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Suzlon shares were among the biggest gainers on Thursday, rising over 13% to close at Rs 62.50, and snapping a eight-day losing streak that had prompted speculation of the company facing difficulties. The stock rose, even as the company informed stock exchanges that it had pledged additional shares with Indiabulls Financial Services, to which it owes roughly Rs 200 crore.
A person familiar with the development said additional shares had been pledged to provide for margin due to the 34% fall in stock price in less than two weeks. The shares were being hammered on talk that the company was struggling to refinance its foreign currency loans. The dramatic surge in the stock price on Thursday was driven by talk that the company has now managed to refinance close to Rs 10,000 crore of loans.
A leading state-owned bank is said to have provided the wind power company a fresh loan of $465 million. Have the bears called off their attack? Suzlon November futures closed at a slight premium to spot, with open interest rising 2.6%. This could indicate that in addition to covering of short positions, some fresh long positions too may have been initiated.
Bears were hammering the shares in the hope that the company would not be able to meet the margin requirement, thus prompting the lender to offload the pledged shares. While the company may have tided over its liquidity problems, bears seem to be taking heart in the weak operating performance, and are still hoping to rake a neat profit on their short positions.
MF has the last laugh after early fund erosion
EVEN as rivals rejoiced over the approximate Rs 2,000-crore fall in assets under management (AUM) of a leading fund house in October over the last month, officials in the mutual fund in question were actually celebrating. The industry buzz has it that the fund house held a party for its employees on Wednesday to celebrate a fresh inflow of a few thousand crores (sources say in the range of Rs 2,500-3 ,000 crore) into various debt schemes.
Ind-Barath Power to tap IPO market
HYDERABAD-BASED power generation company Ind-Barath Power Infra, which recently got $100-million funding from private equity funds Sequoia Capital and Bessermer Venture Partners, is planning to go public soon. According to an official privy to the development, the company has initiated talks with merchant bankers for the same.
The private equity firms together picked up more than 15% stake in the company, valuing it at over Rs 2,100 crore. This is the second round of private equity funding for the power generator, which has projects in Karnataka, Orissa, Maharashtra and Tamil Nadu. In 2007, Citi Ventures and UTI Ventures had invested Rs 300 crore in the company.
Contributed by Santosh Nair, Shailesh Menon & Reena Zachariah
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This(Srisai's Instinct Stock Calls) will be a New Initiativeof this blog to Publish Blog Author's Own Investment/Trading Calls for Short-Medium Termperspective. 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 4705
Nifty Future Levels:
Resi: 4721-4765-4792-4820 Supp: 4681-4654-4633
NFut will face strong resi at 4765-4774 levels... Book Partial LONG Profits at higher side... And Risk Traders go SHORT In Nifty Future at 4765 levels and Keep Strict Stoploss at 4792-4802 levels... Keep Strict StopLoss.
Ranbaxy cmp 397
This Stock struggles to cross 405-410 level in last few sessions... Willl It Break that level or not is the question.... If it breaks 410 levels with good volumes, it can move 421-434 range.. Supports at 388-383-377 levels...
PTC India cmp 108
This also facing strong resi 113-115 levels... Lets See will this to be taken out or not in next few seesions.... Supports pegged at 102-97-93 levels....
Suzlon: cmp 55
SUpports at 51-52 levels.... Not in a Trading zone..... Heavily beaten on Technicals, Bad set of Results.... Purely Investments Perspective Buy this Stock at decline in Part by Part.... Resi @ 57.50-62 levels....
Unitech cmp 82.5
THis stock has resi @ 87.40-93 levels... Risk Traders Go SHORT this stock at 91-92 levels and Keep Strict StopLoss at 95-97.... But in Small quantities.... Supports at 77-73-69-65 levels.....
Shares of Force Motors have been gaining, of late, on talk that the bus and truck maker’s joint venture with Europe’s third-largest truck and bus manufacturer MAN Nutzfahrzeuge AG of Germany postponed indefinitely in November 2008, is back on track. The stock closed at Rs 223 on Wednesday, and has gained 31% over the past one month.
Young Turk comes into his own as an operator
The younger brother of an extremely low profile, but powerful broker to leading market operators during the late 90s till early 2001, now appears to be coming into his own as an operator. The young Turk, who shares his first name with a Bollywood thespian renowned for his tragedy roles, had been running the family broking operations, after the untimely demise of his elder brother in 2001, in very much the low key style of the latter. During the meltdown in the past couple of weeks, the Turk is said to have reaped a tidy profit by virtue of his short positions in many frontline counters.
