Thursday, June 2, 2011

Stocks in Action for the day: Titan, Mastek, Sabero Org, Punj Lloyd, GMR

Market Outlook: Indian markets are expected to open with a negative gap and trade in ranged manner. Good news on Monsoons expectations could be the possible trigger for the near term, We believe that lower-than-expected domestic GDP data is discounted in recent underperformance in markets. On the global space Wall Street slips more than 2% on poor economic data following to that Asian markets are trading weak; Hang Seng, Nikkei slip. 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 Jobless Claims

Þ Monster Employment Index

Þ Productivity and Costs

Global indices Update @ 8:

Dow Jones : 12290 (- 279.6)

NASDAQ : 2769 (- 66.11)

Nikkei 225 : 9568 (- 150.7)

Hang seng : 23263 (- 363.3)

SGX CNX Nifty : 5537 (- 55.50)

Gold (USD/t oz.) : 1539 (- 04.20)

Nymex Crude (F) : 99.92 (- 00.37)

INR / 1 USD : 44.89

TECHNICAL OUTLOOK: End of the move....

More gains accrued on long NF and Bank Nifty positions. Now these are two trade positions that we have been recommending in our letters for the past few days, particularly Bank Nifty. It is indeed heartening to see the way they have performed. The indices are now up for 5 straight sessions and we have now come to the first of the TCDs for June set for today. While price wise we don't really have any serious resistances here, the near term trend could certainly be a bit overstretched here and hence we may have a halt because we are at a time turn point. Many stocks also show a 4-5 days of successive rise. While on the one hand this can be taken as a sign of a trend being launched, the other view on this is also that matters may be a bit overstretched in the near term.

What one could do here is to take some money off the table if holding longs. The daily pivots on the NF (5570) and BNF (10920) have moved up just below current levels and can be used as the nearest stop. No newer gaps were formed so the last gap area of 5480/10750 would continue to be the next level of supports and trend change estimates. But waiting for those levels could decimate a lot of accrued profits. This is something for traders to consider.

Put additions continued briskly suggesting that the traders view the trends bullishly for today as well. PCR jumped up further to1.37 while IVs were once again off a bit more. Some complacence could be replacing comfort and that is always a tipping point. But let us also not get ahead of ourselves. Like we stated earlier, use some trend point breaks to take profits. If market is in a mood to give more, we would be foolish not to accept more. Everyone wants more but we have to make ourselves deserving of more and only then shall it accrue. For that the right kind of mindset has to be brought for trading.

Among stocks, ADAG stocks, sugar pack etc are all seeing brisk short covering. No point in chasing these down. If trapped with old longs use this rally to exit some. Ditto with Auto stocks. The usual start of the month auto numbers thing is done and has not shaken up the trends any in most names. Don't get trapped into these at higher levels. It is a sector that is headed lower for now. Use rallies to short.

STRATEGY FOR THE DAY: With a TCD having reached, we should remain ready for some reversal trades today. Those with long positions should either take some profits or tighten stops on longs while more aggressive day traders can ready for some shorts. Of course, let the market signal some and dont be in any big hurry. Better to avoid chasing stock futures at higher levels today unless there are some compelling reasons.

Stocks to buy if market is strong:

SHOPPERS STOP: Recent sessions have seen some good upside action since last month as prices have been making good efforts to climb higher. After a small breather early this week they were back in action last session with a strong rise. RSI has crossed 60 and a fresh buy signal has been generated. Go long.




Buy above 403

5 points

410 / 414

or Dips near 399

4 points

404 / 407

BAJAJ ELECTRIC After a steady decline since mid April 2011, prices finally found feet on hitting a low of 228 last week. Though a confirmed signal had not yet arrived, prices still had been making attempts to bottom out and move up. Yesterday we finally saw some fresh buying emerge, thereby indicating possible buying opportunity here. Consider buying if higher.




Buy above 254

2.5 points

258 / 260-61

Or dips to 250

2.5 points

254 / 256

Stocks to sell if market is weak:

DEN NETWORKS: With the recent rally attempt fizzling out, prices have been on a descent since last week. Yesterdays fall has accelerated the decline further and momentum is moving in sycn with prices as well. With the trend looking set for further fall, go short.




Sell below 101

1 points

99 / 98

Or Rally near 103

1 points

101 / 100


Exit Nifty longs around 5615.

Buy Nifty on dips to near 5530 stop 5520 for rise to 5602


Buy Tata Comm around 222-224 stop 220 tgt 228-230

Sell Ranbaxy below 541 stop 545 tgt 531

Stocks in Action for the day: Titan, Mastek, Sabero Org, Punj Lloyd, GMR

Govt sources say: -Cairn-Vedanta not on CCEA agenda for Thursday -Last minute addition unlikely in agenda -CCEA would take up Cairn-Vedanta deal by June 10

RIL to Oil Ministry: PTI -Review prioritisation of KG-D6 gas supply -Meet full demand of priority users like power, fertiliser, city gas

Airline companies in focus -State-owned oil companies cut jet fuel prices by about 4% -This is the second such price cut in a month -Oil companies reduced ATF price by Rs 2,327.89/kl or 3.95 % to Rs 56,466.11/ kl in Delhi -With the second cut, ATF price have come down by Rs 4,094/kl this month

Hero Honda May total sales up 14.7% at 5 lakh units (YoY) -Hero Honda on track to meet over 6 million units sales in FY12 -Hero Honda scaled up annual capacity to 6.15 million units

IPO Corner -Timber Home IPO of 36.9 lakh shares with a price band of Rs 54-63/sh closes today -VMS Industries IPO of 64-72 lakh equity shares with a price band of Rs 36-40/sh closes today

Ex-dividend -Shanthi Gears: Dividend of Rs 1/sh -LG Balkrishnan & Bros: Dividend of Rs 10/sh -HDFC Bank: AGM & Dividend of Rs 16.5/sh -Kansai nerolac paints: AGM & Dividend of Rs 10/sh -Sutlej Textiles & Industries: Final dividend of Rs 5/sh & Special Dividend of Rs 2.5/sh -ICICI Bank: AGM & Dividend of Rs 14/sh -SIL Investments: Dividend of Rs 1/sh -LGB Forge ltd: Annual General Meeting -Page Industries ltd: 1st Interim dividend Rs 5/sh

Delhi HC stops GMR from collecting airport development fee in Delhi following PIL (GMR holding a press conference today)

Punj Lloyd bags contract of Rs 890 crore from Abu Dhabi company for onshore oil operations

Rural development ministry has proposed that farmers should get 80% of the profits from resale of land bought from them for development (ET)

Bharti Airtel sings contract with Chinese equipment maker Huawei to expand its 2G & 3G networks in Africa for USD 400 million

Securities Appellate Tribunal allows PWC to re-examine statements of Satyam in the over Rs 7000 crore fraud case (ET)

F&O Ban: Deccan Chronicle

Sabero Organics open offer at Rs 160/sh

Power Grid board approves investment for establishing pooling stations at Champa & Raigarh at an estimated cost of Rs 1961 crore

Kavveri Telecom board approves addition fund raising through QIP,FCCB, ADR, GDR

Mastek board approves amalgamation of Keystone solutions with itself

Titan Industries proposes merger of Titan Properties with itself pursuant to the scheme of amalgamation to be filed with Madras HC

Indian pharma ingredient firms in Japanese generics race

Cairn Energy may give up non-compete fee on Vedanta deal

Honda's 2-wheeler arm for India plans to invest Rs 1,400 cr, inaugurates 2nd plant


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