Market Outlook: Indian markets are expected to open in negative sentiments mainly on the back of feebling global support and domestically the negative triggers come from Petrol prices hiked by Rs 5/litre, steepest hike ever. On the global space US stocks down on Fed jitters; euro at 6-week low and Asian markets trading weak; Nikkei, Hang Seng down. Overall outlook for the markets today is that of cautious optimism with 5480 levels as a major support and key resistance near 5550.
Results today: JSW Steel, Amara Raja Batteries, Edelweiss Capital, MRPL, Hindustan media ventures, HMT, S.E. Investments, Globus spirits
Global events to watch:
Þ Housing Market Index
Þ Empire State Mfg Survey
Global indices Update @ 8:
Dow Jones : 12595 (-100.1)
NASDAQ : 2828 (-34.57)
Nikkei 225 : 9587 (-60.92)
Hang seng : 22075 (-200.9)
SGX CNX Nifty : 5524 (-56.50)
Gold (USD/t oz.) : 1490 (-02.70)
Nymex Crude (F) : 98.89 (-00.76)
INR / 1 USD : 44.91
TECHNICAL OUTLOOK: Cautious start to the week....
Friday's trading was all over the place. Thursday had ended bearish and so the expectations for Friday was for some weakness. But election results sprang a bit of a surprise and charged up the sentiment which led to the prices moving up pretty smartly. We had suggested a short on rally trade but the sudden turnaround should have served as a warning to readers. You see, ultimately, an advisory service can only convey so many things in the matter of a few words in a letter. Market situations are very, very dynamic and it is the responsibility of the reader as well to remain alert to altered states from the previous day to the opening phase and adjust the advice accordingly. At such times one can even refer back to the office for some clarifications if necessary. Our analysts will be glad to help out. In sum, when the market action and our analysis is in sync, act firmly and even aggressively; however, when market action (at the start) differs markedly from the previous day analysis, stay back and reassess the situation before acting.
The sell off near the ending stage was a bit of a disappointment. No doubt, prices had reached the weekly pivot area at 5615 and hence some selling was certainly due but the sharp fall was not very encouraging. Still, two weeks running, the weekly candles show lower shadows- so some buying interest is certainly there at the lower levels. This can become a positive if the market stays above the candle body levels in the coming week (i.e. above 5580). Failure to do so consistently could mean that the good work of the last two weeks at the lower levels would get undone. So beware of this as we progress thru the week.
PCR OI finally climbed sharply by Friday, reaching 1.05 now. Still in bearish territory but one can now look for some resurgence by the bulls. Of course, if this reading slips beneath 1 again, then it is better to retain the bearish bias. To refresh reader memories, a PCR reading around 1.20 can be considered "normal" state of affairs. When market is bullish, the PCR tends towards 1.50 while during the time the market recedes, the PCR drops to around 0.85 or so. We can therefore use the levels of the PCR as a readout of the sentiment of the market.
There is little spike in volatility levels despite the gyrations of the last few sessions. So it appears that professional traders are not really shaken by what has happened. There is no meaningful additions to the options. The 75L OI at the 5400 Put seems to be now and indicator of some support zone and one should look for this size to increase as a signal that market may go higher. the largest call OI is seen at 5800 but we don't consider that significant right now. ATM calls have shed good amount of OI and that is still a pointer to higher index levels for now.
Bank Nifty has bounced up nicely from a support trendline. One can look for some more gains here and if that happens, it could also charge up the index. 10800 to be kept as stop on this view. For the Nifty, 5550 is the weekly pivot. A running monthly pivot for May gives us a reading of 5615 which was last week's high. So keep these two levels as reference as we step into the new week.
STRATEGY FOR THE DAY: We can continue to keep a slight bullish bias despite the late day sell off on Friday. Bank sector as well as the index have traded well and they are usually good indicator of sentiments. Friday also saw lot of large cap names up and about and hence suggest some upside. Hence look for index to stay above weekly pivot. Stock action may continue to be focused on the large caps names so concentrate there for tradable. Not yet time for any momentum investing. If the trend sustains then we can begin to look at that area.
Stocks to buy if market is strong:
GENESYS INTL
The Midcaps seems to flourish despite the market sentiment moving into the red. This IT counter has been witnessing huge buying participation and has seen a strong surge in its fortunes. With RSI moving into 60 levels after a long while one can expect the buying momentum to push prices up further. Go long.
| Entry | Stop | Target |
| Buy above 208 | 2.5 points | 212/215/217 |
| or Dips near 202-203 | 2.5 points | 207/210/212 |
Stocks to sell if market is weak:
UFLEX
This packaging counter has slipped into consolidation as it is unable to gather itself to move higher. The daily chart indicates bearish sentiment emerging leading to a deteriorating momentum. With bears having an upper hand one can expect some sharp declines in this counter if market turns negative. Stay alert to go short.
| Entry | Stop | Target |
| Sell below 187 | 2 points | 184 / 183 / 181 |
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VARUN INDUSTRIES
The last few trading sessions have not been encouraging for this steel company. The gradual descent and the gap down opening on Friday signals the onset of a bearish trend. The sharp drop has pushed the prices below the value area support of around 212.With momentum losing ground one can expect the bears to gain more foothold , one can explore selling opportunities today.
| Entry | Stop | Target |
| Sell below 208 | 2 points | 205 / 203/202 |
| Rally above 211-12 | 2 points | 208/206/205 |
NIFTY RECOMMENDATIONS FOR THE DAY:
Buy Nifty above 5570 with 5538 stop and tgt 5620
Sell Nifty below 5520 stop 5550 target 5465
STOCK FUTURES RECOMMENDATIONS FOR THE DAY:
Buy Lupin above 441 stop 438 target 451
Sell Jet 470-75 stop 476 target 464
Stocks in Action for the day: Sun TV, SUZLON, Gammon Infra, JSW Steel, Tata Motors, M&M, VIP Industries
Sun TV Sun TV Promoter Kalanithi Maran Pledges 2.5 m Shrs Of Co Kalanithi Maran Has Pledged 13.8% Sun TV Shares So Far
DoT Issues Licence Cancellation Notices To Idea In Karnataka Issues Licence Cancellation Notices To Spice In AP
Gammon Infra board meet on May 19 to consider & approve the rights issue
PFC fixes FPO price at Rs 203/sh with a discount of 5% to retail investors & Eligible employees.
Orient Ceramics & Industries board approves scheme of arrangement of amalgamation of Bell ceramics with self.
Mangalam Cement board meeting on may 21 to approve the scheme of amalgamation of Mangalam Timber products with self
F&O Ban: Deccan chronicle, Orchid chemical, Power Finance Corp
JP Associates Q4 (standalone) Revenues up 18% at Rs 3982 cr EBITDA margin at 21.4% vs 25.5% PBT at Rs 388 cr vs Rs 435 cr PAT at Rs 288 cr vs Rs 22 cr
JP Power Q4 Operating income down 14% at Rs 148 cr PAT down 72% at Rs 17 cr
SUZLON Q4FY11(QoQ) Revenues: Rs 7276 cr vs Rs 4494.37 cr(expectation of Rs 6005 cr) EBIDTA: Rs 1024 cr vs Rs 182 cr (expectation of Rs 545.98 cr) EBIDTA margin: 14.07% vs 4.05%(expectation of 9.09%) EBIT: Rs 773 cr vs Rs 40 cr Forex gain of Rs 220 cr vs loss of 63 cr Net profit of Rs 432 cr vs Loss of Rs 253.37 cr(expectation of Rs 135.82 cr; analyst estimates ranged from loss of Rs 100 cr to net profit of Rs 310 cr)
Balrampur Chini Q4 FY 11 Standalone YoY Revenue dn 0.5% at Rs 469 Cr vs Rs 471 Cr PAT up 3 Times at Rs 113 Cr vs Rs 28 Cr EBITDA Margin at 44% vs 17.4%
