Monday, May 30, 2011

Stocks in Action for the day: OIL INDIA, Punj Lloyd, ONGC, Rel MediaWorks, DLF, Camlin.

Market Outlook: Indian markets are expected to open flat and trade in ranged manner with no triggers on the domestic front and no clear direction on the global space. Asia markets are trading mixed; Hang Seng flat, Straits Times up. Overall outlook for the markets today is that of cautious optimism with 5420 levels as a major support and key resistance near 5500.

Results Today: ONGC, M&M, Rel Comm, Reliance Capital, GMR Infra, NALCO, Aditya Birla Nuvo, L&T Finance, Nitesh Estates, DB Realty, Educomp solutions, BPCL, Oil India, Parsvnath dev, Punj lloyd, Cummins India, Mc Leod Russel, Money matters, Natco Pharma, National fertilizers, Network 18, Omaxe, Colgate, Sakthi sugars, Godrej Ind, India Cements,Indian Oil Corp, Insecticides India, Jyothy Labs, Skumar, Cox & Kings, Aegis logistics, Aptech, Spice mobility, EIH, Emami Paper, Dredging Corp, Edserv soft, Ackruti city, Gujarat Mineral development corp, Shashun pharma, Zenith Birla, Nocil, ABG Shipyard, Lovable lingerie, Suven lifesciences, Welspun India, Nirma, Shipping Corp of India, UTV Software & Comm,Unity infra, Brandhouse retail, Uttam Galva Steels, Kolte patil developers, A2Z Maint & Engineering.

Global events to watch:

Þ US Holiday: Memorial Day (All Markets Closed)

Global indices Update @ 8:

Dow Jones : 12441 (+38.82)

NASDAQ : 2796 (+13.94)

Nikkei 225 : 9517 (- 04.22)

Hang seng : 23125 (+07.38)

SGX CNX Nifty : 5470 (- 02.00)

Gold (USD/t oz.) : 1536 (- 01.20)

Nymex Crude (F) : 100.4 (- 00.16)

INR / 1 USD : 45.21

TECHNICAL OUTLOOK: Positive start to the week.......?

The trading of the last two days of the last week has raised small hopes that the long awaited rally could set in now. The behavior of the Bank Nifty has been equally encouraging as it has struggled but managed to hold on to its gains and is now beginning to put on some weight. We continue to look to this index to provide the lead for the Nifty to improve further. In that context, the better showing of several Bank stocks on Friday is encouraging too. If there is follow thru in this week, this should be the main sector that readers should concentrate.

After several gaps to the downside (which shifts the trend status to down in the short term) we saw an upside gap on Friday. This is the first of the signals that a rally attempt is being put together. Enabling this in the background is the status of the daily RSI (divergence) and Stochastic (set to exit from oversold) and ADX (terminated advance) and DI (began converging at the end of the last week). So we do have some momentum signals that are beginning to improve at the end of the week. What is now required is for the index to show some follow thru action this week to confirm the tentative signals that have appeared on the daily oscillator charts. The index has rallied to the 50% of the nearest declining leg. The 62% pullback is placed at 5515. Ideally, it should rally above this to confirm a rally status. Daily pivot is around 5450 while weekly pivot stays around 5400. These two can be used as stops for pending or fresh long positions created on the Nifty. Until they are lost, no need to think very bearish either.

Not much of a change in the option OIs at strikes. Interesting to find additions to 5800C and 5000P. The premiums on both strikes are pretty small and difficult to think of them as something that is being sold. If they are being bought then it is doubtless a directional position. Both? Certainly looks like two camps are taking positions in June series options. It will be interesting to see how this unfolds. Keep track. If market moves higher into a rally, then readers can consider shorting 5300P as a long play initially to be replaced by long futures once confirmation is in.

About 1.43 cr shares well expired in May, a larger number than the average in recent months. June series starts with 2.08 cr shares, lower than recent months. Bank Nifty starts with about 15L shares, on par with recent months with about 4.5 L shares expired in May. Cnx IT continues to have negligible OI. In options 5400P (60L) and 5600C (41L) start out as the largest OI strikes. Range is too narrow for a long month so this will shift. The large OIs at 5000/5100 appear ominous but could well be part of some spread strategies (long near the money put and short these strikes as a spread). lets see how the situation evolves in the options this month.

STRATEGY FOR THE DAY: Look for market to start better and then to hang on to that better start as a signal to start trading long. Check out action in Bank sector stocks as well as Bank Nifty. If these are faring well, be bolder about creating long positions in major stocks. Check out some of the stocks that have been pounded recently, for these could be in a recovery mood if the market begins to rally. So, in sum, everything depends on whether the rally attempt sees a follow thru. If not, stay idle until better signals appear.

Stocks to buy if market is strong:

HDIL: Unlike other construction counters this one has been defying the odds to move higher through last week's uncertainty. The steady uptrend in this counter has given a steady followthrough of the breakout confirming the bullish signals displayed in this counter. Volumes have been robust on Friday helping the momentum gain more strength. One can explore buying opportunities in this counter today.




Buy above 162

2 points

165 / 167 / 168

or Dips near 158

2 points

161 /163

HINDUSTAN SANITARYWARE: The bullish bias in this counter reaffirmed its intent to close the week on positive note. After a brief consolidation at higher levels the bulls are getting ready to take charge. With positive DI lines ticking upwards one can expect some upward traction in this counter today. Look to go long.




Buy above 162

2 points

165 / 167 / 168

Stocks to sell if market is weak:

JINDAL POLYFILMS: The sideways consolidation and the inability to move higher on Friday indicates bearish mindset in this counter. With the momentum not able to revive leading to a decline in prices the bears maintain their grip. The overall markets showed some resolve to move higher however the positive vibes did not reflect in this counter. As the momentum is turning lower one needs to stay alert to go short in this counter today.




