Weekly Outlook for Indian Stock Markets - 20th July to 24th July 2009

Friday's Review
Indian stock markets had a great run on Friday with benchmark indices going up by yet another 3-4%. Among the sectors, Bank Nifty was up by 4.5%. Leading the pack was ICICI Bank which has again roared back to 750 Rs levels. Overall, the entire week has been a memorable one for the markets as it covered up all the losses that it had made during the last week. Further upside from hereon would largely dependent upon monsoon and the global factors.

Apple and Yahoo are due to announce their results on Tuesday which would impact our markets on Wednesday. Crude Inventories data is also due on Wednesday. Crude has again picked up on Friday and trading at around 63 USD per barrel. In domestic markets, no major cap will be announcing their results on Monday / Tuesday, so no major cues other than monsoon.
FII View
FIIs on Friday were net buyers, albeit not the drivers of the rally. In the cash segment, FIIs were net buyers by around 150 crores. The buying, though a positive one, but not so great in the current rally. It seems valuations are the ones that stopping them to participate.

In the Index Futures segment, FIIs made net purchases of 700 crores, adding about 25000 new contracts. In the Index Options segment, FIIs were net sellers by about 330 crores, adding 30000 new contracts. The Open Interest for 4300 Put has increased the maximum by 45% on day-to-day basis. Similarly, the Open Interest for 4300 Call has decreased by 20%, primarily on account of profit-booking.

The above cues indicate range bound markets for the first few days of the markets. Traders can go short on Nifty around 4425 with stop-losses @ 4460 and target levels of 4350.

Stocks Ideas
Satyam Computers and Jp Hydro hit their target prices on Friday, giving gains of around 15% from recommendation levels. The current level do not justify the new recommendations, except for one which is given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Infosys Tech - Buy - 1825 - 1930 - 1770

Wishing you a great trading day ahead!!

Weekly Outlook on Indian Stock Markets - 29th June to 3rd July 2009

Last Week Highlights
The last week marked the expiry of June series. The June series was a lukewarm with indices remained range-bound and closing around May levels itself. During early June, indices once looked to break major psycological levels, but then later sucumbed to profit booking.

Now budget is just right at the corner, and markets are again gaining strength on hopes that new government would take positive measures towards reviving the growth. On Friday, we have seen strong buying by domestic and foreign institutions and this is likely to continue during the next week as well.

The sectors that really look promising is the Banking and Power. Banking stocks have been seeing good accumulation over the last few days, especially mid-sized PSUs like Andhra Bank, Central Bank, UCO Bank, etc. Similarly, Power stocks, except NTPC (as it is fighting legal battle with Reliance), are also seeing some good appreciation in last few days, including PTC, PFC, Power Grid and Reliance Power.

FII View
FII on Friday have been strong buyers in the derivatives segment. In the cash segment, Foreign Institutions purchased stocks worth 550 crores. Domestic Institutions, too, were net buyers by around 330 crores.

In the Index futures segment, FIIs were net buyers of about 1100 crores. Nifty and Bank Nifty have seen some long positions being created. In the Index Options segment, FIIs were again net buyers by 370 crores. Several out-of-money calls seen some good Open Interest build-up and premiums for those have also increased, indicating positive sentiments from the institutions.

In the stocks futures segment though, FIIs were net sellers by 285 crores. It might be done to hedge their index long positions.

The cues indicate further upside in the markets from the current levels, which can be considered as pre-budget rally. It is advised to the traders to keep booking profits at the higher levels and simultaneusly, buy out-of-money call options to hedge their positions on the long side. We might see profit booking coming in the markets after the budget.

Stock Views
On Friday, buy recommendations for Network18 and IVRCL Infra saw their target prices being hit. Those who have not booked profits in IVRCL can remain keep their positions open, by taking target price (364) as stop-loss. We expect this stock to remain bullish till budget.

Few new stock ideas for the week are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
M&M - Buy - 695 - 740 - 684
ABAN - Buy - 895 - 945 - 854
Moserbear - Buy - 93 - 102 - 86

Options Strategy
Buy Nifty 4200Put, 4700 Call and Sell two 3800Puts, 3600 Put - the combined strategy would give losses if Nifty remains range-bound between 4200 and 4600 levels. It will give unlimited profits, if Nifty goes above 4800. On the downside, it comes into losses, if Nifty goes below 3600.

The strategy can be viewed by clicking here...

Wishing you a great trading week ahead!!

Weekly Outlook for Indian Stock Markets - 15th - 19th June 2009

Past Week Summary
The past week has again been a good one for the stock markets with benchmark indices gaining for the 14th consecutive week. It has been a total turnaround for the equities worldwide and Indian markets have been an out performer.

Among the stocks, IT and Pharmaceuticals sectors have outperformed, while, Banking sector has been a laggard one for the indices. At the current levels, valuations have become a major concern for various companies and hence, we have been seeing selling supply coming in various stocks at the upper levels.

Outlook for next week
The next week can again be a range-bound for the Indian stock markets due to roll-overs. We might see some marginal build up on short side, in the anticipation on budget in July, though, the traders it should not be a major one, after seeing the fate of shorters post elections outcome.

The next week might see some rally or consolidation happening in less volatile stocks / defensive like NTPC, Cipla, Sun Pharma, and Power Grid. These stocks have not seen a meteoritic rise in the bull run and it might be their time now to show some upsurge. Also, these stocks look reasonable in terms of valuations than the other stocks.

FII View
FIIs View have been a positive one for last few months while Domestic Institutions have been booking profits at the current levels. On Friday as well, FIIs were net buyers of around 470 crores in the cash segment.

In the derivatives space, FIIs were net sellers of around 230 crores in the Index Futures segment, reducing their positions by around 1700 contracts. In the July futures, we have seen some Open Interest build-up, which indicates that roll-over has started happening in July futures contract.

In the Index Options, FIIs were net sellers of mere 9 crores, adding around 17000 new contracts. If we break this figure in terms of amount, there has been a decline of around 42 crores, which indicates some positions build-up happened in higher strike price options. (The value calculated for Option contracts is equal to strike price * Lot Size).

In the stock futures segment, Foreign Institutional Investors have been net buyers of 340 crores, reducing their positions by around 5600 contracts. This figure again indicates some short-covering / roll over happening in this segment.

The overall trend indicates volatile sessions for the markets in the days ahead. Bulls might attempt to break psychological levels of 16000 on Sensex and 5000 on Nifty, but it might not be an easy task to do after seeing a strong supply coming in the markets at higher levels.

Hence, traders are advised to go short on Nifty around 4660 levels with a stop-loss at 4750 and cover their position around 4475. Similarly, traders can go long on Nifty around 4475 with stop-loss at 4400 and target of around 4600.

Stocks Ideas
Stocks Ideas discussed in last few days have remained intact. Two new stock ideas that look interesting are as follows:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
GVKPIL - Buy - 40.15 - 44 - 36
HCC - Sell -108 - 96 - 115

Options Strategies
1) Buy IFCI 55 Call and Sell 2 IFCI 60 Calls - this strategy would give profit, if IFCI remains below 60. It is currently trading at 51 Rs. One may sell one 60 call immediately, if IFCI moves above 60 Rs. The maximum profit at Friday's closing price is around 90000 Rs. while maximum loss should not be more than 40000 Rs.

2) Buy Nifty 4700 Call and Sell 2 Nifty 4900 Calls and 2 Nifty 5000 Calls - this strategy will lead to maximum profit of around 10000 Rs according to Friday's closing prices. On the other side, it will start giving losses once Nifty crosses 5100 mark. One may move out of this strategy after booking losses, if Nifty crosses 5050 mark.

Wishing you a great week ahead!!

Weekly Outlook for Indian stock markets - 4th to 8th May 2009

April Highlights
The April series has been exceptionally well for the Indian stock markets. The benchmark indices - Nifty and Sensex have risen up by more than 10% each during last month. Another encouraging indicator for the markets have been continuous buying by FIIs since last month. They have now become "Net Buyers" for 2009, which should be bring positive sentiments into Indian equities as of now.

The last week has been a truncated one for the Indian stock markets. We remained closed on Thursday and Friday and hence, have missed the rally that other Asian markets went through on Thursday. This might help the Indian stock markets in better opening on Monday than its Asian peers.


The next week outlook
Despite some encouraging cues, there are few worrying signs as well. DLF results, announced on Friday, have come as a shocker with its net profit declining by 93% year-on-year basis. This migh put pressure on other real-estate stocks as well.

Another worrying factor was the exports-imports data released on Friday. The exports shrank by 33%, while imports fell down by 32%. Though both exports and imports fall is syncronized, but it indicates the slow down in global trade. This might put pressure on IT and other export-oriented stocks.

Technically speaking, we may see a range-bound market in the coming days. Markets are likely to open gap-up on Monday, but may face its first resistance at around 3580. The next resistance level comes moderate at 3615-3630. Nifty then, face strong resistance at 3670, which could act as a show-stopper.

On the support side, the first support level comes at around 3360-3380. If this level is breached, the next support level comes at 3280-3300 which could provide strong support to the falling bourses.


FII View
Foreign Institutional Investors (FII) are trading heavily in derivatives markets since last few days, but are hedging their poitions quite well. If they are buying in Index futures, they are hedging their positions by selling Calls or buying Puts (to cover for the downside).

Hence, my view is the range-bound market till outcome of elections. One can build long positions when Nifty comes down in 3300 range, with a stop-loss at around 3250. Similarly on the upside, one can build short-positions around 3570-3600 on Nifty, with a stop loss around 3670.


Stock Ideas
On friday, Renuka Sugars and Austral Coke have hit its stop-loss targets, while ABG Shipyard, Tata Elxsi and M&M hitting its target prices. Few more stock ideas are given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Dish TV - Buy - 32.5 - 35 - 29.65
Balaji Telefilms - Buy - 43.75 - 54 - 39.65
Adlabs Films - Sell - 225 - 212 - 238
Sterlite Industries - Buy - 415 - 450 - 375
Aban Offshore - Sell - 417 - 365 - 438
Allahabad Bank - Sell - 53 - 50.65 - 55.45
Aurobindo Pharma - Sell - 223 - 209 - 235
Ballarpur Industries - Sell - 16.2 - 15.25 - 16.75
Bank of India - Sell - 241 - 231 - 251

Wishing you a great trading week ahead!!

Weekly Outlook for Indian Stock Markets - 27th to 29th April 2009

Strong Last Week
The last week has been a decent one for Indian equity markets with benchmark indices went up by around 3%. Psycologically, the indices are able to break through the key resistance levels, which provide encouragement to the bulls for further upside.

The results announced during last week were not so encouraging. While Wipro had pretty good set of numbers, Reliance disappointed. ICICI Bank also came up with poor set of numbers on Saturday. It's net profit down by more than 35% during the year. NPAs have also increased to 2.09% from 1.49% last year. These negative factors may put pressure on the markets during next week.

Expiry and Results might bring volatility during next week
Traders are advised to remain cautious during the next week, as April series is going to expire as well. On the technical side, Nifty may again attempt to test 3500-3515 levels on Monday / Tuesday. If Nifty actually able to breach this level on closing basis for atleast two trading days, then we might see further upside to 3670-3700 levels. Hence, one is advised to speculate on the up side, only if this level is breached on Nifty.

On the downside, markets are expected to test 3380 levels. If this level is breached, then the next strong support level comes at 3300.

Scored 3 Sixes but lost 1 wicket
Out of the stocks discussed, Adlabs Films, Kingfisher Airlines and Binani Cements are able to hit their target prices, while, Century Textiles hit its stop-loss level. Few more stocks ideas are given below:

Scrip Name - Buy / Sell - Recommended Price - Target Price - Stop Loss Price
IDBI - Buy - 68 - 60.5 - 76
Century Textiles - Sell - 247 - 218 - 264
Zee Limited - Sell - 115 - 106 - 123
Austral - Sell - 303 - 280 - 325
Karnataka Bank - Buy - 87 - 95 - 81
Rama Newsprint - Buy - 17 - 20.3 - 14.65
Aditya Birla Nuvo (Long Term)- Buy - 570 - 745 - 425
Dishman Pharma - Buy - 107.5 - 215 - 84

On the Options side, one can take the following strategy for this month's expiry:

Sell Nifty 3200 Call and 3600 Put - this is a strategy in which we are selling deep in-the-money call and put options. This strategy will give maximum profit of 750 Rs per pair if Nifty expires in 3200-3615 range. This strategy will start giving losses, if it breaches this range on either side. Ths strategy is for those who are willing to take risks.

Wishing you a great trading week ahead!!

Weekly Outlook for Indian Stock Markets - 20th April to 24th April 2009

Last Week Roundup
The last week had been a pretty range-bound for the markets, with benchmark indices gaining just 1% each. The markets have been facing tough resistance around the current levels and hence, one needs to tread cautiously from now on. The traders need to follow strict target prices / stop-loss prices on the open positions.


Key events for next week
There would be flurry of results that are expected to be announced during next week. TCS and Axis Bank will be announcing their annual results on Monday. Tuesday will see HCL Tech, Hero Honda, Rolta and Ultratech coming up with their annual results. These results could bring about the next trigger for the stock markets, either on the upside or on the downside.

Globally, the next week will bring some key events from US. On 22^nd April, we will see Crude Inventories data coming from US. On 23^rd, we will see release of initial claims data and home sales data from US government.