Pantaloon Retail Q3FY11 YoY Standalone Net sales: 2811cr vs 2390cr (up 17.6%) Net profit: 51cr vs 37.5cr (up 36%) EBIDTA Margins: 8.8% vs 9.1%
Tata Motors Global sales - April 2011YoY Total global sales up 12% YoY at 87114 units Global CV sales up 20% YoY at 41179 ( including Tata , Tata Daewoo and Hispano Carrocera ) JLR sales up 9% YoY at 19431 units Jaguar sales DOWN 13% at 3079 units Land Rover sales up 14% YoY at 16352 Global PV sales up 6% at 45935 units
MoM Total global sales down 21.3% at 87114 vs 110785 units Global CV sales down 27.5% at 41179 vs 56814 units JLR sales down 19% at 19431 vs 24101 units
Purvankara Q4 FY 11 Consolidated YoY Revenue up 26% at Rs 155 Cr vs Rs 123 Cr PAT dn 61% at Rs 17 Cr vs Rs 44 Cr EBITDA dn 23% at Rs 27 Cr vs Rs 35 Cr EBITDA Margin at 17.4% vs 28.5%
Tata Coffee Q4 FY 11 Consolidated YoY Revenue dn 1% at Rs 335 Cr vs Rs 338 Cr PAT Rs 18 Cr vs Rs 6 Cr EBITDA Margin at 14.8% vs 17.5%
DEN Netowrks Q4FY11 Consol Rev +15% to Rs 282 cr vs Rs 246 cr OPM 8.2% vs 11% PAT Rs 8.11 cr vs Rs 17 cr –down 52%
VIP Industries Q4FY11 Consol YoY Net sales: 166cr vs 137cr (up 21%) Net profit: 16.3cr vs 9.1cr EBIDTA margins: 15.5% vs 14.3%
Geodesic Q4 cons (QoQ) Net sales up 5.8% at Rs 237.7 cr vs Rs 224.5 cr OPM at 47% vs 46.8% PAT up 5.7% at 92.5 cr vs 87.5 cr
DECCAN CHORNICLE Q4FY11 YoY Rev +61% to Rs 308 cr vs Rs 192 cr EBITDA loss Rs 19 cr vs Gain of Rs 81 cr (OPM was 42%) NET Loss Rs 46.5 cr vs PAT Rs 6.5 cr Other exp Rs 100 cr vs Rs 17 cr, RM +197% to Rs 192, Interest costs Rs 19.5 cr vs Rs 11.6 cr
Claris Life Q1CY11 Rev Rs 157 cr, EBITDA Rs 38 cr, OPM 24%, PAT Rs 20 cr
ASTRA ZENECA Q4FY11 Rev +29% to Rs 126 cr vs Rs 98 cr OPM 13% vs 5% PAT Rs 8.3 cr vs Rs 2.6 cr
Unichem Q4FY11 Rev +2% to Rs 178 cr vs Rs 174 cr EBITDA Rs 23 cr vs Rs 41 down 43% OPM 13% vs 23% PAT down 56% to Rs 14.8 cr vs Rs 33.89 cr
Dewan Housing Q4FY11 Income from ops: Rs 413 Cr Vs Rs 252.8 Cr (Up 63%) PAT: Rs 58 Cr Vs Rs 41.7 Cr (up 39%);
Bhushan Steel Q4FY11 vs Q4FY10 (y-o-y) Net Sales up 22% at Rs.1966 cr vs Rs.1609 cr EBITDA margin at 31% vs 26% PAT up 20% at Rs.288cr vs Rs.241cr ((includes foreign exchange gains of Rs32 cr))
Kalpataru Power Transmission Q4 FY 11 Standalone Revenue up 4% Rs 885 Cr vs Rs 852 Cr PAT up 9% at Rs 62 Cr vs Rs 57 Cr EBITDA Margin at 11.2% vs 10.9%
Bartronics India Ltd Q4 FY1 1 Consolidated Net Sales up 10% at Rs 292 Cr vs Rs 265 Cr PAT up 59% at Rs 46 Cr vs Rs 29 Cr EBITDA Margin at 20.5% vs 24.5%
Plethico Pharma Q4 FY 11 Consolidated Revenue up 5.4% at Rs 354 Cr vs Rs 336 Cr PAT dn 23% at Rs 55 Cr vs Rs 71 Cr EBITDA Margin at 20.1% vs 21.7%
Vascon Engineering Q4 FY 11 Consolidated Revenue up 62% at Rs 395 Cr vs Rs 244 Cr PAT up 81% at Rs 29 Cr vs Rs 16 Cr EBITDA Margin at 11.4% vs 12.7%
Jammu & Kashmir Bank Q4 FY 11 Standalone PAT up 16% at Rs 139 Cr vs Rs 120 Cr NII up 29.7% at Rs 415 Cr vs Rs 320 Cr
Areva T&D Q1FY11 YoY Net sales up 28% at Rs.995cr vs Rs.777cr ((CNBCTV18 estimate at Rs.934cr)) PAT up 7x at Rs.29cr vs Rs.3cr ((CNBCTV18 estimate at Rs.45cr)) OPM at 8% vs 6% ((CNBCTV18 estimate at 11%))
Patel Engineering – Results above estimates Q4FY11 YoY Net Sales up 33% at Rs.1596cr vs Rs.1197cr Exps up 38% at Rs.1482cr vs Rs.1076cr PAT down 50% at Rs.36cr vs Rs.72cr ((PAT impacted by high interest costs)) EBITDA down 14% at Rs.130cr vs Rs.151cr
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