Sell below 348

4 points

342 / 338 / 335


Buy Nifty above 5475 with stop 5440 for rise to 5520/40.

Buy on dips to near 5415 with 5395 stop for rise to 5485.


Buy BOI around 428-432, stop 427 tgt 440.

Buy Orchid around 290-93 stop 288.50 tgt 301.

Stocks in Action for the day: OIL INDIA, Punj Lloyd, ONGC, Rel MediaWorks, DLF, Camlin.

Oil India likely to come out with FPO in current fiscal: State-run Oil India is on the government's radar for disinvestment in the current fiscal and discussions are currently on to work out the modalities of a further public offer of the PSU, sources Negotiations are currently on (between the disinvestment department and the Petroleum Ministry) to work out the details through further stake sale. They will have to work out on what is their capital requirements Oil India, the country's second largest oil exploration company, which had earlier hit the market with an initial public offer in September 2009 mopped up over Rs 4,900 crore As part of the IPO, the government offloaded its 10% equity, while company issued 11% fresh equity.

Punj Lloyd eyes infra projects worth $ 2 bn in Africa: Looking at strengthening its position in rapidly growing Africa, infrastructure firm Punj Lloyd has bid for projects there and expects business worth USD 2 billion (Rs 9,000 crore) over two years from the continent.

Commerce Secy Says 'Exporters Should Keep Their Fingers Crossed On DEPB' If DEPB Terminated, Will Fight For Higher Duty Drawback Rates

CCEA to decide on Cairn-Vedanta deal Oil Min says GoM Decision On Cairn-Vedanta 'Unanimous' GoM Can Only Make Recommendations, Not Decisions Exclusive: Sources say GoM Approves Cairn-Vedanta Deal With Conditions

Tata Motors to launch new Nano variants in 2011-12: Homegrown auto major Tata Motors plans to launch new variants of its small car Nano during the 2011-12 financial year. Although the company has not specified anything about the forthcoming variant, it is widely speculated that a diesel version of the car is in the offing. Future products in pipeline for FY'12 -- Nano variants, Vista refresh, Manza limited edition, New Safari, Aria 2WD. Currently, Nano is available in three different petrol variants and are priced between Rs 1.41 lakh and Rs 1.97 lakh.

Timbor Home IPO opens; expects to mop up Rs 23cr: The initial public offering of Timbor Home Ltd, manufacturer and retailer of modular kitchen, will hit the market today, through which the company expects to raise over Rs 23 crore. The company has set a price band of Rs 54-63 per share for the initial public offering of 36.9 lakh equity shares. Timbor hopes to sell these shares at the upper price band of Rs 63, which would rake in more than Rs 23 crore. The proceeds would be mainly utilised for expansion plans. Through the offering, the firm would sell 25 per cent of its shares. The IPO, starting on May 30, would end on June 2.

VMS Industries IPO of 64-72 lakh equity shares with a price band of Rs 36-40/sh opens today

Rel MediaWorks To Raise Up To Rs500 Cr Via Rights Issue

M&M Says: To Mull Merging Automotive Business Into Co today

Vikash Metal & Power board to consider rights issue of shares subject to the approval

L&T Finance: To consider the issuance of debentures on private placement basis

Automakers plan to step up discounts from June to reverse a slowdown in sales triggered by rising fuel prices & interest costs (ET)

ILandFS Investment Managers selling its stake in SEZ in Gurgaon promoted by Ansal properties with a 20% return in four years (ET)

Idea Cellular & Tata under CBI scanner for alleged violations of licence conditions in 2005-06 (ET)

DLF plans to sell off its 5 IT parks & its hotel business to raise Rs 7000 cr in the next two years & cut its increasing debt of Rs 23,990 cr (ET)

BHEL is pursuing two private sector orders valued at Rs 1200 cr to set up gas based projects having a total capacity of 300 (mw) (Mint)

SAIL hopes to buy iron ore mines in Afghanistan & is also eyeing a 24% stake in Singapore’s MEC Coal via separate consortium (Mint)

Lohia Auto in race with Atul Auto & M&M to acquire 95.38% stake in Scooters India (Mint)

Adani Group plans a JV with Coal India to exploit one of the coal mines it has bought in Australia (Mint)

London Venture may be hit between TTK & Reckitt Benckiser as spat worsens as well as Reckitt moving the company law board against TTK on account of growing differences (ET)

Reckitt Benckiser to sell Paras personal care arm with companies like Emami & Dabur in race to buy it out (BS)

Camlin stake sell of 51% with Kokuyo Co Ltd to be announced today & the deal’s valued at Rs 110-115/sh (BS)

Shares of Binani Cement to be delisted from BSE & NSE from today with promoters acquiring 5.6cr shares with an exit price of Rs 90/sh

Unitech Q4(QoQ) Rev 1055 crore Vs Rs 659.79 cr ((Est: 759 cr)) Profit 100 crore Vs Rs 111 cr ((Est: 146 cr0) EBIDTA at 162 crore vs Rs 208 crore ((Est: 255 cr))

Sun Pharma Q4FY11 YoY Rev +35% to Rs 1463 cr vs Rs 1080 cr EBITDA +6% to Rs 443 cr vs Rs 418 cr OPM 30% vs 39% PAT +12% to Rs 442 cr vs Rs 394 cr

Fortis Healthcare Q4FY11 YoY Rev +26% to Rs 415 cr vs Rs 329 cr EBITDA +12% to Rs 53 cr vs Rs 47 cr OPM 13% vs 14% PAT +8% to Rs 29 cr vs Rs 27 cr.


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