Battle of Bs’ – Bulls and Bears
The next week could see a break-out, either on the upside or the downside. The momentum that markets had built over last few weeks is finally losing its steam. It can be seen from the trading behavior on Thursday and Friday when markets have seen some serious profit booking coming at higher levels. Also, elections are just around the corner and everyone might like to sit on some cash before the elections outcome, which means we may see the up-side remaining cap at around the current levels.

Though, the encouraging factor remains the strong institutional buying coming from foreign players, which indicates that they are hopeful about a possible turnaround in the Indian economy in next 6-12 months. Most of this buying is coming from Asia specific hedge funds, which pulled out the cash from the emerging economies, in the aftermath of Lehman collapse. These funds are now using the huge cash surplus to invest in the Asian economies and broken-down stocks and hence, chances do exist that these funds may actually able to bring about next wave of buying coming into the Indian stocks.


Stock Views
The banking sector has seen some good buying coming throughout the last week. The Bank Nifty index has given the returns of more than 5% during the last week, while the benchmark Nifty index has given the returns of mere 1%. This trend is likely to continue during the next week as well.

Some stocks from mid-cap IT space have also seen some good open-interest build-up, especially in HCL Infosys that has seen the rise in Open Interest of more than 450%. One can buy some mid-cap IT stocks with a trading perspective.

On the other side, we might see some profit booking coming in those stocks that have risen tremendously in last few weeks and hence, advise to stay out of such stocks for a while.

Some stock views that I would like to share are given below:

Scrip Name – Buy / Sell – Recommended Price – Target Price – Stop Loss Price
Core Projects – Sell – 101 – 90.5 – 108.65
Skumarsynf – Sell – 29.15 – 26.5 – 30.5
Patni – Buy – 163 – 175 – 152
Nav Bharat Ventures- Sell – 187 – 173 – 197.65
ABG Shipyard – Buy – 116.5 – 125 – 107.75
BEML – Sell – 480 – 455 – 506
Cummins India – Sell – 212 – 195 – 222
Dish TV – Buy – 29 – 31- 27
Federal Bank – Buy – 173 – 182 – 166
GDL – Buy – 73.5 – 79 – 68
HCL Infosys – Buy – 85 – 97 – 78.35
Hindustan Zinc – Sell – 505 – 477 – 527
Indian Bank – Buy – 115 – 123 – 106
SREINTFIN – Buy – 38.05 – 42 – 34

Wishing you a great week ahead!!

Weekly Outlook for Indian Stock Markets - 13th April to 17th April 2009

Just few encouraging statements from US financial space and stock markets rallied as if nothing happened... The global markets, including Dalal Street have rallied almost 30% in last two months.

But the real test is just about to begin when the renewed optimism will be tested against the actual financial results due to be announced this month. US companies will see their first quarter results of this financial year, whilst, Indian companies will announce their annual results for 2007-08. These results will determine the financial health of the companies.

The changes in accounting standards in USA might also help companies in displaying healthier balance sheet than what it is actually at the moment. It is widely speculated that comanies may be allowed to defer the notional losses on the open liabilities / assets that they are carrying on the balance sheet for next few months.

Hence, on the backdrop of these events, we might see increase in volatility in the global week in the coming week(s). The coming week will see 1st quarter results announcements by GE (17th), Citi Group (17th), Intel (14th), Johnson and Johnson (14th) in US. The good and bad of these results will have an impact on the markets.

Similarly, in India, Infosys is due to announce the results on Wednesday (15th). The results will give an indication on how badly IT sector has been hit by the problems in US. Also, its guidance for the coming quarter / year will determine the prospects of IT sector in the coming quarters.

Hero Honda will announce its annual result on Friday and it is expected to announce the healthy results for this year. This company has been exception in Auto sector, due to its presence in robust rural sector.

The just concluded week has been a good one for us as well. Most of our stocks views have gone well. On Friday, SCI, Dish TV, have hit their target levels. The long term target for Jain Irrigation System has also hit its target price. Few new stock views are given below:

Scrip Name - Buy / Sell - Recommended Price - Target Price - Stop Loss Price
JP Hydro - Sell - 41.45 - 37 - 44.65
Yes Bank - Buy - 62 - 71 - 53
Meghmani Organics - Buy - 8.75 - 9.85 - 7.6
Jet Airways - Sell - 224 - 203 - 241.5
ABB - Sell - 463 - 438 - 480
Amtek Auto - Buy - 93 - 103 - 83
CESC - Buy - 248 - 264 - 229
GTL Infra - Sell - 31.3 - 29.55 - 32.55
IRB - Buy - 103.5 - 113.5 - 97

Few Options strategies for the coming week are as follows:
1. Sell Ashok Leyland 20 Call and Buy 22.5 Call - this is a bear spread strategy which is taken with a view that Ashok Leyland may trip on profit-booking this week.

