Monday, July 4, 2011

Stocks in action for the day: Aban Offshore, Compact Disc, Kale Consult

Market Outlook: Indian Markets are expected to open in positive terrain on the back of global constructive trends and expect to consolidate in the range of 5700-5780. On the global space Fireworks wrap up Wall Street's best week in 2 years US stocks started July with a bang on Friday with Wall Street scoring its best week in two years on strong manufacturing data that eased concerns about slowing growth and Asian markets trading firm; Hang Seng, Nikkei gain. On the overall basis we expect Indian market trade on cautious note with support near 5580 and any positive breakout would be expected only after 5700.

Global events to watch for:

Þ US Holiday: Independence Day.

Þ All Markets Closed.

Global indices Update @ 8:

Dow Jones :12582 (+168.4)

NASDAQ : 2816 (+42.51)

Nikkei 225 : 9971 (+103.5)

Hang seng : 22764 (+366.1)

SGX CNX Nifty : 5683 (+50.50)

Gold (USD/t oz.) : 1491.2 (+08.60)

Nymex Crude (F) : 95.13 (+00.19)

INR / 1 USD : 44.58

TECHNICAL OUTLOOK: Is this a last leg of rally to consolidate…

Nice run, but it moved into the resistances on the spot indices and appeared to cave in. From a day trading perspective, the move was good enough to profit from. But lets not get carried away here. the way the market has moved over the last week has certainly reset the bar somewhat. More, we find that the moves in the Bank index as well as the Mid cap index- two indices that are certainly a measure of sentiment of traders- are also in good form. What is even more interesting here is that the situation in the NF chart is showing that there is more room on the upside (while spot is not) and so are the other indices. Which is the one the market will follow? Difficult to say but we would go with the traded index rather than the spot. Hence our bias remains up.

No doubt we have given some exit plays in the last week and rightly so too. The market has pulled back. Now if it goes below 5610 then we feel it should continue to drop until around 5545 where the next cluster of support lie. this is the zone of the square of 9 lines as well as a rising 1x1 angle line on the intra day charts. In addition you have a gap zone there and the moving average bands too are hovering around there. So, right now, that is the support zone to aim at. Day traders can of course short for that target but positional plays should await a drop into the zone and go long.

Option positions are seemingly built up for some short term decline. PCR at the start of the month is at 1.20 and max positions are seen at 5800C and 5300P. Now that is a comfortably large range compared to just a day ago when it was a lot narrower at 5600-5400!! Overall OI position is around average levels yet so it looks like we may have some range play for a week ahead.

Auto numbers appear to have disappointed the market. Hence we may continue to see the auto stocks remain under pressure. Selling calls in these stocks (where active) could be one of the approaches this week. Aban is impacted in an indirect way as there is some default in a related company and some stocks are to be liquidated. Look for some downside pressure on this counter too. We like the nice long range bar on Cairn of Friday in response to news. The weekly chart also created an engulfing pattern, right at former swing lows. Look for more upward action ahead and use intra week dips to buy.

STRATEGY FOR THE DAY: Market may remain a bit mixed and shift to a stock specific mode. It is even possible that the action could shift some to the small and mid cap area. So be alert for this broadening of market action because if it happens, then it will set up multiple opportunities for a short window of time. May also be time to revisit the Table area of the letter as we could see moves remain contained somewhat

Stocks to buy if market is strong:

GUJURAT ALKALI: The gradual descent in this counter reversed its decline on Thursday and followed the trend to move higher. The strong closing above its near term resistance around 147 levels highlight the bullish signals prevalent in this counter. The RSI has also shown some spark with a sharp surge pushing it above 60 levels. With momentum in favor of the bulls one can look to go long.




Buy above 149

1.5 points

151 / 153 / 154

or Dips near 146.50

1.5 points

148.50 / 150 / 151

STERLITE TECHNOLOGIES: The steady build up seen in this counter over the past few trading session finally displayed in the prices on Friday as the prices surged to post a strong closing. The volumes displayed on Friday was more than the average volume of last month. With RSI moving up smartly one can expect some upward traction to continue. Look to trade this stock with an upward bias.




Buy above 54

1 point

55.50 / 56.50

Dip near 53

1 point


Stocks to sell if market is weak:

BILCARE: The steady run to the top seems to have dissipated as the supplies are emerging at prior resistance around 418. The volumes on declines suggest bearish intent in this counter . The upper shadows for last two days suggests that the momentum is beginning to show some instability. If market shows sign of reversal one can expect this counter to head lower. Go short




Sell below 409

3.5 points

404 / 401 / 399

Rally near 416

3.5 points

411 / 408 / 406


Buy Nifty on dips to 5580 with stop 5550 for rise to 5660.


Buy Dabur above 118.20 stop below 116.80 tgt 120.5-121.

Sell Tatasteel below 589 stop above 594.10 tgt 583-81.

Stocks in action for the day: Aban Offshore, Compact Disc, Kale Consult

Aban Offshore Dax Partners submit bid for $6.75 mDax Partners New York based investment fund.

Ratan Tata on TCS Ratan Tata says TCS has not got notice from IT dept on body shopping Will wait for the right time to merge CMC with TCS.

Jindal Steel Bolivia commences dispatch of 20 billion tones of iron ore from EL-Multan mines in Bolivia & also to setup a plant with a $ 2.1 billion investment.

Compact Disc board to reconsider proposed delisting; Alert: HSBC had filed recovery suite and stalled delisting plans earlier.

Avantha Int buys 9.09% stake in Ballarpur International Graphic Paper Holding. Post the deal.

Ballarpur Int holding stake falls to 72.3%, and PE stake falls to 18.6%. The deal is stuck at a pre-money valuation of $1bn of BIGPH.

Govt to review & modify licensing conditions for DTH operators after law enforcement agencies & ministries of home & defence raised security concerns (FE).

Tea prices likely to rise on global shortage & robust local demand & exports are expected to increase with countries like Egypt turning to Indian market (FE).

Pantaloon set to sell its 54% stake in the financial services arm Future Capital holdings may utilize the funds to cut down on its debt (ET).

Chennai police on Sunday arrested W Hansraj Saxena, chief executive officer of Sun Pictures, for allegedly cheating a film distributor to the tune of Rs 82.53 lakh.

ITI looking to invest over Rs 2380 Cr for revival of its mfg unit and diversifying into other biz.

Kale Consultants sold its entire investment of 49% to Saksoft with an undisclosed amount.

Sobha Developers buys back 40.5% in SPV from Dubai based PAN Atlantic Investments .

Eicher Motor June total sales up 26% at 3,723 units (YoY).

Hero Honda June total 2-wheeler sales at 5.12 lakh versus 4.26 lakh (YoY).

Board Meets today - Essar Ports to approve results for March 31.

Kesoram Inds postpones its cement expansion project.

Kanoria Chemicals to enter renewable resource business.

Conditions for Cairn deal to cost govt Rs 5,000 crore.

JSPL keen to set up captive port in south Orissa.

Bhushan power & steel may lose coal block over delay.

Maharashtra co-op sugar firms receive bitter I-T pill.

NRL first PSU refinery to adopt online monitoring system.

Ex Dividend: Tata Steel Rs 12/sh.

F&O Ban: ABG Shipyard.

LE Waterina stock split from Rs 10 to 1.


No comments: