Market Outlook: Indian Markets are expected to open with gap down start mainly on the back of global unconstructive trends and higher expectation on inflationary concerns. On the global space Asian markets trading weak; Hang Seng, Seoul Composite down. On the overall basis we expect Indian market trade on cautious note with support near 5380 and any positive breakout would be expected only after 5550.
Global events to watch for:
Þ Personal Income and Outlays.
Global indices Update @ 8:
Dow Jones :11934 (-115.4)
NASDAQ : 2652 (-33.86)
Nikkei 225 : 9595 (-83.53)
Hang seng : 22008 (-163.0)
SGX CNX Nifty : 5434 (-49.50)
Gold (USD/t oz.) : 1501.8 (+00.90)
Nymex Crude (F) : 90.95 (-00.62)
INR / 1 USD : 44.94
TECHNICAL OUTLOOK: Flat session for the week.
When the market opened higher with a gap, fears of our markets following the US were allayed. But even the strongest bull did not expect the kind of advance that we had on Friday. As a result of this, the index regained all of what it had lost at the start of the week and added some more. The candle pattern for the week was a hammer type formation with the low of the week slapping right down into the moving average bands that we often use, on the weekly charts. Now, that is good support action. It is not as though we were not ready for it. Our letter of Friday had clearly signaled some positive action and we had also stated that readers who were of a positional play mindset, would be long from around 5290 levels and were holding with a revised stop at 5255. These positions are now nicely in the money.
Bank Nifty was quite a tiger on Friday and has built up a long range bar. Typically such bars coming after a basing action indicate the onset of a new trend. So, in all probability, the Bank nifty set off a rise on Friday. This is the index to follow in the coming week, perhaps more so than the Nifty itself. SBI had a nice outing on Friday and we find that action has returned to this market leader for the first time in June! So, even though it may appear as though lot of action may have taken place, we believe it is only part of the show in banking. There is some immediate resistance in Bank Nifty near 11000 but watch for that too to be taken out.
Nifty is reaching a resistance near 5515 and that is not far from where we closed the week. If the trends are to get stronger, we should probably get a gap near this level and then it would get taken out. If that happens, don't day trade the NF- take a position and hold on for something bigger. Alternatively, a gap open into the resistance area of the NF and Bank Nif that suffers immediate reversals, now that would be disappointing news for bulls. So be alert, folks, because this is the market and anything is possible!!
The huge build up in the Put options segment is certainly intriguing. PCR has raced to 1.28, going back to where it was a week ago! Dramatic. 100L+ shares added in 55/54/53 puts over the last two sessions is certainly noteworthy. Somebody big has put on those positions to squeeze the hell out of those that shorted the calls. If any reader is among those who are still holding short calls and the market continues higher, simply book loss and move out. This seems a bit big time here.
STRATEGY FOR THE DAY: Despite some nervousness from overseas markets, we have developed a distinct bullish bias here. Hence approach the market with an expectation of an advance. Unfortunately between 5500-5450 is a bit of a gray area that does not lend itself to analysis or trading (except very small day trades) and hence one is forced to wait for some trending action to be shown by the index before deciding. However look at breadth and leadership in other sectors as a clue about which way the wind shall blow today. If market moves higher then action will return to the small and mid cap and readers can participate there for a few days
Stocks to buy if market is strong:
VIP INDUSTRIES: After correcting from its recent high of sub 800 levels, this consumer durable counter has arrested further losses the moving average band. Ascending trendline was also not breached in this fall and gave follow thru on Friday indicating bulls are fully active in this counter. Volumes were light on declines indicating the bullishness. RSI also bounced backed from support levels. Look to BUY
| Entry | Stop | Target |
| Buy above 748 | 7 points | 755/758/762 |
| or Dips near 725 | 7 points | 732/735/738 |
EID PARRY: Recent sessions have seen prices crashing heavily on aggressive sell off. After yet another brief attempt to rally, prices yesterday turned down afresh, thus negating the rally attempt and signalling fresh sells once again. RSI has turned down from 40. Sell here.
| Entry | Stop | Target |
| Buy around 238-239 | 2.5 points | 242-3/245 |
| Dips near 232 | 2.5 points | 235-36/238 |
Stocks to sell if market is weak:
GLENMARK: Despite bullish day this counter moved sideways and gave sell off in later session indicating sell signal. this counter faced horizontal resistance of previous highs and moved south from that highs. Rsi also faced resistance from 60, which it has moved prior several times. Maintain negative bias
| Entry | Stop | Target |
| Sell below 309 | 3 points | 306/304/302 |
| rally near 313 | 3 points | 310/309/307 |
NIFTY RECOMMENDATIONS FOR THE DAY:
Buy Nifty above 5485 with stop 5465 for 5535.
Buy Nifty on dips to 5440 with stop 5422 for rise to 5510.
STOCK FUTURES RECOMMENDATIONS FOR THE DAY:
Buy HDFC bank above 2400 stop below 2380 tgt 2435-45
Buy Sintex above 167 stop below 163.9 tgt 172-74
Stocks in action for the day: OMC, Ranbaxy, ONGC, Adani Power, GTL, BPCL.
Empowered Group of Ministers on fuel headed by Finance Minister has decided to up diesel prices by Rs 3 per litre, kerosene prices have been hiked by Rs 2 per litre while LPG rates have been raised by Rs 50 per cylinder. The price hike is excluding value added tax (VAT). This hike is expected to bring some respite to the bleeding oil marketing companies (OMCs) as every Re 1 hike in diesel prices will save the exchequer Rs 6,700 crore. Under-recoveries on diesel stand at Rs 15.44 per litre, while that on LPG is at Rs 381.14 a cylinder. Kerosene under-recoveries at present are at Rs 27.47 a litre. "This price hike would cut under-recoveries loss by Rs 21,000 crore. The EGoM has also decided to cut customs and excise duties on petroleum products. The EGoM has announced a 5% cut in custom duty on fuel products. Customs duty on diesel has been cut from 7.5% to 2.5% while the 5% customs duty on crude has been abolished. This will entail a loss of Rs 26,000 crore to the government for the full year (FY12). It has reduced excise duty on diesel to Rs 2 from Rs 4.60 per litre. This will entail a revenue loss of Rs 23,000 crore to the government for the full fiscal year.
BPCL says -Under-recoveries to reduce by Rs 11,300 crore -Diesel under-recoveries to come down by Rs 6/litre -Under-recoveries on LPG at Rs 331/cylinder
Petroleum Minister says -No clarity on subsidy sharing mechanism yet -Unclear about date for ONGC FPO
ONGC says -Govt to take a call on FPO Some govt indication must on subsidy burden formula -Hard for markets to understand subsidy burden formula.
CAG -Refuses to hear RIL on KG-D6 field audit -Declines Oil Ministry's request to allow private firms to present their views
GTL : Sources -Lenders ask SBI Caps to do due diligence on GTL, submit report in 30 days -Lenders meet on June 24 to discuss GTL's debt concerns -Promoter of GTL to infuse equity worth USD 200 million into company -Stanchart has largest exposure to GTL worth Rs 1400 crore -Stanchart has subscribed to unsecured NCDs issued by GTL -ICICI Bank has exposure worth Rs 500 crore -Other banks include PNB , Axis Bank , Canara Bank , State Bank of Hyderabad -GTL’s total funded debt at Rs 3800 crore -GTL promoters has pledged 12% of total shares with Syndicate Bank , ICICI Bank -GTL has to repay Rs 750 crore worth 5-year ECBs by September 2011
Insurance sector: CNBC-TV18 Exclusive: Sources -Big blow to hopes of raising FDI in insurance sector -MPs to reject Finance Ministry proposal to hike FDI limit -Insurance Amendment Bill 2008 proposed FDI hike to 49% -Existing FDI limit at 26% -Parliamentary committee to adopt report rejecting bill on June 29 -Committee to say no justification for hiking FDI limit
Bharti Airtel : Sources -Bharti Airtel to restructure biz; says job losses to be minimal -Mobile, DTH, fixed line, broadband biz to merge -No estimate of job cuts as yet -Restructuring to take sometime -Some employees may be moved to africa, retail operations
Govt sources say -DIPP clarifies all sectors open to 49% indirect FDI -Discussion paper seeks comment on relevance of 49% FDI cap -Clarification to impact media, defence, multibrand retail-Insurance sector out of purview of DIPP clarification
DIPP discussion paper -Downstream investment of FDI funded indian company can be in any sector -Indian Company has to be owned & controlled by resident Indians -Clear case of abolishing all 49% cap
ReadyMade Steel IPO opens today with a price range of Rs 90-108/sh to raise 34.74 crore
Lanco Infra has informed Perdaman has not filed a claim in Western Australian SC against the company
SBI may look at raising Rs 15,000 crore through issuing bonds as the govt has scrapped out the rights issue option – TOI
Canadian based Ballard Power Systems is eyeing up to 10% stake in Adani Power with the deal valued at around USD 500 million – TOI
Mukesh Ambani meets PM: RIL gets copy of CAG report
City Union Bank to raise Rs 300 crore via QIP subject to the approval of the shareholders
Revenue Dept to ask entities which doesn’t have a substantial presence in Mauritius but are misusing the DTAA to pay taxes – FE
Viom Networks opts out of the race to acquire Reliance Infratel as it feel’s the co’s $ 5 billion valuation is unrealistic – ET
Spicejet seeks RBI nod to raise fund for aircraft deal, to raise USD 270 million – FE
Talwalkars to open more gyms in smaller cities with capex of Rs 100 crore – FE
USFDA inspects Ranbaxy ’s new drug manufacturing facility in Mohali with a positive nod, may help the company to resume its supplies to USA after a 3 year gap – ET
NMDC fails to acquire the mines of Kolmar coal co with the Russian firm selling a 51% stake to oil trader Gunvor International for around USD 400 million (Mint)
Tata Steel to utilize Riversdale cash to fund India’s capacity expansion plans & to also use for Europe capex & mining operations – Mint
Kingfisher Airlines to add 72 aircraft by 2015-16 (Mumbai Newstime)
Weizmann to list 2 companies Weizmann Forex and Karma Energy on BSE and NSE on June 28th (Business Line)
Tata Power ’s Mundra project may see a delay due to problems associated in the transmission link (BL)
Manwani is global COO of Unilever
L&T to invest Rs 30k cr more in Orissa
Videocon lines up Rs 15,000-cr investment for Orissa
MRF lifts lockout at Kerala plant
No comments:
Post a Comment