Market Commentary 18.11.11

After a stellar show last year, the Indian economy has hit a rough patch amid mounting concerns about the euro area debt crisis and anemic US growth. The weakened macro-economic fundamentals are reflecting in the large twin deficits, which in turn are hurting the rupee. A depreciating rupee is bad news.

The recent sharp selling in stocks can be partly attributed to rupee’s fall. It may hit new lows shortly. The RBI says it is risky to try and prop up the currency.

In short, there is more pain ahead. The start is again going to be lower, as world equities continue to slide. Rising borrowing costs for the debt-stricken eurozone nations is unnerving global investors. US markets closed down while the VIX was up 3%. European benchmarks too dropped. Asian indices are mostly in the red.

There may be some recovery but don’t expect any sustained rebound given the severity of the headwinds. A weekly closing below 4980 will sour the mood further. Next major support is placed at 4700. Retail stocks will be in action amid reports that the Cabinet will consider FDI in multi-brand retail. 

Buy and Hold - GOLD CALL

Buy and Hold - GOLD CALL

Buy Mah and Mah around 777-788

hold for target 800, 824.90 ++

Market Commentary for 14.11.11

For some time now, global developments have been changing by the minute. Thankfully, Friday’s steep fall is likely to be reversed (at least in early trade) as global tidings are mostly encouraging. Italy has named a new premier while its parliament has passed tough austerity measures to control the debt crisis. Lucas Papademos took office on Friday as the new Prime Minister of Greece to save the debt-strapped nation from bankruptcy. Japan's economy has returned to growth after three quarters of contraction.

Asian markets are up and about. US shares rallied on Friday as did their European counterparts. So, the opening is set to be pretty good. The question is whether the early gains will be sustained amid a spate of domestic macro-economic issues.

With the dismal IIP report for September still fresh in memory, investors will have to contend with inflation data for October. Lots of earnings will be released in the next couple of days.

Retail stocks may gain amid report of a Cabinet note on allowing FDI in multi-industrial production (IIP) and inflation numbers.

Exit KFA, sell on every rise

±      About 100 pilots have quit Kingfisher Airlines in the last four months. (BS)

NOW YOUR TURN TO EXIT.

Result Update: Hindalco Industries (Q2 FY12) – BUY

CMP Rs127-130, Target Rs155,165 + Upside 37.5%

 

Buy SBI on dips, target 1877 & 1904 ++

BEST pick in dips

Market Commentary for 11.11.11

The Indian market was spared a rollercoaster ride on account of the holiday. There may be some adjustments to make especially during the initial hour. In case you missed it the main US indices had plunged ~3% on Wednesday after the yield on 10-year Italian bonds rose to its highest levels of 7.48%. The good news is that overnight the Dow Jones ended 113 points higher while S&P added 11 points and Nasdaq closed in the green.

To add to the global confusions, Standard and Poor's said that it had mistakenly announced to some of its clients that it had downgraded France's top "AAA" credit rating, due to a technical error.

Meanwhile, it’s a tale of two ratings for the banking sector in India. Standard & Poor’s has upgraded India’s banking industry on Thursday even as Moody’s downgraded Indian banks to negative from stable, citing profitability, asset quality and capital concerns.

Besides the morning fluctuations, the Indian market will be driven mostly by the factory output, as measured by the index of industrial production (IIP) and inflation numbers.

Manappuram Finance (BUY, above Rs62.50, Target Rs66.50): On the daily chart, the stock has given an upside breakout, considered to be an important bullish signal. The stock is poised for further gains in the next few trading sessions. The undertone is reasonably strong and is likely to push price higher. After breaking above its 200-DMA last week, the stock has made higher tops. The upside breakout is well accompanied with impressive volumes. The stock recorded three-fold delivery volumes, exceeding its 5-day average. Based on above mentioned technical evidences, we recommend traders to buy the stock above Rs62.50 with stop loss of Rs60.50 for target of Rs66.50. (Duration 4 days)

Reliance Media (BUY, between 92-92.5, Target Rs100): Reliance Media  has been showing resilience in last 3-4 weeks with trough of Rs84 holding firmly despite volatile markets. Such a higher bottom formation thus result into a bullish pattern of double bottom which implies that downside risk for the counter is almost over. The RSI on weekly chart is taking shape of inverted head and shoulder in the oversold terrain which reinforces bullish trend in the counter. We recommend buying Reliance Media in the range of Rs92-92.5 with stop loss of Rs89 for Target of Rs100. (Duration 7 days)

Market Commentary for 09.11.11

A flat start awaits the Indian stock market as investors begin to digest the effects or after effects of the global developments. Italian Prime Minister Silvio Berlusconi has resigned to the fact that his stepping down after the adoption of key reforms would boost the image of Italy. Greece is weighing all options or rather finding all avenues to get emergency funds to avert bankruptcy; Prime Minister George Papandreou had announced he will step down.

