Monthly Archives: September 2011

#91 Nifty Update

MARKET CLOSE:-
                        9/11 Twin tower crash anniversary was witnessed today. Friday and Monday were the victims for the crash almost 100 points each day. NIFTY closed again at a crucial level of 4946 keeping all the investors in a confused state again.

IN-HOUSE UPDATES :- 
Today market was down on the back of global markets while more slide was given to our market by IIP data. IIP was expected to come around 6.1% on MoM vs 8.8% but  actual was out at just 3.3%. Last time capital good sector was the best performer and this tym too but in the descending order.Capital goods output was at -15% vs 36% last months. This lead to a deep jump in the capital good stocks today. Fundamentally also we should avoid capital goods stock as it has major exposure to foreign market after IT sector. SO avoid stocks like CG, BHEL, LT etc at CMP. This friday we have a review of RBI policy and many Bond analyst expects a rate hike while many other market analyst including me feel that there will be pause in the rate hike because number is saying all. IIP data its at lowest. If further rate hike is given then growth of the country may be hampered. And growth is equally important in line with inflation. So may be RBI will press pause button. But market has already discounted the hike news and so you may see high volatility this week in the stock market. So avoid intraday trading this week. Oil India Limited (OIL) is planning to acquire blocks in africa. This move is on the report that India import 80% of its energy need and will import around 90% by next fiscal. On another hand on friday August car sales figures were out and it declined by 10% by leading market dragged by Maruti on labour issue. They have currently stopped accept bookings for New Shit variant. If you are planning to buy a car then i would advice to wait as you may get discounts on high stocks and less demand which is the current scenario of automobile industry. A government took a major step in commodity sector where they increased the export limit for rice and wheat and we may see boost in overall exports. Our overall exports for august came with an increase of 44% while imports were up by 41% but on net side we had increase in exports. A KPMG survey said that if corruption can be removed from India then we can beat GDP of china in next 2 yrs..Its nice to hear but you know that corrpution free India is not easy to achieve in such short span. 

GLOBAL FEEDS:-
China Inflation has cooled down to some extent which is a slight relief for the markets there. Talking about the US crises now major event will be FOMC meet on 20/21 Sept. Alen Krueger, who is the chief Economist Adviser to Obama said in an interview with bloomberg that industrial output should be increase to encourage Job employement. He says Infrastructure expenses should be increased to increase over employment. Krueger report suggested that if the person has studied one grade more than his colleague then he got 16% increment in salary. Thus Obama should concentrate on improving education sector to increase the quality of employment to avoid off-shore of the IT business.

NIFTY TECHNICALS:-
Technically market has given the close at crucial support of 4945 as i mentioned in my levels on friday. NIFTY is under the formation of downward sloping “inverted Head and Shoulder” pattern which if it gives breakout at neckline will be giving a vigorous reversal then the symmetric Head and Shoulder. MACD is almost flat but hasnt yet given a bearish crossover so market is at still on the edge. If market closed above 4927 for 2 more days then you may see some short covering .Today market opened gap down creating another gap at 4990-5060. So now we have two upward potential gaps which might be filled in near term .Strategy yet will be CAUTIOUS.


NIFTY levels for 13th September:-
R-4990                 S-4927
R-5017                  S-4882
R-5048                  S-4865
R-5082                  S-4800