Mediaone buyout hunt in Europe gets HNIs’ attention
A few high net worth investors (HNIs) have taken interest in Chennai-based Mediaone Global Entertainment. The buzz is that the company, currently engaged in the exhibition, distribution, production of TV programmes and movie production businesses, is looking to acquire a Europe-based company engaged in production, distribution of Hollywood movies.
The stock closed at Rs 145, flat over its previous close. Grapevine has it that the acquisition will be done by its UK’s wholly owned subsidiary. A senior company official declined to comment on the matter, but said the firm “keeps looking at organic and inorganic growth opportunities”.
Faced with bear hug, co plans PR mission
The relief rally on Wednesday brought no solace for one of the Nifty companies, which continued to be under pressure. The buzz is that the company’s corporate communication team has been frantically calling up equity analysts, and offering to provide any “clarification” that they wanted on the company’s financials.
AK Sridhar may head to lead BoB legal team
AK Sridhar, CEO and head of investments, UTI International Singapore, is learnt to have put in his paper. He is tipped to be headed for BoB Legal & General, the life insurance JV of Bank of Baroda.
Contributed by Deeptha Rajkumar, Apurv Gupta, Santosh Nair and Mayur Shetty
This(Srisai's Instinct Stock Calls) will be a New Initiativeof this blog to Publish Blog Author's Own Investment/Trading Calls for Short-Medium Termperspective. 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 4559
Nifty Future crucial support at 4557 level... If this level does not hold for 2-3 days (Closing basis) further downside expected upto 4420-4300-4230 levels.... Mkt in Oversold region.... PCR ratio is at 0.80 level... So mkt may bounce back in short term (+100 to +150 likely in few sessions)... But NFut will have Strong resi @ 4721-4765 levels...
Dr.Reddy: cmp 1038
Buy Above 1060 level for Target 1135-1150 level.... Keep 1010 as Strict StopLoss...
Reliance Capital: cmp 693
Stock has fallen from Recent high range of 900-930 levels.... I think Almost Worst over for the Stock near term... Go LONG with Strict StopLoss of 630..... Resi @ 745-775-783 levels.
Gujarat NRE coke: cmp 53
Stock has Good support at 55-56 levels.. Stock may try to cross this and try for 61-62 levels near term.... But If not able to cross 55-56 levels, then it could fall 49-46 levels...
Marico cmp 100
Stock has good support at 88-91 levels.. Keep This Level as Strict StopLoss and Go LONG.... 10-12 % uoside expected... But Keep Strict StopLoss.
GPIL(Godawari Power and ISpat Ltd): cmp 129
Stock has recently breached its Strong resi @ 146 levels... But now stock trades below this.... Stock may try reach that 146 level. So RISK Traders try this stock for LONG positions with Own StopLoss/Risk....
Global equities have surged about 70% in six months on hopes of a rebound in the US economy. However, with valuations getting stretched, central banks raising the drumbeat on policy tightening, and fear that governments may withdraw their stimulus measures, the road ahead looks bleak for global equities.
Chris Wood, Equity Strategist, CLSA, says the chances of a deeper correction in global equities are rising.
Jim Walker, MD, Asianomics, too doesn't see a V-shaped recovery in global equities. "If you look at the level of activity across the world from Europe to America to Japan to Asia, it is weak. It's a very weak recovery so far and as governments withdraw stimulus over the course of the next year, it is going to get weaker still."
On US markets:
After Friday's sell-off, US markets ended Monday in the green zone on positive manufacturing data. The US economy grew at a better-than-expected annualised rate of 3.5% in the third quarter. The return comes after four successive quarters of shrinking economic activity. Experts hail this as the end of the recession which was worse than the Great Depression of 1930s.
The ISM manufacturing index rose to 55.7 from 52.6 in September. This is the third straight month of growth and highest reading since April 2006. Pending home sales rose to their highest level in nearly three years in September. Also, construction spending rose 0.8% in September.
But Wood is still cautious. He
says there is some initial indication of a technical breakdown in the US. "The US market will be vulnerable early next year the US market. If it becomes clear, after this inventory cycle, that consumption, employment is not really recovering, then the market will go down. You will then get renewed stimulus in the US and measures trying to generate growth. The key variable in the West is government policy." CLSA's best case scenario is 1,200 on the S&P 500 by year-end, he added.
