Get Out While You Can! Dow Headed to 5000, Charles Nenner Says
Posted Jul 15, 2010 07:30am EDT by Peter Gorenstein in InvestingQ1 Results: | http://economictimes.indiatimes.com/News/News-By-Company/Earnings/earnings/75410.cms |
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Q1 Results: | http://economictimes.indiatimes.com/News/News-By-Company/Earnings/earnings/75410.cms |
"There are still concerns lingering over Europe's debts and if the economy there is weak, consumption should be weak too," said Huey Yang, a fund manager with HSBC in Taipei. Infosys and local rivals Tata Consultancy Services and Wipro have raised salaries by 10 to 20 percent on average to keep staff from being poached by global rivals in a strong market. India's export-driven software services firms, however, face uncertainty on orders from Europe, the second-biggest market for the industry after the United States. Infosys, which counts Goldman Sachs, BT Group and BP among its more than 550 customers, forecast its 2010/11 dollar revenue to rise 19 percent to 21 percent, higher than 16-18 percent projected in April. |
Idea
Current price: Rs 69.5
Target price: Rs 63
The scrip has started losing momentum after a steep climb from 53 to the current levels. If it does react from current levels, the downside target could be about 63. However, it's possible that it could run up for another session or two and it's tough to set an upside target. Keep a tight stop loss at 71.5 and go short. Start booking profits below 65. If the stop is broken, go long with a stop at 71 and an initial target of 74.
Infosys
Current price: Rs 2,890
Target price: Rs 2,825-2,925 (Range trade)
Infy made an upside breakout when it closed above 2,825 last Friday. It hit a 52-week high at 2,910 just ahead of Q1 results. Today should see a lot of volatility. Infy has the potential to jump to 2,950, but it could also slide till 2,825. So, the trader should be prepared for swings between 2,825 and 2,950. Use 2,870 as a pivot. If the stock opens above 2,870, go long with a target of 2,925 and a stop loss at 2,860. If it opens below 2,870, set a stop loss at 2,880 and go short with a target of 2,835.
Tata Motors
Current price: Rs 790
Target price: Rs 810
The stock seems to have recovered from an intermediate downtrend but it is hitting resistance at 790-795. If it clears 795, an upside till 810 is possible. Keep a stop at 782 and go long. Increase the position between 795 and 798. Start booking profits above 808 because there will be a lot of selling pressure above 808-810. On the downside, there's a lot of support between 770 and 780.
The target price and projected movements given above are in terms of the next one trading session unless otherwise stated
IDBI Bank
Reco price: Rs 120
Target price: Rs 140
The government has agreed to infusion Rs 3,110 crore to aid the bank improve capital adequacy and expansion plans in future. It has also applied for increase in authorised capital, which would further give head room for raising capital for the bank and may come out with FPO in future for any capital requirement. The bank plans to continue its focus on infrastructure development which is traditionally its forte. It also plans for branch expansion of 300 branches to its existing network of 720 branches which will improve its franchise liability. The bank has sound asset quality with provision coverage of 75 per cent, well above RBI limit of 70 per cent. Maintain buy.
— Anand Rathi ResearchTitan Industries
Reco price: Rs 2,501
Target price: Rs 3,000
Volume growth in Gold recovered since H1FY10 and registered nearly 45 per cent volume growth in the fourth quarter of FY10. Expect a healthy 14 per cent volume CAGR driven by stable gold prices and pick-up in consumer discretionary demand. Consequentially, expect sales and earnings CAGR of 20 per cent and 25 per cent, respectively for FY10-12E. Improving realisations, product mix, operating leverage along with improved profitability of other businesses, will lead to 80bps margin expansion in the next two years. Expect Titan to sustain the return on equity at around 40 per cent and witness a 3x increase in free cash flows in FY10-12E. The urban discretionary demand could continue to remain healthy; Titan will be the significant beneficiary of the demand momentum. The stock is trading at 33x FY12E EPS. Maintain buy.
— Prabhudas Lilladher
Pratibha Industries
Reco price: Rs 410
Target price: Rs 508
Pratibha Industries secured a built-operate-transfer (BOT) project on annuity basis from National Highway Authority of India (NHAI). The project involves two laning with paved shoulders of Bhopal-Sanchi section of national highway (NH)-86 for 53.7 km under National Highway Development Programme Phase-III. The company has also bagged three projects worth Rs 210 crore for the construction of residential and commercial complexes. In the first quarter of FY11, the company witnessed a strong order intake, bagging two engineering, production and construction (EPC) orders and two BOT projects, totaling to Rs 477 crore. The order inflow for FY10 stood at Rs 2,685 crore. The stock is trading at 8.7x and 6.5x its FY11E and FY12E earnings, respectively. Maintain buy.
— Sharekhan
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Champions of Europe and now champions of the world, Spain captured football's Holy Grail for the first time with a 1-0 victory over the Netherlands thanks to Andres Iniesta's 116th-minute strike at Soccer City.
The solitary goal came with penalties looming as substitute Cesc Fabregas played in Iniesta and the little midfielder drove emphatically across Maarten Stekelenburg and into the far corner. With this victory – their fourth successive single-goal win in South Africa – Spain became the eighth name on the FIFA World Cup™ Trophy and also the first European team to have triumphed on a different continent. For the Netherlands, who lost defender John Heitinga to a red card in extra time, there is only the heartache of another tale of what might have been after they completed a hat-trick of Final losses.
This was a match preceded by much talk of two like-minded footballing cultures, of the influence of Dutchmen like Johan Cruyff and Rinus Michels, of 'tiki taka' and Total Football. In many ways, as the first 116 minutes showed, it was also a case of the irresistible force versus the immovable object. The Dutch had won 14 straight games to get to the Final, in qualifying and the tournament proper, and Spain 15 out of 16, their only slip the defeat by Switzerland in their first game here in South Africa.
It was the Spanish found their stride first, living up to their pre-game billing as favourites. Vicente del Bosque's side dominated possession and created the early chances. With the Dutch penned inside their half, goalkeeper Stekelenburg had to make a save after five minutes, diving low to stop a Sergio Ramos header from Xavi's free-kick from the right. Gerard Pique looked poised to follow up only to be denied by a combination of Joris Mathijsen and Dirk Kuyt.
Ramos came again in the tenth minute, beating Kuyt on the right and driving in a low centre that Heitinga deflected behind. From the corner came another scare for the Netherlands. Xavi played the ball back to Xabi Alonso whose cross went beyond the far post to David Villa but the in-form No7 sliced his volley into the side-netting. After those near things, however, both defences got on top with none of the flair players on either side able to take a grip on proceedings. Instead the yellow-card count began to rise with Nigel de Jong becoming the fifth player in Howard Webb's notebook by the time the half-hour mark arrived.
With the orange sections of the 84,490 Soccer City crowd finding their voice, Bert van Marwijk's men almost gave them something to sing about from a corner in the 37th minute. Robben rolled the ball to Mark van Bommel on the edge of the box and although he failed to make a clean connection he unwittingly diverted the ball on to the unmarked Mathijsen but the defender missed his kick. As half-time approached, Iker Casillas had barely had a save to make but entering stoppage time, he had to be alert to deny Robben at his near post as a spell of Dutch pressure ended with the winger spearing in a low shot from the corner of the box.
Puyol, Spain's semi-final matchwinner, showed his aerial threat once more minutes after the restart when he rose above Heitinga and headed to the far post but Joan Capdevila failed to make contact. The game was gradually opening up and the Dutch spurned a golden opportunity in the 62nd minute when Wesley Sneijder sent Robben running clear. Casillas came to Spain's rescue, deflecting the shot behind with his right foot when falling the wrong way.
Spain coach Del Bosque had already sent on Jesus Navas for Pedro on the hour and the winger helped pick a hole in the Dutch defence in the 70th minute. Xavi sent him flying down the right into the box and when Heitinga failed to deal with Navas's low cross, the ball fell to Villa who looked odds-on to score only to see his effort deflected behind. Ramos was equally profligate after 78 minutes when he headed over a Xavi centre when unmarked, after Villa had forced another corner.
Spain were looking the more likely winners and it took Sneijder of all people to foil Iniesta with a smart tackle after his jinking run into the box. Yet Robben's pace was a persistent threat and the Oranje No11 almost embarrassed Puyol in the 82nd minute, speeding clear of the Spain defender when second-favourite to reach a through-ball. Resisting Pique's attempt to tackle too, he was foiled only by Casillas, the captain saving at Robben's feet as the Dutchman tried to round him.
Extra time began with opportunities for Spain. Xavi failed to connect when well positioned and when the ball ran to Villa, his shot went wide off an orange shirt. Substitute Fabregas then broke clear on to Iniesta's through-ball but was foiled by Stekelenburg. Mathijsen headed wide from a corner but like waves, Spanish attacks kept rolling on to the Netherlands back line and Navas was close with a shot deflected into the side-netting.
Fernando Torres replaced Villa midway through the extra period and Spain gained a man advantage four minutes later with Heitinga's dismissal for pulling back Iniesta on the edge of the box, the offence earning him a second yellow. Iniesta would not be denied, however, and his fine late strike put Spain into the history books and left a Dutch dream shattered.