#89 Nifty Update

“Mein talli mein talli, mein talli ho gayi”….No its not Malika sherawat but it was NIFTY who was singing today and was not able to control itself until 2pm after which it got support from its best friend Reliance and showed one side clear movement. NIFTY closed at 5153 which was my first resistance up by 28 Points. Today CAG report was discussed in parliament and made public. It accused Reliance of inflating high cost and many things (actually i havent read in detail) but the stock regained 4% from the low as i feel this news were already discounted by investors which had led reliance to make 52 week low of 720.For the first tym in this week NIFTY future has close in premium.. But who is buying??? Its the FII who is buying..>As per the Data FII had sold net $2 Billion in August but till tuesday of this week they had bought back $450 Million.. So guys you must buy few % of your long term portfolio. You might be thinking that i am continuously saying buy-buy since markets were 4800 but other papers are saying that they are expecting 4200 so wait for buy… But guys think practically. When the market was 4800 they were saying its difficult to cross 5000 and 4400 gates open and Blah Blah…but you all missed opportunity…I would just rather buy on each level..You will have good average and you won’t feel that u missed the bus. Now You will say that what base i have to say that market won’t crash from here?? But I am Not saying that it WONT bt it Might Not…why i am getting strong feelings for india is because of companies growth in such condition in each sector… 1) FMCG sector:- Unilver saw 10% growth in first quarter in india while overall was just 5.4% while P&G saw 6% growth in india for first quarter while overall was just 1% so for sure FMCG is a increasing sector 2)Telecom Sector:-Call rates are gonna be hiked and all companies are net adding subscribers so that is a good sign 3) Automobile sector:- Passenger vehicle of selected companies have seen downsales and that too of their personal labour problem while other 2wheelers , tata motors and M&M have seen marginally growth 4) Steel sector:- Essar oil is planning to Zimbabwe’s biggest coal mine which official said could serve zimbabwe’s iron ore demand for 1000 years while SAIL and other companies are bidding for Afghan mines.  5) Cement sector:- Cement sales have surged even in such off season so you may see sales doubling in next quarter and JP Associates is in talk with US Companies to expand their global reach so that is also a good move 6) Pharma Sector:- Lupin and Auropharma have got various nod and have strategic ventures with Italian and russian firms respectively to have marketing in india and their country so that is also a strong fundamental point. 7)Power Sector:- NTPC has joined 50:50 JV with Ceylon Elec board of Sri Lanka…so that is also a major event 8)Education Sector:- Educomp had been in IT raid but yet it received orders from Chhattisgarh govt for IT solutions in govt school…While Banking, Infra and Broking business are in some pressure but thats the matter of time.. But you could see in other sector many important event had occurred during such so called recession which says India is still on growth. On commodity side you mat expect gold to touch 26513 as it has made double top around 28200. Europe Bank didnt make any change in interest rate and kept it 0.5% . Now most awaited Obama’s and Bernake speech will be late in eve. Technically NIFTY seems to be strong over 5095. Now near term resistance is at 5188 and 5209. RSI  and MACD all suggesting a formation of Inverted head and Shoulder. And YEAH AM NOT SAYING YOU WONT SEE FURTHER DOWNFALL BUT YOU MAY START BUYING ON SUCH LEVELS TO NOT MISS ANY BUS!!!!
NIFTY levels for 9th September:-
R-5188                  S-5127
R-5209                  S-5111
R-5230                  S-5095
R-5265                  S-5064

#17 Stock Update

Stock recommendations:-
1. I recommend to buy HINDALCO with Stop loss of 147 tgt-169/176
2. I recommend to buy ICICI Bank with Stop loss of 876 tgt-914/924/963
3. I recommend to buy SBIN with SL of 1940 tgt 2086/2125/2197
4. I recommend to Buy Reliance with Stop Loss of 767 tgt 870/894

Disclaimer: Please Keep Strict stop loss due to volatile market. And this our Delivery Base Calls and not intraday

