Tata Capital opens doors to reatail investors
23 Feb 2009, 0520 hrs IST, Karan Sehgal
In the times of credit crunch, Tata Capital has opened its doors to the retail investors by offering an attractive investment opportunity.
G7 Meet: Who's kidding whom?
23 Feb 2009, 0517 hrs IST
Multilateral organisations, regional development institutions and major central banks should cooperate with private lenders to offer and guarantee trade financing.
Derivatives Diary: Buying puts much better option
23 Feb 2009, 0514 hrs IST, Shakti Shankar Patra
Although the Nifty is still gyrating in a broad range and is yet to break down, the only thing one can do in this market is use any reasonable up move to open up short positions.
Clariant board proposes Rs 19 per share dividend
23 Feb 2009, 0507 hrs IST
The board is proposing to pay dividend of Rs 19 per share, which translates to a handsome dividend yield of 11.5%, considering Friday’s closing price of the Clariant scrip.
GlaxoSmithkline in pink of health
23 Feb 2009, 0504 hrs IST
GSK’s net profit after tax jumped 158% to Rs 208 crore thanks to exceptional gains of Rs 119.31 crore on sale of investments.
ABB India outlook remains cautious
23 Feb 2009, 0501 hrs IST
Despite the healthy numbers for the December ‘08 quarter, the outlook of the company remains cautious.
Deepak Fertilisers generating healthy cash flows
23 Feb 2009, 0456 hrs IST, Ramkrishna Kashelkar
Together with attractive dividend yield and better business prospects makes for a good long term investment.
Markets likely to start another downtrend
23 Feb 2009, 0439 hrs IST, Deepak Mohoni
The market has now been in an intermediate downtrend for a week, and long-term investment activity can be resumed once more.
UPA govt's policy may put brakes on India's growth
23 Feb 2009, 0623 hrs IST, Krishna Kant
The cheap-everything policy of UPA government may end up putting brakes on India’s growth story. As things stand, it may bring India back to the high cost economy of 1990s.
Are you concerned about India Inc's credit risk?
23 Feb 2009, 0616 hrs IST, Santanu Mishra
ET Intelligence Group bring out a comprehensive list of companies, which are most likely to weather the current financial turmoil.
Cashing in on recapitalisation
23 Feb 2009, 0610 hrs IST, Karan Sehgal
ETIG analyses the influence of government's recapitalisation drive on banks' performance.
Bull's Eye: Pantaloon, RCom, ITC, Hexaware, Titan Industries
23 Feb 2009, 0604 hrs IST
Here are some stocks you can trade upon this week.
GMR Infrastructure a safe bet
23 Feb 2009, 0552 hrs IST, Priya Kansara Pandya
GMR Infrastructure is well geared for substantial growth over the long term fuelled by its power and airport businesses.
Eveready to launch new products
23 Feb 2009, 0546 hrs IST, Kiran Kabtta
Though Eveready Industries' growth has stagnated in the last few years, the company bids to make a comeback with new product launches and diversification
Falling realty aids retail growth
23 Feb 2009, 0542 hrs IST, Supriya Verma Mishra
Declining rentals and sales overdrive have helped the retail sector shore up revenues.
Infra projects may bring relief to cement cos
23 Feb 2009, 0539 hrs IST, Amriteshwar Mathur
A surge in input costs has dealt a blow to the operating margins of the leading cement companies. Government sponsored infrastructure projects could bring some relief.
Gitanjali Gems: Stock provides good entry for investors
23 Feb 2009, 0530 hrs IST, Devangi Joshi
With a wider product range and potential to tap the premium end of the market through tie-ups with international retailers, Gitanjali is likely to make larger strides in the domestic retail space.
Fiscal deficit needs to be corrected
23 Feb 2009, 0524 hrs IST, Pallavi Mulay
Lower revenues in a slowing economy have widened the fiscal deficit. Government needs to rein it in order to keep the economy growing.
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Index Outlook
Sensex (8843.2)
Stock markets began to totter even as the interim budget was being read last Monday. All hopes of a flurry of policy changes to pull the distressed economy and stock markets out of the current morass were laid to rest by the insipid document. Sensex that had been clinging to a feeble up-trend, lost its hold and slid 8 per cent lower for the week.
