Wednesday, April 6, 2011

Stocks in Action for the day: Cairn, SBBJ, ABM Knowledge, Bombay Rayon

Market Outlook: Indian markets are expected to open on the positive note and trade flat with some profit booking attempts. On the global space US markets end flat; oil prices rise further while Asia trading mixed; Hang Seng flat, Nikkei down. Overall outlook for the markets today is that of cautious optimism with 5820 levels as a major support.

Global events to watch

Þ ISM Non-Mfg Index.

Global indices Update @ 8:

Dow Jones : 12393 (-06.13)

NASDAQ : 2791 (+02.00)

Nikkei 225 : 9594 (-20.56)

Hang seng : 24166 (+16.03)

SGX CNX Nifty : 5941 (+15.00)

Gold (USD/t oz.) : 1454 (+01.60)

Nymex Crude (F) : 108 (-00.33)

INR / 1 USD : 44.45

Technical Outlook: Volatility makes it presence...

One thing that has now become obvious- intraday volatilty is here once again. This is volatility at a high price area and that is usually an indication of distribution. So readers stay warned that ending action has begun. After that surge in the end, one would have expected some big changes in the OI and we find the futures OI is changed by just 1Lac!!! This is typical of the game when some distribution is on.

Looks like option traders too are in a bit of a quandary. Yesterday was all Call activity whereas the earlier day was all Put activity. So where does that leave us? Waiting for some more clarity, that is where. Today's activity needs to be checked carefully. If the concentration is on the call side again, then the market is readying for a dip. Note that yesterday's high was a lower top compared to the high of Monday. If 5870 is broken now, then index would form the first lower top and bottom. The daily pivot hovers around the 5905 levels. Yesterday we broke below the pivot but zipped above near the end. We watch the action today also. We have not seen the pivot being broken for two days in a row. If that happens, then it is a change. All changes are signals from the market to us to be alert for action.

Bank Nifty is still in good form. But around 12050 we find some good resistances looming.So be careful if you go fresh long. Nifty has also reached the overhead trendline resistance. Top so far has been seen on Monday 4th which was TCD. If prices cannot exceed those highs, it would be better to consider that the high may be in for now. Next TCD is around 15th and the final one for this month is around 29th.

STRATEGY FOR THE DAY: Flat open can be expected. The way to look at the Nifty has been detailed above. Small range volatility can of course present problems and only way to avoid that is to use the levels in the Table and fade the dips and rises. B group action is heavy and that is the place to concentrate for a few days more. Chances are that index may not really go anywhere but lot of action could continue in the small and mid cap space. Momentum investing therefore should continue.

Stocks to buy if market is strong


Since end of Feb 2011 prices had been undergoing a tight consolidation, moving in a narrow range. Last sessions razor sharp rally has finally led prices to breakout from this range and move higher. The rise came on high volumes and has also led RSI to scale higher. Go long.




Buy above 42.5

1.5 points

44.5 / 45.5

Or dips to 41.5

1 point

43 / 44


After bottoming out around the low at 66 prices have been gradually rising in the last one month. Yesterday they renewed their advance after a small corrective phase and prices moved to new swing highs and closed there too. Momentum readings have got a fresh boost. Consider buying here.




Buy above 90

1.5 points

93 / 94

Or dips to 88.5

1.5 points

91 / 92

Stocks to sell if market is weak


Prices have been under pressure for quite some time now and moving in a broad sideways range in the last three months. Having reached the upper end of this range prices have been struggling and showing signs of a dip down. Yesterdays negative close gives a possible sell opportunity below last close.




Sell below 320

3 points

315 / 312


Buy Nifty above 5945 with stop 5925 for 5995.

Sell Nifty if below 5870 stop 5906 for drop to 5812.

Stocks in Action for the day: Cairn, SBBJ, ABM Knowledge, Bombay Rayon

Bombay Rayon open offer at Rs 300/share -AAA United BV makes open offer for 20% of Emerging Voting Capital -AAA United BV open offer triggered post conversion of GDR into equity

Sesa Goa makes open offer for Cairn India -Offer to open April 11 and close on April 30

CCEA - CNBC-TV18 Exclusive-CCEA to take up Cairn-Vedanta deal on Wednesday-Cabinet, CCEA meeting on Wednesday-CCEA to discuss creation of National Clean Energy Fund-CCEA to discuss proposal to revise Balmer Lawrie-CCEA to discuss wheat bonus for rabi season-Cabinet to discuss DTAA proposal with Kenya & Columbia

Wockhardt says want to settle FCCB issue out of court - NW18-Wockhardt FCCB holders filed winding-up plea against company-Bombay HC to hear winding-up plea versus Wockhardt on May 3
Wockhardt says-No development on FCCB dispute so far

Godawari Power and Ispat:-Company's subsidiary M/s Hira Ferro Alloys ltd has agreed to acquire 8.5 MW Bio-Mass Power Plant on Slump Sale Basis as going concern for 10 lk only
Alert: Hira Ferro Alloys also listed (was up 10% yesterday, market cap Rs 143 crore)

Export ban on iron ore from Karnataka will be lifted wef from 20th April- Agencies

Goa Carbon results today

Shiv Vani Oil board meet for fund raising up to Rs 500 crore

Maruti hikes prices across models to offset rising input cost. Price rise effective from April 4

Hyundai Motors to raise prices of all vehicles by 1.0-1.5%

SRF buyback of 23 lakh shares at Rs 380/share commences on April 6

ABM Knowledge bags order worth Rs 63.32 crore E-Government contracts by MCGM in the space of e-Municipality.

Solvay Pharma: Ex dividend Rs 25.5/share

F&O Ban: KFA, Suzlon

National pharma pricing authority has rejected Pfizer’s request to hike the price of imported drug Medrol (ET)

Jyothy Labs is the sole bidder for a majority stake in Henkel India has offered Rs 10/sh for the stake (ET)

Lupin files suit to stop Ranbaxy from launching fenofibrate a generic version of Lupin’s cholesterol lowering drug Antara in USA (ET)

State Bank of Bikaner & Jaipur rights issue of 2 crore shares at Rs 390/share opens today & closes on April 11 (BS)

Risewell Credit private has made an open offer to acquire 34 lakh shares of Golden Securities Ltd at Rs 18/share (BS)

Vijayrath Mercantile Private Ltd has made an open offer to acquire 3.9 lakh shares of Baid Global Ventures Ltd at Rs 202/sh (FE)


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