The
consolidation phase in Gail has come to an end with breakout from
formation of ‘falling wedge’ pattern on the daily chart. Hence forth the
positive momentum could accentuate further as stock has managed to
breach the resistance of Rs418 which corresponds to descending
resistance line of the ‘falling wedge’ pattern and also formed higher
high on the weekly chart. The stock is also showing a positive
divergence on the weekly chart, thus supporting buying argument in the
counter. We recommend buying GAIL above Rs418.5 with stop loss of
Rs408.5 for Target of Rs440. Duration 7 days.
Friday, October 28, 2011
Diwali Dhamaka 2011
The festive season is here and the overall environment
remains uncertain. This Diwali, we bring you 11 prime stock ideas (and a
couple of alternative assets too), which you can rely on to deliver
healthy returns. These recommendations reflect our strategy of sticking
to defensives and being selective with respect to cyclicals. It is
certainly not the time to be aggressive; instead adopt a pragmatic and
balanced investment approach. Safety will continue to assume importance
as structural issues both global and domestic are unlikely to get
resolved in the near term. We are hinting at Euro Zone debt issues,
looming risk of US recession, paralyzed domestic GCF, policy impasse,
sticky WPI and the overshooting fiscal deficit. In terms of sectoral
mix, we advise keeping equilibrium between defensive sectors FMCG,
Pharma, IT and cyclicals Banking, Auto, Metals. We are reasonably
confident that investment in the following 11 stocks on a portfolio
basis would provide higher return than the broader market over the next
year. Though in the near term Nifty could trade in the range of
4,700-5,200, it is likely to gradually move upwards in the medium to
long term.
We
also recommend investments in debt products especially NCDs as it
represents a great opportunity to get oneself locked-in at higher rates
and for longer time frame. Amongst the NCDs, we recommend instruments of
Muthoot and Manappuram due to their attractive yields and underlying
profitability of their business. As we believe that commercial interest
rate cycle has peaked, these NCDs may start trading at premium to par
value given the high coupons.
On
the commodity side, we believe Gold will continue to be a ‘Safe Haven’
and provide steady return for yet another year. The key factors that
would add to the shine of Gold would be heightened risk aversion on
deepening of crisis in Europe and US, loose global liquidity and
imperative weakening of the US Dollar. As the most economical and
convenient way of investing in Gold is through ETFs, we recommend Gold BeEs having the lowest expense ratio and high liquidity.
We expect this holistic investment approach during Diwali to not only give you smart returns but also ‘peace of mind’.
Happy Diwali!
Tata Motors Ltd – Call Closure, BANG on target
Reco
price Rs160, Call closure price Rs205
We had recommended a BUY on Tata Motors in our detailed
strategy note Conviction Buy Idea dated 16th August, 2011 with a target price
of Rs205 (post split). The stock has hit a high of Rs207.9 in today’s trading
session. We recommend investors to book
profit at current levels as the stock has rallied ~28% since our
recommendation. Although we remain bullish on the long term business potential
of the company, we see limited upsides from the current levels.
Wednesday, October 26, 2011
Tuesday, October 11, 2011
Dear SMS Clients,
Those clients
registered with DND will not get SMS now onwards, kindly take note of
the same. We have stooped taking fresh subscription for SMS.
team, www.northpole77.com
team, www.northpole77.com
Monday, October 10, 2011
Market Commentary
An indifferent start is in the offing owing to mixed global markets and nervousness ahead of the earnings season.
We expect the undercurrent to be cautious given the global headline
risks. Any material fall in volatility could auger well for the markets.
FII flows will also be important. IIP, Infosys results and Inflation
will be the three big events for the week apart from all the daily dose
of news flow from the offshore markets.
Telecom stocks will be in focus ahead of the release of the New Telecom Policy.
Maruti is another stock to keep an eye on owing to fresh labour
troubles at its Manesar plant. Sun TV could be under pressure amid
reports that the CBI has raided the Chennai premises of Dayanidhi Maran.
While the US jobs data was better-than-expected, sentiment on Wall Street was hit by a downgrade of Italy and Spain by Fitch.
US stocks closed lower but European stocks gained, notwithstanding a
string of downgrades by Moody’s. The rating agency has warned of a
possible downgrade of Belgium.
French
President Sarkozy and German Chancellor Merkel have reportedly agreed
to recapitalize Europe's banks without clear details.
Friday, October 7, 2011
Dear SMS Clients,
Those clients registered with DND will not get SMS now onwards, kindly take note of the same. We have stooped taking fresh subscription for SMS.
team, www.northpole77.com
team, www.northpole77.com
Book profit in Tata Steel at Rs418 given on 5th October.
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Market Commentary
Its
déjà vu time for central banks in the developed world, as they ramp up
efforts to calm nervous financial markets amid mounting fears of
double-dip recession. The Bank of England surprised markets with a fresh
round of monetary stimulus despite inflation running high. ECB’s
outgoing president Jean Claude Trichet unleashed a couple of liquidity
boosting programs to relieve tension in the European credit markets.
Eurozone authorities have shown readiness to recapitalise banks.
In
the US, President Obama is trying hard to sell his jobs plan, calling
it an insurance against another recession. US Senate will vote on the
Obama jobs bill and the controversial currency bill next week. But,
before that, all eyes will be on Friday’s jobs data.
The
opening is likely to be a positive one following a three-day rally on
Wall Street and recovery in European stocks. Asian markets are in good
shape as well. The banking pack could see some buying for the day. For
our markets, the crucial event will be the RBI’s policy meeting on Oct.
25. Pressure is building on the RBI to take a pause. Corporate results
will also start pouring in shortly.
Corporate Snippets
± Maruti has fixed production targets at 30-40% higher for October, compared to September when it produced 73,000 cars. (ET)
± The Department of Telecommunications is known to have cleared a showcause notice to Idea Cellular on cancellation of its telecom licence in Punjab. (BS)
± Suzlon Energy has bagged an order from GAIL for supply of wind turbines to the state-run gas distribution majors upcoming project in Karnataka. (BS)
± Mundra Port and Special Economic Zone has emerged as the sole bidder for Chennai port’s Rs36.8bn mega container terminal project. (BS)
± The telecom department has asked its legal wing to examine the 3G roaming agreements between Bharti Airtel, Vodafone and Idea Cellular. (ET)
± BHEL has bagged a Rs38bn order from Dainik Bhaskar Power for setting up a 1,320-MW thermal power plant in Madhya Pradesh. (BL)
± Essar Power has earmarked an investment of US$8bn in the next three years for setting up thermal power projects in the country. (BS)
± Bahrain-based telecom firm Menatelecom has awarded WiMAX managed services contracts to Tech Mahindra and Huawei Technologies for the year 2012-13. (BS)
Thursday, October 6, 2011
Wednesday, October 5, 2011
Buy and Hold for 7 days
BUY TATASTEEL around 400
WITH AT SL OF 390
hold FOR TRG OF 419.90 ++
(DURATION 7 DAYS)
WITH AT SL OF 390
hold FOR TRG OF 419.90 ++
(DURATION 7 DAYS)
European market update: FTSE index up 2.5%, CAC index up 3%, DAX index 2.5%
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