The overseas markets were most unhelpful, slithering and sliding to multi-year lows, causing nervous jitters amongst the trading fraternity back home. Volumes were extremely low in cash market though they were decent in the derivative segment implying that traders are currently calling the shots in our market. FIIs turned net sellers once again taking the total outflow for 2009 to $1.3 billion.
The Sensex could make no headway last week and declined firmly below the 50-day simple moving average as well as our key short-term trend deciding level of 9050. The 10-day rate of change oscillator and the14-week relative strength index have moved in to the negative zone again signaling weakness in the short-term. Oscillators in weekly chart too are signaling a sell after a failed attempt to move in to the bullish zone.
If we follow conventional techniques, the Sensex is in a sideways trend since last October. The broad range for the Sensex over this move was between 8300 and 11000. It is normal for trepidation levels to increase every time the index nears the lower boundary of a trading range. It is then very easy to believe that there could be another 20 to 30 per cent decline from those levels. The reverse is true when the upper end of a trading band is reached as hope soars. The right approach would be to wait for either boundary to be breached before deciding on the next move.
The symmetric triangle formation that we had been tracking as per Elliott Wave rules, ended at 9724 and the lower trend-line of the triangle was also breached. The decline recorded last week can be labelled as either, a) The last wave down of the five-wave pattern from the January 2008 peak. The downward targets as per this count are 7300 and lower. b) Or an X wave that can be followed by another three or five wave pattern. If the index recovers from the zone between 8000 and 8500, we would have to revert to this count.
In other words, though the Sensex has reversed lower and gloom and doom is pervading everywhere, index is still above the support at 8300. A close below this level would be the first signal that investors should brace themselves for another plunge. Supports for the week ahead are at 8631, 8316 and 7697. A rebound can take the index higher to 9375 or 9725. Close above the second resistance is required to make the short-term outlook positive again.
Nifty (2736.4) Nifty too reversed lower forming an evening star pattern in the weekly candlestick chart. The index has closed below the 50-day moving average as well as the lower trend-line of the symmetric triangle. It can decline to 2658, 2509 or 2425 in the near term.
Rallies will face resistance at 2870 and 2930. Short term traders can play short as long as the index trades below the first resistance. The medium term trend is however still sideways and there are a cluster of supports just below at 2660, 2570 and 2502. The medium term view will turn overtly negative only on a close below 2500. Such as move will signal that the down trend from the last January peak has resumed.
Global Cues Global markets went in to a tailspin once more, led by the Dow Jones Industrial Average (DJIA). This index breached the crucial 7500 mark that had been the cynosure of all eyes over the last couple of weeks and closed slightly lower. The next support is at 7197 that was the trough formed in October 2002.
A couple of monthly closes below this level is needed to sound the death knell for the structural bull market in equities. As per Elliott Wave counts, a significant low can be formed around 7500 in DJIA which can be followed by an intermediate term rally lasting a few months. But a strong decline below 7500 will give the next target at 6500 for this index. The S&P 500 is still holding above its 2008 lows.CBOE Volatility index spiked to 50 though it is way below the peak at 89 recorded last October. Investors have probably learnt to live with the bad news and sliding stock markets. Many of the European indices such as the CAC, DAX, Greece General Share Index, Italy’s MIBTEL and Spain’s Madrid General index are testing their 2008 lows or are already below it. Asian markets led by China and the Latin-American markets have weathered the decline relatively well over the last month.
STOCKS: Reliance Communications: Buy
Investors with a two-three year horizon can consider buying the share of Reliance Communications (RCom), going by its pan-India dual-technology mobile play and the strength in its enterprise division, both of which offer long-term ...
STOCKS: Container Corporation: Buy
Investments with a two-three year perspective can be considered in the stock of Container Corporation of India (Concor). While slackening demand and tightening of lending has taken a toll on most logistics ...
STOCKS: Sesa Goa: Buy
Investors with a three-year horizon can consider accumulating the stock of Sesa Goa, trading at Rs 82.10. The company’s market leadership in iron ore mining and exports, signs that Chinese demand for Indian ore may resume on the back of ...
STOCKS: Bartronics India: Buy
Investors with a two-year perspective can buy the shares of Bartronics India, considering large multi-year deal wins that bolster its order-book, and strong position as a SIM card manufacturer for telecom companies in ...
DERIVATIVES MARKETS: Nifty future may move in a range
Equity markets in India were back to square one last week, as both the Interim Budget and on Obama stimulus plan failed to live up to expectation. The NSE Nifty February future crashed by eight per cent to end at 2722 against the previous ...
The market collapsed in a dramatic fashion on the back of selling by both domestic and overseas institutions in the wake of a disappointing interim Budget. The Nifty was down 7.2 per cent, closing at 2,736 points while the Sensex lost 8.2 per cent to close at 8,843 points. The Defty lost 9.5 per cent with the rupee plunging to 49.85 to the dollar.
While volumes in the cash market were low, they rose in the derivatives market. Breadth was adverse with declines far outnumbering advances. The banking sector was hit hard with the Bank Nifty losing over 13.8 per cent. The broad BSE 500 was down 7.8 per cent. Trading outside the derivatives sector was of almost negligible volume.
Outlook: The outlook is clearly bearish and the market is likely to move down until it hits supports somewhere between 2,500-2,600. The down move broke a key support in the 2,850 region. That will act as a resistance on any up move. Volatility is likely to rise next week due to settlement considerations.
Rationale: The last couple of months have seen the market trade two ranges. The lower range is Nifty 2,500-2,850 and the higher, 2,850-3,150. Last week, the market broke the support of 2,850 and headed into the lower range. It’s liable to swing down until the lower end where there is support between 2,500-2,650. Be prepared for at least one session of short-covering where 2,850 will be a resistance.
Counter-view: An upwards break and a close above 2,850 would destroy the downtrend. This looks unlikely but if it does happen, the market would trade up till at least 3,000. The lack of volumes in the cash market in the past month makes it quite sensitive to larger infusions that could result during settlement week.
Bulls & Bears: The landscape consisted of bearish counters with the odd winner scattered amidst many losers. The downtrend in the financial sector had the biggest effect on the market. Most banks slid and several such as Axis Bank, Canara Bank and ICICI Bank looked set to test their respective lows of 2008.
The IT sector also did badly with the CNXIT down by 5.9 per cent. Key stocks such as Infosys and the ever-volatile Educomp looked set to drop further. However Tech Mahindra saw some institutional buying. Most other sectors did badly.
The few gains that appeared came across three sectors that probably benefited from short-covering. Automobiles and real estate have been among the worst performers of this bear market but both sectors saw some price stabilisation and bottoming formations last week.
Mahindra looked like a decent pick, for instance. Pharmaceuticals saw some selective buying in Matrix Labs. Lupin also seems promising.
MICRO TECHNICALS
ABB
Current Price: Rs 399
Target Price: NA
The stock has seen buying after hitting a new low of Rs 365, dropping from Rs 445 levels on last Monday. It is likely to see a pullback till around the Rs 430 on what appears to be a strong trend of short covering. Keep a stop at Rs 390 and go long.
AXIS BANK
Current Price: Rs 373
Target Price: Rs 350
The stock has broken support at Rs 375 and it is set to fall further. The target would be around Rs 350-Rs 355. Keep a stop at Rs 380 and go short. Partially cover below Rs 355. If it closes below Rs 350, it could fall further to Rs 330 mark.
DR REDDY'S
Current Price: Rs 395
Target Price: Rs 420
The stock shows signs of a bottoming formation. It could be due for a pullback till the Rs 420 level with some resistance at around Rs 410. Keep a stop at Rs 390 and go long. Start covering above Rs 410.
MARUTI SUZUKI
Current Price: Rs 630
Target Price: Rs 680
The stock is testing resistance around Rs 635-Rs 640. If it does close above Rs 640, it would have a target of about Rs 680. Keep a stop at Rs 615 and go long. Buy more if the stock closes above the Rs 640 level.
PURVANKARA
Current Price: Rs 37.3
Target Price: Rs 44
The stock appears to have hit good support. It has the potential to pull back till around Rs 44. On the other hand, if it closes below Rs 36, it is liable to collapse till the Rs 28 level. So it’s delicately poised. Keep a stop at Rs 36 and go long, booking profits at Rs 42 plus. If it closes below Rs 36, go short with a target of Rs 29.
Source:ET,BL,BS.
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