However, Richard Bernstein of Richard Bernstein Capital Management is a lot more bullish. "Right now, there is a blurring between the secular issues and the cyclical ones. There are people, including me, who are concerned about the secular issues, but we can't ignore the fact that the economy is getting better, employment is improving. When that happens you will see a cyclical rebound."
Michael Darda of MKM Partners too sees the markets headed higher. "We have moved a very long way in a very short period of time, so we are building in recovery expectations. A period of consolidation and correction will not be out of line. I believe that the recovery process is underway. Even if the big gains are behind us in percentage terms, I still think that in the next 6-8 months the markets will move higher, correction and pullbacks notwithstanding."
On Asia:
Today, Asian markets ended weak ahead of the two-day monetary policy meeting of the Federal Reserve. Wood feels an easy monetary policy in Asia can create asset bubbles. (Read:Easy monetary policy in Asia may create asset bubbles: CLSA) "The worst case correction in Asia is at one-third of highs." Wood advises investors to use significant corrections in Asia to buy stocks. “We have reduced our weight on India, and increased our weight on China."
On India:
In last week's credit policy, the Reserve Bank had stated that it would be looking to raise rates going forward on the back of positive August IIP numbers. This didn't go down well with the market which sees a further rise in borrowing cost. The street sees the recovery in India Inc on the back of lower expenses, rather than a pick-up in business.
According to Wood, India is most likely to see the first rate hike in Asia. But was quick to add that the Reserve Bank won't be aggressive in monetary tightening. "Going into Q1 of next calendar year, the Indian stock market will have to deal with a likelihood of monetary tightening. That is not a disaster. It just creates some negative noise in the short-term."
N Krishnan, Head of Research - India, CLSA, is optimistic on the power and road sector and bullish on metal stocks. He sees no triggers yet to buy telecom scrips.
Commenting on Q2 FY10 numbers, Krishnan says earnings are ahead of expectations. "We expect earnings growth of 5-6% this year. We see strong topline growth in H2 on a base effect, but margins are likely to be under pressure."
Here is a verbatim transcript of an exclusive interview with N Krishnan on CNBC-TV18. Also watch the accompanying video.
Q: We had a big rally and somewhat of a correction over the last couple of weeks in India. Do you think markets had run ahead of themselves or you are confident that valuations are not too stretched? A: The markets have had a very strong run from the lows of March, while we have seen that reflected in earnings upgrades as well. Clearly, valuations are a little above their historical average. What the market seem to be pricing in is a smooth recovery right into FY11. What we have seen globally is clearly having some impact on investors thinking, including those who were at our conference since yesterday. In our view the key for further performance of the market is going to be pick up in the investment cycle because a lot of the low hanging fruit from the recoveryof the consumer is now largely in the numbers. However, we are quite confident that we will see that coming through because there are enabling conditions in the form of domestic recovery, in the form of interest rates being pretty low and also in the form of equity markets still being a lot more supportive for capital raising than what they were a few months ago.
So we will start to see those upgrades coming through in the next couple of quarters and that will actually drive the next leg of earnings upgrade. For now, the first run has largely been digested.
Q: How has earnings season gone by for you this time around, there seemed to be some large scale disappointments but for you how did Q2 perform? A: if you look at the aggregate numbers, they were actually slightly ahead of our expectations. We were looking at a headline de-growth for the Sensex about 1.5% because of year on year comparison. However, we came out with a small growth of about 3%. When we look at our broader universe of 110 stocks, the situation was fairly similar a beat ofabout 5% points. The beat was largely on account of margins surprises and particularly benefit of lower raw material costs and treasury gains for number of banks. So relative to Q1, we are clearly seeing momentum of surprises coming off. There was disappointment in some sectors for some of the property stocks. We were quite disappointed with the numbers and the picture was mixed in some of the other sectors as well.
Q: Looking ahead into two-four quarters, do you find reasons to bring about significant earnings upgrade from here or do you think this is not going to be one more of those cycles where every quarter you see sharp acceleration in earnings upgrades as often happens when the market takes off? A: The momentum has already started to flag. You can attribute it to the fact that the upgradeswhich you have seen since the bottom have come on account of recovery in consumer led sectors whether its autos have seen volumes pick up. I would say every property relative to forecast we had in early 2009, we saw volumes starting to pick up. Therefore, we needed to upgrade our numbers. In some of the global cyclical, the assumptions at that point of time may have been pessimistic. So we have seen is a reset of very pessimistic estimates and the recovery in consumer sentiment playing into these upgrades.