2010 FIFA World Cup™: Final- Add to iGoogle | |||||||||||||||||||||||||||||||
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ECSTASY
The Spanish team pose for photographers with the World Cup trophy. (AP Photo)
STOCKS: Mahindra and Mahindra: Buy
Investors with a long-term perspective can consider an exposure in Mahindra and Mahindra (M&M). The company ended FY-10 on a strong note, posting a growth of 40 per cent in revenues and a whopping 120 per cent in profits over the ...
STOCKS: Lupin: Hold
Shareholders can remain invested in the stock of Lupin. Though the stock price has more than doubled since the last ‘buy' recommendation in August 2009, the sustained traction in its formulations exports and an attractive pipeline ...
STOCKS: Bank of Baroda: Buy
Investors with a two-year investment horizon can consider fresh exposure to the stock of Bank of Baroda. The bank may continue to grow at higher-than-industry average rate (on the loan book front) and post strong profit growth in relation to ...
TECHNICAL ANALYSIS: Sizzling Stocks: Idea Cellular (Rs 66.8)
Idea Cellular turned red hot on Friday following the earnings upgrade by investment bank Credit Suisse. The bank upgraded the stock's rating to outperform from underperform and raised its target price. The stock advanced 13.3 per cent on ...
TECHNICAL ANALYSIS: Pivotals: Reliance Industries (Rs 1,055.8)
Since June 14, RIL has been trading sideways in a narrow band between Rs 1,050 and Rs 1,100. Last week's movement was with in this range and the stock witnessed trivial loss of Rs 12 for the week. The volume traded was below average. ...
A late surge in US stocks, allowed the Dow to post a back-to-back triple digit rally.
The Dow Jones Industrial Average added 121 points at 10,139. The S&P 500 gained 10 points at 1070, while the NASDAQ finished up by 16 points at 2175.
That sets the tone for our markets to open higher in the morning but it is going to be a litmus test for the markets. 5350-70 regions will be full of booby traps.
US markets were bolstered by a larger-than-expected drop in initial weekly jobless claims and a buoyant June retail sales data (Same–store sales). Obviously the sales look better because two holidays, the Memorial Day holiday and The Independence Day holiday sales have been added in June, which were not a part of the June sales last year. This apart, the Same-store sales numbers have to be taken with a pinch of salt. In one of the weekend articles, we will explain why.
The Bank of England kept its base interest rate at a record low of 0.5% for the 17th consecutive month and continued to leave its asset-purchasing program on hold. The European Central Bank also held rates steady.
Earlier in the day, International Monetary Fund raised its 2010 global growth forecast to 4.6% from 4.1%. The IMF said that while economic recovery will likely be faster than expected, Europe's debt crisis could stall the rebound.
The IMF also raised India’s economic growth forecast for 2010 to 9.4%. IMF’s forecast has been received well because GDP growth during the March quarter was only 8.6%. It implies that growth in the rest of the quarters will be much higher.
Today being a Friday, the bulls will like the week to close on a strong note. But a crossing of the important levels like 5366 looks rather premature. The markets will like to read the hand out by Infosys first, before it makes up its mind. For that we will have to wait till next week.
The bottom line is, unless the Nifty crosses the 5400 humps, don’t be in any hurry.
Godrej Industries and Gail look better placed for the day.
Disclosure : No holdings or trading positions in stocks mentioned or recommended to clients
Src: HDFCSEC
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Heard on the Street: Top insurer sells shares in D-Street favourite SBI
State Bank of India (SBI) remained a favourite among investors on Thursday, despite concerns over hardening interest rates.
According to the market buzz, there was some churn in the stock among foreign institutional investors, driving up the stock by 2.3% to Rs 2,356.75 on higher-than-average volumes in a firm market on Thursday.
But domestic institutions took a contrarian view on the stock, as it is felt that upsides are likely to be limited from these levels. Brokers said an insurance major was a seller in the stock on Thursday.
It is also speculated that the stock has been accumulated by a group of operators as a trading bet in the near-term. The stock is expected to outperform other bank stocks, brokers said.
Vadilal Inds gains 13% as takeover talk triggers rally
Shares of Vadilal Industries, a dairy product and food-processing company, have risen over 40% in less than two weeks, on market talk that the company could be a possible acquisition target for any large FMCG player looking to consolidate its position in the sector.
On Thursday, the stock rose 13% to close at Rs 144.95, after hitting a 52-week high of Rs 149 intra-day. Vadilal Industries’ revenues have improved steadily over the past few years, helping it gain a decent market share in milk and dairy products segments.
Dealers tracking the counter rule out the possibility of a hostile takeover, since the promoters own 61% in the company.
The company reported an earnings per share of Rs 8 for FY10. While the share price has more than trebled over the past one year, institutional investors have not shown any interest so far.
(Contributed by Nishanth Vasudevan & Vijay Gurav)
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May go to 4200 if Nifty breaks 4900: Daryl Guppy