Thursday, April 21, 2011

Stocks in Action for the day: SBI, RIL, Alok Ind, Indiabulls Real, TCS

Market Outlook: Indian markets are expected to open in a positive terrain mainly on the back of constructive support from the global counters. We are now into earning season which will keep markets on stock specific actions rather than industry. Overall outlook for the markets today is that of cautious optimism with 5820 levels as a major support.

Global events to watch.

Þ Jobless Claims

Þ FHFA House Price Index

Global indices Update @ 8:

Dow Jones : 12453 (+186.7)

NASDAQ : 2802 (+57.54)

Nikkei 225 : 9575 (+134.6)

Hang seng : 23712 (+192.3)

SGX CNX Nifty : 5913 (+39.50)

Gold (USD/t oz.) : 1507 (+01.20)

Nymex Crude (F) : 112 (+00.64)

INR / 1 USD : 44.38

Technical Outlook : Strong buying seen at declines...

After starting off with another against-the-trend gap, the market put in a mid session low and then took off on the back of some very brisk buying that has brought the index once again to the doorstep of 5900s. Will this be yet another repeat of earlier days of this week? Possible but considering the quality of the stock moves it seems like it may survive. We will know for sure if the prices commence above 5885 today and then sustain above it too. Why this level? Because it is the area of the down 1x4 angle line coming off the recent high in the intra day chart. The bottom around 5700 seen earlier was almost exactly on the down 1x1 angle line so normally the next move is usually to the 1x4 angle. This set up also suggests that there could be a move till about 5908 as well so do watch out for that in case the market moves higher today. Only something beyond that will indicate something new.

On the Bank Nifty chart a similar set like this has already occurred on the daily charts when prices rallied to the down 1x2 angle at 11996 on 15th. So the rally there has to be seen with some suspicion for now until some better evidence presents itself. We don't have such clear cut signals at the moment on the daily chart of the NF so the two indices are currently exhibiting non correlated moves. One can even think of some pair trades between the two indices perhaps? Just a thought.

Strong addition in puts with dilutions in the call options suggests some more upside action for today. Of course since the changes are in the 5800/5900 strikes this could also be some spreads being set up by both bulls and bears and one cannot simply presume the addition to the OI as fresh shorts. A ratio short put for example is being achieved at a cost of just 5 points while a vanilla spread is about 38 points (on LTP). Not bad, considering proximity to the expiry. Bull call spread 5700-5800 is priced around 80 and can be considered for reasonable return across a week as 5700 was well defended the earlier day and the push from 5800 yesterday was pretty brisk.

STRATEGY FOR THE DAY: Bias is upward so do look for some continuation upward today. Of course all bets are off if there is any downside gap. Stocks across a wider spectrum appear to be in good form so it appears like market is either following some news or expected news. Good results will act as a spur for movements so be on the lookout for the same. At the same time the trends are not so strong that bad news will be ignored. So pay attention to those also. Among sector plays one may look at Auto and Real Estate.

Stocks to buy if market is strong


Prices shot up sharply last session on aggressive buying and managed to breakout from a strong overhead resistance around 252 and closed much higher. Also RSI after a long time managed to breakout from 60 levels and stage a fresh rally ahead. Looking good, go long.




Buy above 261

4 points

268 / 272 / 275

Or dips to 254-52

4 points

260 / 263 / 266


This counter has been witnessing some good buying action this month. Prices yesterday were seen rising up smartly on decent volumes and also led RSI to form a positive reversal pattern. Expecting a further rally here, buy.




Buy above 197

2.5 points

201 / 203-04

Buy on dips 194-93

2.5 points

198 / 200

Stocks to sell if market is weak


Prices have been on a consistent fall last couple of weeks. Last three sessions have seen a substantial decline and have broken supports along the way. Momentum readings have taken a beating as well. Overall scenario continues to be weak, hence go short.




Sell below 201

2.5 points

197 / 194-93

Sell on rallies 204-05

2.5 points

200 / 198


Buy Nifty above 5885 stop 5860 for rise to 5915/5956


Buy HPCL above 380 stop 377 for tgt 385-87

Sell PFC around 238-240 stop 243 for tgt 234-32

Stocks in Action for the day: SBI, RIL, Alok Ind, Indiabulls Real, TCS

Results today: RIL, TCS, JSPL, Hindustan Zinc, Mindtree, Foseco India, IL & FS Investment Managers, Zensar Tech, Aditya Birla Money, Coromandel International, Premier, Raymond, Timken India, Noida Toll Bridge, Honeywell Automation, Fag Bearings

SBI ends teaser home loans, may make provisions of Rs 587 crore in Q4 SBI says -Changing interest rate structure in home loans in keeping with RBI norms -SBI behind the curve in revising base rate, 'no more teaser loan rates' from May 1 -Shifting special home loans from fixed to floating

SBI new scheme: -Home loans up to Rs 30 lakh to have interest of base rate + 1% -Home loans between Rs 30-75 lakh to have interest of base rate+1.5%-Home loans above Rs 75 lakh to have interest of base rate + 1.75%

WNS Q4 -Revenues of USD 159.5 million, up 4.5% sequentially -Net income of USD 5.2 million versus USD 5.8 million sequentially

Telenor Group asks Sanjay Chandra to step down as Unitech Wireless Chairman -Sources say: Sanjay Chandra refuses to step down as Unitech Wireless chairman

Unitech says -Sanjay Chandra's arrest not to impact company or company's realty business -Company managed by competent set of professionals & promoters

TCS:-Restructured the co back in 2008 which has shown results -No large scale structural changes to be made within the TCS for now -Organic growth is main priority currently -Always evaluate acquisition opportunities -Targeting many companies from emerging markets which are expanding
-Growth & margin equally important for TCS

Rainbow Papers board meeting on April 28, 2011-To issue and allot 40 lakh shares to Orient Newsprint, on preferential basis, at Rs 60 per share -To issue and allot 60 lakh warrants to Orient Newsprint on preferential basis, convertible in to equity shares, at a price of Rs 60 each.

Indian ADRs: Wipro up 4%

F&O Ban: Deccan Chronicle, Orchid Chemicals, Videocon Industries

Ex-dividend today: Nestle India (final dividend of Rs 12.5/sh & interim dividend of Rs 9/sh) -Indiabulls Real Estate to trade ex-scheme of arrangement today (Wholesale trading business goes away, small portion of overall business, shareholders to get 1 share of wholesale arm for every 8 shares)

Muthoot Finance IPO closes for QIBs, QIB portion subscribed 25 times, closes for NII (0.98 times) and Retail (1.3 times) today

Lloyds Steel Industries says not in a position to comment on news item of acquisition by Uttam Galva

Alok Industries promoter buys 14 lakh equity shares from open market

Jyothy Laboratories likely to rope in APAX partners for a USD 100 million funding to acquire Henkel & APAX to have 10-12% stake in Jyothy Lab (BS)

Jindal Steel makes second attempt to acquire all the shares of Australian based Rocklands at USD 0.25/sh valued at USD 88 million

Oil Marketing companies IOC, HPCL, & BPCL have ended the financial year 2010-11 with a collective loss of Rs 78,000 crore on selling petrol, diesel at a lower price (FE)

Karnataka High Court has asked Cyprus based Richter Holdings who acquired control of Sesa Goa in 2007 to return to IT-Department to settle a tax dispute (ET)

Tata Power has raised Rs 1995 cr through hybrid bonds with an interest rate coupon of 8.5%

Oil Minister Jaipal Reddy to discuss reasons for a sharp decline in gas production from RIL’s KG block & may reallocate gas in favor of fertilizers & power sector


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