However, if one looks at the composition of market earnings and particularly driving growth between FY10 and FY11, you now need to start seeing meaningful upgrades coming through sectors like banks like Oil & Gas, metals, IT services. All of these are more co-related to either investment cycle picking up; credit growth coming back for banks or to the global recovery getting a bit more traction.
You have a bit of breather over the next quarter or two. However, by early 2010, you will start to see a pick up there as well. Globally, our view is that you will see global traction midway to 2010 and that will essentially mean looking 12 months out we should still be in midst of earnings upgrade cycle. However, there is a pause for next quarter or two.
Q: In the nearer-term for the rest of this financial year, what is your earnings growth estimate? What will it mean for the second half by way of growth uptick you would want to see? A: For this year we have a rather muted growth expectation of about 5-6%. This is because we have some of the large contributors to earnings the global cyclical facing a much tougher comparison. What it does mean is that you will see topline numbers being fairly strong as we go into second half because of YoY comparisons for the domestic sectors. However, you will start to see the gains that you saw on margins coming off as we go later in the year. We have seen input cost move up. Some of the operating leverage gains will not be as strong because cost structures will start to move up.
The overall earnings momentum will get somewhat more muted. In FY11, you will see a pick up yet again and that will be on a low base. This is because FY08 to FY10 have virtually been growthless years if you take the aggregate two year period
Q: Do you see any apprehension on part of people who are attending on conference on infrastructure sector on how sanguine they are about capex actually picking up?
A: Some investors are doubtful because the sector has actually held up fairly well in terms of valuations and while there is visibility in the medium term for some companies due to strong order book, you cannot give the benefit of that for an extended period of time. The reason why we think that the investment cycle should pick up is what we are hearing or seeing from corporates that have deferred their capex plan last year around this time in response to they credit crunch and the fact that the demand really fell off severely. They are coming back slowly. The mood is still of caution, so they are coming back slowly but what we also see is that even for the smallest of companies, the SMEs which we track through a quarterly survey, the capex intentions are clearly rising. So two quarters ago, just a little more than a quarter the companies in that sample were investing in that capex, the rest of them had put their plans on hold and less than only around the third we are actually looking at undertaking capex in 2009, things are changing on both counts. Hence, about 40% are now in investment mode and a little more than 50 are talking about investing in the next 12 months. Therefore, the momentum is starting to pick up and outside of this like power and roads, there was clearly a big pipeline that had got built up but where projects got delayed or deferred because of capital constraints or in some cases policy related issues as well and I am quite optimistic with at least in these two infrastructure sectors, one should start to see things picking up.
Q: You have two of the largest telecom companies being profiled today. So what you have made of that space that has easily been the biggest earnings disappointments this quarter?
A: Yes that was the sector in which it pulled down the growth what we were expecting. The sector is in a fairly early stage of disruptive pricing. By this I mean that the companies responses are still coming in, but you do have tariff levels which are already very competitive. So we could argue about how much further price erosion you could see. You also have a number of new entrants which are yet to make a big impact on the space and their own response and signals on how aggressively they will enter the market may start to change or they may indicate that they would not be as positive on this market as they would have been. Hence, according to me, there is a bit of trouble in the short term. The market may look at the stocks and say that these are levels that which there seems to be value or buying into the stocks just yet especially because you have not had even a quarter of results after these big tariff cuts have come through. So the sector is going to be a bit sluggish for the next couple of quarters but you would probably find some value investors who have got ht e luxury of taking a much longer term horizon starting to nibble around these price levels.
Q: Where do you stand on global commodities because numbers from some of those companies, the large ones like Hindalco, Tisco have not exactly been up to street estimates? Are you bullish on global commodity stocks generally or you think they could correct from here?
A: There is again here a short term versus the longer term issue. Some of the global commodities correct a bit in terms of prices, it is in the short term again going to be a function of what you see on the dollar and whether risk aversion creates a stronger dollar and correspondingly impacts commodity prices. When I look at most of the stocks in the metals space, compared to any time in the past ten years or so, this is the first time that I can see most companies in the sector having a reasonably strong volume growth story over the next two-three years and that is something that which is the attraction of the sector that right now so we are positive on some of the names. Principally, we think that even if there isn’t a very strong price recovery, we have a combination of good volume growth coming on account of new capacities. In some cases that is going to lead to meaningful cost savings as well just because of economies of scale and some cases of restructuring of overseas operations. So we are actually quite bullish on that space. Some of the stocks have corrected and are starting to look very interesting.
Q: How much margin pressure you expect to see over the next two-four quarters because that is what has helped to autos and even cements to some extent?
A: You will definitely see margins tapering off. The commentary from all the auto companies during the results season has been that the margins have been very good this quarter. However, I don’t expect them to sustain. So they have been very cautious on that and I do think that as the cost trends up a little. We will see some margin pressure. The extent of disappointment may not be that much because companies have been guiding for that. Cement is another sector which is in the relatively early stage of price correction but as supply comes on and there is a lot of it over the next 12 months, we could see prices coming under more pressure which will mean that margins will take a beating. So I do think that the margin outlook for the second half of the year is certainly going to be a lot more challenging than what we have seen till now.
The stock markets are again in the correction mode. Till Friday (October 30) close, the Sensex had lost over 1,590 points, or 9.12%, since its Diwali day high of 17,493. Investors, at the same time, have lost Rs 4.6 lakh crore with BSE’s market capitalisation now being at Rs 53.5 lakh crore. All, however, is not lost and is not bad for investors at least as experts feel that some quality stocks with 10-30% retracement look more attractive in the present market scenario.
Here we take a look at some good stocks which have witnessed a correction over the last two weeks, in line with the declines in the broader markets, and are attractively placed in terms of investment:
1. Reliance Industries Ltd 2 Nov 2009, 1444 hrs IST
Fall over the last 2 weeks (Till Friday morning): 15.7%
Outlook: The company has successfully executed its two mega ventures, viz. KG basin gas and the RPL refinery. “We expect them to be the key drivers of profitability over the next few years. We remain positive on RIL’s future growth prospects. After a recent fall at current market price of Rs 1950, RIL is currently trading at 16.8x and 12.5x of FY10E and FY11E earnings, respectively, which appears attractive. We expect RIL to deliver 30.8% CAGR in earnings over next two years (FY09 – FY11E). Historically the stock trades at an average of 15x its 1 year forward earnings. Considering this, our target price for the stock stands at Rs 2,475 (15x of FY11E earnings of Rs 165), providing an upside potential of 20% from current levels,” says Ashish Kapur, CEO, Invest Shoppe.
Outlook: Tata Steel is one of the top 10 steel producers in the world with an existing annual crude steel production capacity of 30 mtpa. It is an integrated steel plant and is geographically diversified through investments in Corus, Millennium Steel and NatSteel Holdings, Singapore and a well-established marketing network in 50 countries.
“The company has impressive expansion plans which have the potential to catapult it to one of the leading players in the steel industry. Steel as a commodity is in a long-term bull market and Tata Steel is likely to be one of the major beneficiaries. The demand from domestic as well as international players is expected to increase with the economic stability in the world,” says Kapur.
Invest Shoppe, therefore, recommends a ‘Buy’ on Tata Steel.
3. Maruti Suzuki India Ltd. 2 Nov 2009, 1441 hrs IST
Outlook: “Maruti will continue to be a dominant player in the PV segment, and will enjoy a preferred brand image in the domestic market. Moreover, capacity addition will provide it with additional support to spread its wings further into the overseas markets, and to enhance its exports. At the CMP of Rs 1, 380, the stock is trading at 15x FY2011E EPS,” says Sarabjit Kour Nangra, VP–research, Angel Broking.
Angel Broking recommends a ‘Buy’ on the stock, with a Target Price of Rs 1,656.
This(Srisai's Instinct Stock Calls) will be a New Initiativeof this blog to Publish Blog Author's Own Investment/Trading Calls for Short-Medium Termperspective. 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 4707
Nifty's 200 DMA comes nearly at 4633-4626 levels.... That level should be strong support for the near term.... But if breaches that level, then could expect further 2-3 downside from there.... Immediate uptrend only above 4792 levels... Then 4880 level will act as a Strong Resistnce Zone.... Keep Watch these levels and Trade according to that... Other Supports are 4688-4654-4633...
Sterlite: Cmp 771
Stock has support at 737 levels... Short term investors Keep 705 level as Stoploss and Go Long.... Accumulate upto 737 range and Keep SL at 705 level... That is strategy... Buy in Small Qty...
