials do a lot better; industrials have done well, largely because of hopes of infrastructure spending. In financials, we will go through an expansion in net interest margins. The worst of the non-performing loan (NPL) cycle is behind us and loan growth will recover quite sharply in 2010. The earnings environment for financials will be good, and in terms of valuations, some of the industrial stocks do look rich.
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Top 5 picks of the day | Mid-term picks | Views/Recommendations
Top stories
10 Nov 2009, 0226 hrs IST, Devangi Joshi
After experiencing an initial bout of sluggishness, the Nifty managed to gain 2% at close on Monday and also managed to move past 4830.
10 Nov 2009, 0220 hrs IST
Extending trading hours may have its advantages but the proposal does not seem to have gone down well with the broking community.
9 Nov 2009, 1629 hrs IST
Sanjeev Agrawal, Dynamic Research & Management believes that the current rally is a pullback in a wider correction and that stocks could head lower once more.
DP Blog Updates
Gold hits new all time high
Viceroy HotelsSrc: Economictimes, DP Blog
09 November 2009
Morning Views - 09.11.09 (From ET,BS)
Intermediate trend reversal?
A short-term correction inside a continuing intermediate downtrend
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Attractive midcap, small stocks can be risky
Top 5 picks of the day | Mid-term picks
RIL closes in on big-bang overseas acquisition
Possible intermediate uptrend starting, buy stocks with clear uptrends: Deepak Mohoni
A short-term correction inside a continuing intermediate downtrend
The market bottomed and turned around in what seemed like a short-term correction inside an intermediate downtrend. The Nifty was up 1.8 per cent at 4,796.15 points, while the Sensex was up 1.65 per cent at 16,158 points. The Defty was ahead 2.46 per cent with the rupee hardening again.
FIIs stopped selling and became token buyers while domestic institutions continued to be steady buyers. Volumes remained high. Smaller stocks outperformed the pivotals with the Midcaps up 3.9 per cent while the BSE 500 gained 2.47 per cent and the Junior rose 4.26 per cent.
Outlook: This looks like a short-term correction inside a continuing intermediate downtrend. There is resistance between 4,850-4,950 and the current move is likely to fizzle out somewhere in that zone within the next two sessions. In the next downtrend, it would be interesting to see if successive supports at 4,700-4,750 and 4,500-4,550 held.
Rationale: The market has corrected from the 2009 high of 5,181 (October 20) to a low of 4,538 (November 3). If it has established an intermediate downtrend starting October 21, that low of 5,538 will most likely be broken. Using Fibonacci retracements, the up move from 3,918 (July 13) to 5,181 (October 20) should be followed by a correction that lasts 4-6 weeks minimum and corrects to 4,700, 4,550, or 4,400.
The first two levels were hit in the first two weeks of the new trend. But the likely time period of correction is not over. So, the third level (62 per cent retracement) is likely to be hit. The Exponential 200 Day Moving Average is around 4,300, which reinforces support at 4,300-4,400.
Counter-view: We've seen before that intermediate downtrends within a long-term bull market are often short in terms of time and mild in terms of levels. Correction levels have already matched and it's possible that the time period will be truncated. If it happens, it will need to be driven by enthusiastic FII buying. A new intermediate uptrend would be signalled by climbing past 5,050 and confirmed only by beating 5,181.
Bulls & bears: The pullback was quite broad as indeed was the earlier slide. Stocks from all sectors participated. However, the CNXIT underperformed, probably because of rupee strength. Banks and real estate counters were among the stronger contributors to the recovery. Sugar continued to remain in a bull run that is disconnected from other market movements.
Metals, airlines and PSUs all jumped, apparently on news-based triggers. Traders should be selective about entering PSUs since many of them are noticeably illiquid. Auto stocks remained depressed. Some shuffling out of defensive FMCG counters into more aggressive plays appears to have occurred since HUL and ITC under-performed. The other defensive sector, pharma continued to do well.
MICRO TECHNICALS
JET AIRWAYS
Current Price: Rs 465
Target Price: Rs 485
The stock has seen enhanced volumes and pushed to a new 2009 high suggesting a recent reversal of the long-term trend. It has a likely target of Rs 485-495, where it will hit heavy resistance. Keep a stop at Rs 455 and go long. Book profits above Rs 485.