With a host of results being announced today stock-specific activity will be seen. The inflation and IIP data is also awaited this week. Investors may adopt a cautious approach given the fact that markets are closed tomorrow.

The global markets are more or less positive. Japan’s Nikkei Stock is up almost a percent. South Korea’s Kospi is also up. US indices staged a rally ending nearly at the day’s high.

India's merchandise exports fell to a 12-month low of US$19.9bn in October triggering the trade deficit to rise to a four-year-high of US$19.6 bn in the month. The Centre’s indirect tax revenue dropped 2.5 % to Rs 302.78bn in October.

BTST; M&M Nov Future at 836.10

Buy and Hold; 
M&M Nov Future at 836.10
for TARGET ON TUESDAY 
847.90, 851 ++
SURE SHOT

Axis Bank (BUY, above Rs1,117, Target Rs1,145): Axis Bank is currently trading near support of 50 DMA, which most of the time turns out to be trend reversal when stock is into uptrend. The correction from the intermediate peak of Rs1194 has so far unfolded into a zig zag corrective form which confirms that stock is into a medium term uptrend. On the medium term chart stock is in process of forming right shoulder of inverted H&S which is a bullish pattern with RSI sustaining above 50 mark. We recommend buying Axis Bank Ltd above Rs1,117 with stop loss of Rs1,103 for Target of Rs1,145. (Duration 4 days)

Maret Commentary for 04, Nov 2011

The market will hope nothing goes wrong soon. For now, world markets are breathing little easy now that Greek’s PM has shelved the controversial plebiscite on the EU bailout. However, George Papandreou may still be in trouble as he braces for Friday’s confidence vote in parliament.

Indian indices will rise at start following the relief rally across global equities. But, the undertone may remain edgy over the ongoing political instability in Greece. Reports also suggest that Italian premier is under pressure to resign.

G20 leaders have urged eurozone counterparts to stabilise Greece and fix the two-year-old debt crisis. Leading nations have also agreed to boost the IMF war chest to deal with potential emergency. Meanwhile, the ECB has cut interest rates by 25 bps amid looming eurozone recession and turmoil in Greece. Italian bond yields softened post the ECB move after having jumped to euro area record. The G20 summit and US jobs data are among the crucial overseas events to keep on one’s radar. Back home, inflation continues to be in focus with food inflation jumping to nine-month peak. Petrol prices have been hiked by nearly Rs 2 per litre. Services PMI shrunk for the third successive month.

Sector Watch: 
Oil Marketing Co., Power & FMCG 

Sector Avoid: 
Metal, Infra, Banking, Realty, I.T., Auto & Capital Goods

Today Listing:

Indo Thai Securities 

 (BSE Code: 533676)

Cipla (SELL, below Rs290, Target Rs277):

On the daily chart, Cipla reversed from the resistance line which coincides with its Upper Bollinger Band, suggesting that the likelihood of further upside over the short-term has diminished. For now, the risk/return of establishing long positions is less than ideal. Yesterday, the stock declined with impressive volumes. Selling pressure could intensify in the counter below the levels of Rs288. The daily RSI has given a negative crossover which could provide immediate trigger for down fall. We advise going short on Cipla November Futures below Rs290 with stop loss of Rs295 for target of 277 (Duration 5 days)

Market Commentary for 2.1.2011

Just when world markets were beginning to settle down comes another jolt from abroad. And no prices for guessing where the latest shocker has come from - Greece. The prime minister of the debt-stricken eurozone nation has stunned everyone by calling for a referendum on the EU bailout deal.

The surprise announcement has only added to the doubts over the fate of the grand plan to tame the debt crisis. The fresh turmoil in the financial markets comes ahead of the two-day G20 summit in France later this week.

In another startling move, the Greek PM has replaced the top brass in Army, Navy and Air Force. For the day, attention will partly shift to the FOMC meet and remarks made by Fed chairman Ben Bernanke.

The ECB will take a call on whether to cut rates or not on Thursday while US monthly jobs report will in focus on Friday.

The start today will be down on the back of a worldwide selloff in equities. There could be some recovery later in the session if global cues improve. But, given the heightened uncertainty and volatility, it would be prudent to tread cautiously.

Buy and Hold M&M AT 839

Target : 880

Target Time Frame : 3 days

Fresh Entry : Yes

Stop Loss :834.90

Result Update: Hindustan Unilever (Q2 FY12) – Market Performer

CMP Rs375, Target Rs358, Downside 4.4%

Result Update: BPCL (Q2 FY12) – Market Performer

CMP Rs623, Target Rs650, Upside 4.3%