Jetair: Cmp 379
Stock has support at 335-340 levels... Buy at that level if falls below 350 and keep Stoploss at 315 levels and Go Long.. Resi @ 415-420 levels... Furhter Resi at 434-455 levels.... Upside only above 420 levels...
Results Review:
1) HinduStan Lever, Suzlon, RCOM, Bharti, Hindalco results well Below mkt estimates... 2)PNB,Sterlite results well above mkt estimates. 3) Unitech Profit down 50%.... 3) SBI, ICICI Bank Results above mkt estimates.... But ICICI Bank NPA is a concern... 4) Midcap results somewhat Ok than Largecaps... 5) Relinfra, JindalStel&Power are inline...
Prices collapsed in settlement week with the Nifty dropping 5.7 per cent to close at 4,711.7 points. The Sensex was down 5.5 per cent, closing at 15,896 points. The Defty was down 6.8 per cent with the dollar bouncing from over-sold levels
The poor sentiment was mainly due to continuous and heavy selling by FIIs. Although domestic institutions bought, they couldn’t match the supply on offer. Volumes were pretty heavy in both cash and derivatives segments. Advances were heavily outnumbered by declines. The BSE 500 dropped 6.2 per cent while the Midcaps dropped 7.8 per cent.
Outlook: The market is testing a critical support at 4,700 and there are some signs that it is over-sold. If the support holds, a short-term uptrend till around 4,950 level is possible. If the 4,700 support breaks, the next support is at 4,600. The intermediate trend is clearly bearish and net losses through November look likely. Expect a rise in volatility.
Rationale: The intermediate trend is into week two of bearishness, following 13 weeks of bullishness. Normally intermediate trends last between 6-10 weeks so net losses are likely through November. Chart patterns indicate a downwards breakout from range-trading between 4,900-5,100, with an initial target of 4,750, which has been exceeded. Volatility has already risen on the breakout.
Counter-view: Momentum indicators suggest the market is oversold in the short-term.
So there could be a bounce – especially if the FIIs reverse their attitude. The long-term trend is still positive as far as we can tell. In such circumstances, it’s possible that the intermediate downtrend could end fairly quickly. As of now, the maximum upside appears to be around 5,050. However, if the intermediate downtrend ends, the first signal would be 5,050 being exceeded.
Bulls & bears: There were sell-offs across most sectors except for sugar, which has been on a sustained bull run. The worst-hit sectors included banking and realty while the IT sector showed comparatively greater defensive strength. Metals also saw big losses following weak trends in international commodity markets. FMCGs displayed their traditional defensive strength in crisis situations.
This sort of across-the-board movement suggests that any market recovery will also occur across the board. As and when the market bounces, the worst-hit sectors will also rebound the highest. Hence, an optimist will be going long on the high-volume bank and realty stocks. Pharma and IT trends will depend to some extent on dollar movements.
MICRO TECHNICALS
Bajaj Hindustan Current Price: Rs 196.45 Target Price: Rs 215
The stock has corrected from recent highs and is consolidating on support. Keep a stop at Rs 192 and go long.
Book partial profits between Rs 210-215. There is a chance that the stock could rise till around the Rs 225 levels so it makes sense to retain around one-third of the original position above Rs 215.
TCS Current Price: Rs 628 Target Price: Rs 600
The stock is developing an encouraging pattern of higher highs and lows. However, it is in correction mode right now and likely to ease down till it hits support at around Rs 595-605. Keep a stop at Rs 635 and go short. Start booking profits at below Rs 605.
Dr Reddy’s Labs Current Price: Rs 1,019 Target Price: Rs 1,070
The stock has made an upwards breakout on reasonable volumes. It has a potential target of around Rs 1,070-1,100. Keep a stop at Rs 1,000 and go long. Increase the position above 1,040. Start booking profits above the Rs 1,070-mark.
Axis Bank Current Price: Rs 907 Target Price: Rs 990
The stock has hit a fairly strong support. If it rebounds, there could be a clear run-up till around the Rs 990 mark. Keep a stop at Rs 900 and go long. Increase the position if the stock crosses the Rs 930-mark. Start booking profits above Rs 970.
The stock is still settling down and consolidating around support between Rs 900-930. It is likely to test the bottom of this range again. Keep a stop at Rs 935 and go short. Start covering the position at around Rs 905.
Chris Wood, Equity Strategist, CLSA, says the chances of a deeper correction in global equities are rising. 
N Krishnan, Head of Research - 