POLARIS
Current Price: Rs 166.3
Target Price: Rs 175
The stock has gained over 300 per cent since March. It made another surge on high volume. There is resistance near the 2009 highs, starting at about Rs 175. Keep a trailing stop at Rs 160 and go long. Book 50 percent profit at Rs 175 and move the stop up to Rs 170.
J P ASSOCIATES
Current Price: Rs 228
Target Price: Rs 240
The stock has seen a V-shaped recovery on good volumes from a bottom at Rs 190. It could rise till Rs 240. But there is a large downside if current support is broken. Keep a stop at Rs 225. Go long with a target of Rs 240. If the Rs 225 stop breaks, go short with a target of Rs 215.
RCF
Current Price: Rs 73.5
Target Price: Rs 80
The stock shot up on massive volume expansion once the new PSU public holding policy was announced. There's plenty of resistance above the current price but it probably has sufficient momentum to reach Rs 80. Keep a stop at Rs 71 and go long.
HCC
Current Price: Rs 134.1
Target Price: Rs 145
The stock has crossed a key resistance on high volumes. It has a target projection of Rs 145, which is close to the 2009 high. Keep a stop at Rs 131 and go long. Clear the position between Rs 142-145 because it's unlikely to beat the Rs 145 mark.
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Attractive midcap, small stocks can be risky
Top 5 picks of the day | Mid-term picks
9 Nov 2009, 0834 hrs IST
Mindtree appears to be in favourable spot in the R&D offshore market (45% of company revenues) and cyclical IT services market.
9 Nov 2009, 0833 hrs IST
Edelweiss rates Tulip Telecom (TTSL) as a 'Sector Outperformer' on a relative return basis.
9 Nov 2009, 0831 hrs IST
NTPC hinted that it might miss its target of adding 22 GW capacity in the 11th five-year plan (FY08-12).
9 Nov 2009, 0830 hrs IST
Goldman Sachs is downgrading Jindal Steel to 'Neutral' from 'Buy', with a revised target price of Rs 625.
9 Nov 2009, 0827 hrs IST
Citigroup maintains 'Buy' rating on Federal Bank. Federal's Q2FY10 profits were 20% below estimates largely due to asset delinquencies and higher loan-loss charges.
9 Nov 2009, 0825 hrs IST
Morgan Stanley maintains `Equal Weight'rating on the stock at the revised price target of Rs 425.
9 Nov 2009, 0102 hrs IST, Devangi Joshi
With the weekly gain of 84 points, Nifty has managed to stay afloat above its 20 week moving average. For the coming sessions, the Nifty would look at 4640 due to the presence of the 100-DMA around that level.
9 Nov 2009, 0812 hrs IST, Santanu Mishra
The September 2009 quarterly result of India Inc does not provide strong signs of recovery. Investors need to watch next two quarters before jumping into any conclusion.
9 Nov 2009, 0755 hrs IST, Krishna Kant
Potential disinvestment candidates include some of the most profitable PSUs but given the recent experience the IPOs could be at a high premium minimising the chances of a quick return for retail investors.
9 Nov 2009, 0749 hrs IST, Kiran Kabtta Somvanshi
Private trusts for children had its glory days in the 80s when every other film had such a thing in the storyline. It's seeing a comeback as several parents are turning to it.
9 Nov 2009, 0743 hrs IST
Analystss take on Mindtree, Tulip Telecom, NTPC, Jindal Steel & Power, Federal Bank and Patni Computers.
9 Nov 2009, 0732 hrs IST, Karan Sehgal
Punjab National Bank has outperformed its peers on all important parameters including growth, asset quality and margins. Investors should consider it for long-term investment.
9 Nov 2009, 0722 hrs IST
The ad-hoc combination of quantitative easing, government stimulus packages and zero-interest-rate policies has distorted markets beyond recognition.
9 Nov 2009, 0712 hrs IST, Devangi Joshi
Consumer, as well as infrastructure oriented business activities make Bajaj Electrical a good buy on dips.
9 Nov 2009, 0706 hrs IST, Amriteshwar Mathur
Chettinad Cement has increased capacity but concern over surplus supply in south remains.
9 Nov 2009, 0656 hrs IST, Supriya Verma Mishra
What can Pantaloon shareholders expect in future? ET Intelligence Group finds out in a conversation with the company's managing director Kishore Biyani.
9 Nov 2009, 0650 hrs IST, Devangi Joshi
While gold is trading at its all-time high, silver is restricted by its industrial usage. The white metal may, however, benefit from the strong fundamentals of the yellow metal.
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Src: EconomicTimes, Business-Standard
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