#88 Nifty Update

That was a whooping 90 points unbeaten by NIFTY!!!! Why unbeaten?? Just because it never went in red today.NIFTY closed at 5124 up 60 points. Around 11am there was a blast neat Delhi High Court!! Sorry for the families who lost they loved ones. But terrorist are also advancing as BMW is a suspected for the blast!! We should unite and fight with terrorism. Banking sector has been in the focus of investor this month because of 2 reasons 1). 16 Sept is the RBI policy 2) Its the most beaten segment in this downfall and valuation are attractive as they are cheaper. If you read newspaper these days you will find only 2 sector in  focus i.e., Banking and Steel. RBI is planning to reduce SLR to help industries buy more credit from the banks to push the growth in economy. While they have also asked banks not to charge on prepayment of loans which are on floating rates. This move will be sigh of relief for middle-class economy. Government official are also worried about fiscal deficit this year to increase with respect to GDP. Last year it was around 5.3% of the GDP while for first quarter this year it has reached 1.8%. Officials says last year 3G bid had reduced deficit to large extent which will be hurt this year while  they say Direct tax refund was the major cause of high deficit in first quarter. Talking about DLF which has seen erosion of 29% of its market cap since Jan, it is expected to erode more further. It has been charged penalty by CCI of Rs.630 crore while more complains have been lodged against the company which might lead to more penalties. All brokerage houses have downgraded DLF with tgt price of 177.On other side M&M is outperforming market and its rival on high rural sales and diversified product porfolio. They have major chunk of revenue from tractors and its expected that sales will rise due to good monsoon. There was a new development in bid for Afghan mines which stated that Indian consortium lead my SAIL has in total bid for 4 mines in afghan. If won this would be biggest bid won by indian company and it will lead to growth of steel industry. For foreign markets both US and Europe thursday is the deciding day. Obama is going to speak about future job plans which is a major concern while EU and ECB are going to announce measure to save them from crisis. So people be cautious on thursday. Just for gadget lovers, Research in Motion (RIM-Blackberry) has been facing tough competition from Anroid and Apple in North America making investor of company rethinking of their Stake. Technically speaking NIFTY has again closed at important level of 5126. RSI and MACD are showing short term rally. But watch for 5205/5210 level because it is major resistance.. Why?? Firstly, it is the 33.33% retrenchment from the low with respective to 2cd top 6178 on downward sloping resistance line..Secondly, Inverted head and shoulder is forming which has a neckline at 5209 with left shoulder at 4945. So guys trade accordingly. You may once book partial profit at 5209 on my NIFTY longs and buy again at lower levels or can re-buy after bull confirmation. 
NIFTY levels for 8th September:-
R-5153                  S-5111
R-5188                  S-5092
R-5209                  S-5064
R-5230                  S-5030

#87 Nifty Update

Child in an amusement park and Trader in stock market both have the same feeling!!! Have you experienced TORA-TORA ride in a park as a child??? Same feeling was with NIFTY traders today…Up-Deep down- Up- Down- zooooooooooming up!! NIFTY opened at 4993 then showed a deep fall at 4943 then we came to 5000 which trader thought was a resistance but again it bounced to 5072 after a small correction to 4970. NIFTY outperformed other asian markets and closed up at 5064 which was my mentioned resistance yesterday. IT sector was the most that bleed in last 2 session majorly due to downgrade of IT sector giants by Citi group and other rating houses. This is due to their major exposure to US and European countries which are facing recession at present. An interesting article in a leading magazine quotes CBO’s (Congressional Budget Office-a leading economic advisory committee USA) saying that if USA wanna lead its economic run at current GDP then it need to maintain ratio of 8.6% of Budget to GDP which comes out to spending cut of $15 trillion against what actually they have proposed at $2.4trillion. I think the Obama is in biggest trouble. This is was the highest budget deficit after the second world war. So you can imagine how trouble is US economy in?? But a common question arises that why asians are more affected??? There is a simple statistics that can answer that…US in total have $4.15 trillion currency treasuries of which more than 50% is held by asian countries with china leading (around $ 1.4 trillion). Therefore if Dollar tumble’s all asia will be affected. Now you would ask then why would whole world other than asian affected??…another statistics says that 66 countries other than Europe and Asia peg their currency against dollars or decide exchange rate on dollars. So now all eyes around the world is on one man and that is you MR.OBAMA.. Kindly save us!!! Increase your tax rates or decrease your spending. European Central Bank has also pleaded EU to meet soon and bailout greece otherwise inflation and lending rates will surge to uncontrollable level. One of the Interesting thing i read about Beijing was they have limited the numbers of new car registration per month..That should be even implemented in india to control pollution and traffic. Domestically PMI (Purchasing Manager Index) was out yesterday. It was at lowest level at 53.8 for august against 58.2 in July. This index suggest the orders of raw material by any firm (if i am wrong plz correct me). So this means manufacturing may further decline in coming months. In banking sector ICICI bank and HDFC has introduced “fixed rate” housing loans which means you can fix ur rate of interest for first few years and then floating rate will be applied.. I think this is a good move. On other hand Brokerage houses are looking to capture foreign brokerage as domestic margins are under pressure and volumes are declining . Stock specfic i would suggest to avoid BHEL in-spite of high order books they are coming with a FPO and it is expected to be below CMP so dont take any longs on thte stock. Technically speaking market took a strong support at 4945 which i mentioned yesterday and it has closed exactly at 5064 level which is strong resistance. Tomorrow early hours of trading will decide NIFTY’s move. But i m still bullish for short rally and still suggest you to buy with strict SL.
NIFTY levels for 7th September:-
R-5092                  S-5036
R-5112                  S-5017
R-5127                  S-4994
R-5188                  S-4956

