Tuesday, May 3, 2011

Stocks in Action for the day: Nalco, BEML, RIL, OnMobile, Triveni Engg

Market Outlook: Indian markets are expected to trade negative terrain on the back of mixed support from the global counters. From a trading point of view we expect profit booking attempts in the upper regions as market is expected to trade volatile this week as we see many economic events like RBI Meet today. RBI may take tight steps on Tuesday with an investor-pleasing 25-basis point increase in policy rates to tame the inflation beast that is galloping away. On the global space Wall Street ends lower; crude slips further while Asia trading lower; Straits Times, Taiwan Weighted slip. Overall outlook for the markets today is that of cautious optimism with 5650 levels as a major support and key resistance near 5800.

Results today: Pfizer, Escorts, SKF, Thermax, Finolex Cables, Gujarat Siddhee Cements, Phillips Carbon Black, Essar Shipping, Amrutanjan, S&S Power Switch Gears, Wyeth, Logix Microsystems, Maharashtra Seamless, Eimco, Elecon India, Jindal Drilling & Industries, Surana Industries

Global events to watch

Þ Motor Vehicle Sales

Þ Factory Orders

Global indices Update @ 8:

Dow Jones : 12807 (- 03.18)

NASDAQ : 2864 (- 09.46)

Nikkei 225 : 10004 (+154.4)

Hang seng : 23746 (+25.67)

SGX CNX Nifty : 5682 (- 36.50)

Gold (USD/t oz.) : 1544 (-12.50)

Nymex Crude (F) : 112.8 (- 00.36)

INR / 1 USD : 44.30

Technical Outlook: Market continues to be shaky...

The week starts on a rather weak note as prices slid to test a two week low at 5703.That low has held but just barely. The bounce from it was rather meager and the participation of stocks in it was more of short covering rather than some fresh buying. Unless we see good new buying emerge, rallies cannot last. Thus we need to see better price action today if there has to be some revival in prices.

The previous swing low at 5690 looms in the background. If prices go beneath this then the first of the lower top and bottom will get established. That will produce some commentary from many observers and lead to some self fulfilling moves. However, absence of that down move would not automatically mean an uptrend. The buy trigger is now receding as it is placed near 5900 levels. So our action is pretty clear. If the market shows weakness, we need to get into action. If it does not, then we need to be a bit slow and watch how things pan out before taking action.

The intra day chart of the NF shown today (15 minutes)is evocative of the weakness. The prices are caught in a down sloping pitchfork. The three arrows on the chart are the monthly, weekly and daily pivots. It is noted that prices currently are below all three. Today's price action should carry above 5750 at the minimum if it has to put together any up move for the day. Support of the median line (which curtailed yesterday's moves down) has sunk further lower to around 5675 so there is room for declines if weakness shows. Note that the upper channel of the pitchfork is also placed at 5745. The oscillator charts are hugging the oversold zone so that too indicates more declines. Stochastics are showing strength bands and hence next rally still remains a sell opportunity. Lastly, calls from 5700 thru 6100 were added aggressively (about 50L shares). While some of that will surely be longs but chances are more that they are shorts. So that is yet another reason to look for declines.

Strategy for the day: Look for yesterday low to be taken out as a sign that more declines to occur. Stay out if that does not happen. No long positions to be taken by swing traders in the Nifty. Day traders can take a view on longs during the day based on whether prices hold lows or drop into support zones. Results flow has now shifted to bashing the ones that come up with in line or bad numbers. This betrays a bearish bias to the trend. So bulls be easy on the trigger while bears can be more active.

Stocks to buy if market is strong:


Prices have been trapped in a sideways range bound phase over the last one and half months. This was also owing to the presence of a gap region on the daily time frame. Being unable to breakout from this gap had kept pressure on the trend and eventually prices started to slip in recent sessions. Yesterdays sharp fall has moved below the gap region and closed lower. Looking weak, sell.




Sell below 187

2.5 points

183 / 181

Or rally to 190-91

2.5 points

187 / 185


This counter too has been moving in a broad trading range since the start of this year. During second week of April 2011 prices topped out at the upper end of this range and since then has been on a declining leg. Last sessions decisive fall indicates some supplies stepping up here. Momentum has grown weaker and fall was accompanied by rising volumes. Sell.




Sell below 393

5 points

386 / 382 / 378

Or rally to 405

5 points

398 / 394 / 391

Stocks to sell if market is weak:


This counter witnessed a massive sell off on almost all sessions last week and ended on a negative note. Yesterday too prices were seen moving lower. However, double support around 49 region has helped them to close above it with a small pullback from intraday lows. RSI has hit support at 40. Chances are that if this support is held, prices could bounce up from here. Buy if higher.




Buy above 50

1 point

51.5 / 52.5


Buy Nifty 5755 stop 5730 for rise to 5820.

Sell Nifty below 5703 stop 5722 for fall to 5655.


Buy Orchid above 311 stop below 308 target 316

Sell Educomp below 453 stop above 458 target 445

Stocks in Action for the day: Nalco, BEML, RIL, OnMobile, Triveni Engg

Hero Honda -April total sales at 5.17 lakh units versus 3.71 lakh units (YoY) -April scooter sales cross 35,000 units

Ex-dates -OnMobile Global: Bonus issue 1:1 -Triveni Engineering: Scheme of arrangement -State Bank of Travancore: Dividend of Rs 10/share

Vaswani Industries IPO of 1 crore shares with a price band of Rs 45-49/sh closes today -QIB's: no subscription -NII: 7.4x -Retail: 0.43x

Finance Ministry sources say -ONGC FPO likely early July, govt to divest 5% stake in ONGC -12,000 crore mop-up likely from ONGC FPO -Power Finance FPO on May 10, SAIL FPO expected early June

DGH -Asks RIL to drill 11 more wells in KG-D6 by April 2012 -RIL to give new plans for new KG-D6 wells in 2 weeks -RIL current KG-D6 output at 48 mmscmd -To meet RIL again in 1 week on KG-D6 wells

IOB says -Gross NPA 2.72% versus 4.47% (YoY) -NIM: 3.11% versus 3.27% (QoQ); NIM: 3.11% versus 2.74% (YoY) -ROA at 0.71% versus 0.53%

Amrutanjan board meet today to consider buy-back

Oil Secretary S Sundareshan transferred to Heavy Industries Ministry

Delhi HC adjourns bail plea of Sanjay Chandra, Vinod Goenka, 3 ADAG executives to May 4

Euro Ceramics: High Court of Bombay has approved the demerger of 'Mumbai Realty Division' of Ethix Realtors Private as a going concern with Euro Ceramics -SC to hear plea of bringing corporate honchos Anil Ambani, Prashant Rui & the Tata’s under the 2G probe of spectrum allocation (ET)

BEML bags a Rs 925 crore orders from Delhi metro rail corp for the supply of 136 intermediate metro cars (BS)

Voltas received Rs 110 crore after transferring its materials handling business to its Joint Venture co JM material handling solutions ltd (Mint)

Nalco to buy a 24% stake in a coal mine in Indonesia (Mint)


No comments: