Friday, June 3, 2011

Stocks in Action for the day: RIL, Maxwell Inds, Dynamatic Tech, Sun TV

Market Outlook: Indian markets are expected to open with a positive sentiments and trade in ranged manner. Good news on Monsoons expectations could be the possible trigger in the near term. On the global space Wall Street ends mixed ahead of monthly jobs data and Asia markets are trading mixed; Nikkei down, Hang Seng flat. Overall outlook for the markets today is that of cautious optimism with 5510 levels as a major support and key resistance near 5620.

Global events to watch:

Þ Monster Employment Index.

Þ Employment Situation.

Þ ISM Non-Mfg Index.

Global indices Update @ 8:

Dow Jones : 12248 (- 40.00)

NASDAQ : 2773 (+04.00)

Nikkei 225 : 9524 (- 31.00)

Hang seng : 23136 (- 117.3)

SGX CNX Nifty : 5544 (- 18.50)

Gold (USD/t oz.) : 1534 (+01.00)

Nymex Crude (F) : 100.4 (- 00.67)

INR / 1 USD : 44.94

TECHNICAL OUTLOOK: Unclear trend...

At the open it seemed like the market would not give us a chance to exit from longs. But our usual five minute rule saved the day. Prices never broke the low of the first five minutes, indicating that the bearishness was already absorbed. However, fresh buyers were slow to step up to the wicket and the daily pivot at 5570 proved to be a tough nut to crack for the index and frequent attempts to cross this were rebuffed. The daily pivots for today drop down to 5555/10840 for today.

The Bank Nifty however was not so clear cut and the low of the morning was broken once during the day. However, lack of follow thru on the lower side was also an indicator that people don't really wish to trade on the short side much. The decline was set off after some news on the 2G matter involving Anil Ambani. But market was resilient enough to come up towards the close again.

Put additions were visible in the 5500 and 5400 strikes so there is little panic in the market. What continues to be interesting is the fact we have been pointing out every now and then. This is the steady addition to the 5800 Call. This strike has now become the highest OI strike among the calls. We believe this to be a long position and interestingly, we also find that the same strike has positions built in the months ahead too. Curious. What this implies is that the market has a chance to reach towards those levels- that is something no one is really giving much chance of happening. So do keep an eye out on the bullish side, people.

Despite the flurry we think the day may be somewhat subdued or flattish as the expectations of a minor reaction (at least) cannot be consumed with just a downside gap of yesterday. Hence we suggest not chasing stocks down today. Beware of any rallies in the ADAG stocks and avoid chasing those. Rallies are to be used to sell these and not buy them. Banks may want to take a day off, as is being signaled by the banking index.

STRATEGY FOR THE DAY: We have a slight bearish bias for today and this bias will be either worked or rested based on how the market behaves. Expectations are for a day with reduced volatility or dynamism and recommendations are to wait for trades to come to you rather than you chasing them down. Look at the Table today for trading near supports and resistance levels. Avoid breakout trades for the day.

Stocks to buy if market is strong:

RAJESH EXPORTS: Prices zoomed last session, thereby confirming the rally attempt seen the session before. They have broken out from a short term descending Gann line resistance and closed higher. Momentum has got lifted up as well and is looking good. Go long.




Buy above 96

1.5 points

99 / 101

or Dips near 94

1.5 points

96 / 97

FORTIS HEALTH: A razor sharp rise last session led prices to move to new swing highs and closed there too. They also managed to breakout comfortably from a valuation resistance around 164 levels and has closed above it. RSI has bounced up afresh from 60 levels. Buy.




Buy above 167

1.5 points

170 / 171

Or dips to 165

1.5 points


Stocks to sell if market is weak:

DEWAN HOUSING: Last couple of sessions have seen prices declining on selling activity after a small rally attempt. RSI too has turned down from resistance at 60. Overall sentiment continues to remain weak. Consider going short here.




Sell below 233

2.5 points

229 / 226

Or Rally near 237-238

2.5 points

233 / 231


Buy Nifty above 5575 stop 5555 for 5620

Buy Nifty on dips to near 5520 stop 5504 for tgt 5585


Buy L & T around 1683-1688 stop below 1667 target 1715

Sell Tata Motors around 1050-1058 stop 1065 target 1035

Stocks in Action for the day: RIL, Maxwell Inds, Dynamatic Tech, Sun TV

RIL AGM today

IFCI sells 22.81 lakh shares of Sun TV at Rs 297.75/share yesterday

Sun TV (Down 27.5% yesterday) -Most brokerages did a concall with Sun TV CFO yesterday Key Takeaways – biz is intact and no pledge shares were sold -Promoters hold 77% – 17.2% of promoter holding pledged

Dayanidhi Maran says -Was in political wilderness when Sun-Maxis deal happened -'Should be given a chance to prove my innocence' -'This is a conspiracy against me'

2G Case Update -2G Trial court dismisses plea for charging Anil Ambani, Dayalu Ammal and Ratan Tata -No mention of clean chit to TTML in CBI 2G Trial Court

IPO Corner -Timbor Home Ltd issue subscribed 5.78 times (x), QIB 0.65x, NII 3.2x, Retail 14.2x -VMS Industries issue subscribed 1.36x, QIB nil, NII 1.1x, Retail 3.4x

RBI says -Private, foreign banks to comply with new norms by August 31 -New norms aimed to rationalise internal vigilance of banks

Provogue says -Independent director Shahid Balwa's place vacated -Independent director Balwa missed last 3 board meetings

IFCI sells 22.81 lakh shares of Sun TV at Rs 297.75/share yesterday

Dynamatic Technologies through its wholly owned subsidiary, JKM Erla Automotive limited acquired Eisenwerke Erla Gmbh Germany

Govt plans to exempt public sector companies from taking mandatory approval from FIPB in order to achieve this fiscal’s disinvestment target of Rs 40,000 crore (FE)

Maxwell Industries board meeting to be held on June 03 to consider & discuss the restructuring of spinning business (Stock up 6% yesterday)

Bafna Pharma board meet on June 7 to mull issue of shares and warrants on preferential basis to promoters

Parekh Aluminex board to consider preferential allotment

Indo Asian Fusegear: AGM

-F&O Ban: Deccan chronicle

Gazprom, GSPC ink MoU for 2.5 MTPA LNG supply.

Punjab, Haryana post surge under cotton area.

Komli Media announces acquisition of Aktiv Digital.

GMR in talks with IIFCL for takeout finance.

Dynamatic buys Sanmar arm.


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