#86 Nifty Update

NIFTY was an odd one out today but for 1st time on positive side. All the US and Europe market together with Asian Markets were in a sharp decline on weak job data in US on Friday making sentiments bearish but NIFTY just closed 22 points down to 5017. Today which had listing of Brooks lab which was trading 30% in opening hours but then we saw the stock at 25% in red making total movement of 60%. This makes us say that never trade on listing day. Reliance capital was booming on high expectation from its new venture with Nippon which is yet to finalize. This will boost Rel cap insurance market. On the other side Hero and Bajaj-auto were moving against the market index on the base of good 2 wheelers says figures last month and it is expected to be better this month on account of festival. One of the interesting data was sent by CMIE (Centre for Monitoring Indian Economy) that earlier they had forecasted 34.5% growth in profits of manufacturing sector in month of sept but now due to Petroleum products high cost they have revised it to decrease in profit rather rise by 5.7%. Now that will be making each investor shocked. But let’s wait and watch for the actual numbers next month. Taking about Air India which people say is digging loss for govt declared that for the first time ever since 2007 they made small cash profit on the route to US. One of the interesting figure was that in month of July Indian companies in total raised USD 3.67 Billion through FCCB and ECB with reliance being sole raise of USD 1.6Billion.. Now thats what we call emerging market. In-spite of such a global melt down people are investing in India which means they are bullish on Indian Companies on long run. Talking about NHAI, its a best example of slow mover. A plan was passed in 2002 to construct NS-EW corridor with a repeated deadlines of 2007,2009, 2010 but whats the progress?? Still they haven’t acquired 30% of land. How do you expect us to grow?? I think contracts should be given to private companies which will do work faster than them. US markets are closed today on account of Labor day so we might not see much movement tomorrow in opening hours. Europe are down by4% but it couldnt move our indian markets. Techincally speaking market is going to take strong support ay 4965,4942 and 4900 levels. RSI is yet on bullish side but we may see resistance at 5060 and 5127. Hope you all entered long on NIFTY near to 4965-4990 levels as i mentioned in last report. I still recommend buy NIFTY on Dips.
NIFTY levels for 6th September:-
R-5060                  S-4990
R-5096                  S-4965
R-5127                  S-4945
R-5180                  S-4882

#85 Nifty Update

Third consecutive win for the market!!!! NIFTY closed at 5040 plus 39 after open almost 100 points up in pre open session. Market was closed for last two days but 2 important figures were announced which were Auto Sales and Food Inflation. Food inflation came out to be in double digit at 10.08 vs 9.80% last week. While Sales figure were again a disappointment on YoY basis for Tata motors and Maruti but TVS saw a growth of 14%. Everon Education saw a 20% lower circuit on arrest of its MD. ONGC is likely to come with FPO this month. TATA motors is going to split its share from Rs.10 to rs.2 from 13th September so make a note of that. Have you heard about SMSgupshup?? It is one of the social networking sites by an Indian which is giving a tough competition to FB and LinkedIn. Its obviously different from other social networking but it has a great potential ahead. Another example in which a world leader was beaten by its competitor in no time is of FedEx and DHL. An interesting story says that Fed Ex took DHL in india very lightly and they lost the battle. DHL with Blue dart have around 400 branches over the country while FedEx has just around 150-200 branches. So that was a lesson learnt by FEDex.. Never under estimate small competitors. So is India. Hope we are not underestimated because we have the largest retail customer base. World markets had seen two days rally but again on weak economic date in US we may expect some pressure on Monday. What US need is some Job opportunities and people are expecting Obama to launch some boosting report for Jobs. Motorola is going to be acquired by Google for $12 billion which will make a stiff competition for companies such as Apple and Samsung. Technically speaking NIFTY is in bullish mood with RSI and Stochastic supporting them. We may expect some dip on Monday and I recommend to buy NIFTY on Dips.
NIFTY levels for 5th September:-
R-5060                  S-4965
R-5096                  S-4935
R-5127                  S-4882
R-5233                  S-4832