2. Sell GVKPIL 27.5 Call and Buy 30 Call - this is again a bear spread strategy which is taken with a view that this stock may come down on account of profit booking.

3. Sell ICICI Bank 380 Put and 430 Call - this strategy is taken with a view that stock may move within a range in the coming days. This will be short term strategy in which one can move out, once you get 4-5 Rs. per pair. One can move out with loss if scrip able to cross 450 mark on downside / 350 Rs. on downside.

Wishing you a great trading week ahead!!!

Weekly Outlook for Indian Stock Markets - 06th April to 10th April, 2009

The Indian Stock Markets along with global markets have performed reasonably well over the last few days. And if recent events to go by, the "feel-good" factor is expected to continue.

G-20 meeting held last week was a positive one. The countries have pledged $1 trillion into the global financial system which has further assayued the fear of global recession. Also, most of the pain is now out in the street, including possible GM bankruptcy. Hence, the downside in the market looks limited.

But what about the upside? Will we see Dow able to conquer the 10,000 feet again or would we see Nifty pulling back to 4000 levels in the coming weeks? The answer is "doubtful". The journey ahead should not be easy. The way markets have discounted the bad news, it has also digested the good news coming in last few days. The markets will now require continuous flow of better economic data and some positive steps taken by the governments and central banks worldwide.

In India, the coming week is also a truncated one with exchanged closed on Tuesday and Friday. Hence, we are left with only three working days this week. We may see markets correcting a bit this week. It has almost been a up-side journey since last few weeks and hence, institutions may take some time to book profits during the coming week, especially before the scheduled general elections.

On the technical front, we may see Nifty facing stiff resistance at 3250-3275 on the upside. If Nifty manages to breach this level on closing basis, then next resistance comes at 3340-3350 levels. On the downside, we may see Nifty finding support at 3115-3125. The next support level would be in the range of 3060-3080.

The last day of previous week was full of triggers. Bajaj-Auto, Bank of India, Axis Bank, Aptech, Amtek Auto, Jain Irrigations Systems, ABG Shipyard have hit their target levels, while Bajaj Hindustan, Ashok Leyland, Alok Textiles and Balaji Telefilms have hit their stop losses.Two new stock views that I would like to share are:

Scrip Name - Buy / Sell - Recommended Rate - Target Price - Stop Loss Price
ABB - Sell - 452 - 415 - 467
Aditya Birla Nuvo - Sell - 470 - 440 - 481.

On the options side, one can take a collar strategy in Nifty. The strategy is as follows:

1. Buy Nifty 3100 Call and 3200 Put. Sell 3300 Call and 3000 Put - this strategy should be taken in such manner that Buy Premium should be greater than Sell Premium by 170 points. This strategy gives you a loss of Rs. 3750 if Nifty ends up between 3050-3250. Anything above 3250 or below 3050 would yield you profit of Rs. 1250. Here, the risk is greater than reward but the range of risk is only 200 points which should not be much seeing the volatility in the markets for last few days.

2. Sell Nifty 3100 Call and Buy Nifty 3200 Put - this strategy would give you a maximum profit of Rs. 5700 Rs. if Nifty ends up below 3100 on expiry. On the reverse side, it will give you maximum loss of Rs. 4200 if Nifty manages to close above 3300.

Wishing you a great trading week ahead!!

Weekly Outlook for Indian Stock Markets - 30th March to 3rd April 2009

The Indian stock markets have shown tremendous surge during the last week. The benchmark indices have gained by more than 10%, taking cues from the global markets. Economic indicators, too played a crucial part. Inflation has come down to almost 0%. IIP data for the month of February is also encouraging which may boost the equity markets in the coming week.

Another positive indicator is FII data. FIIs have been net buyers throughout the last week, which indicates the increase in risk appetite among the FII fraternity. The next week could be range-bound with markets trying to consolidate during the current levels. Nifty may oscillate between 3000-3150 levels. Nifty has strong support at 2960 levels, which if breached, could take it down to 2850. On the upper side, Nifty may attempt to touch 3200 levels, but may find strong resistance at 3170.

Few stock views for next week is as follows:

Scrip Name - Buy / Sell - Recommendation Price - Target Price - Stop Loss Price
3iInfotech - Buy - 32 - 34 - 30.5
ABB - Sell - 420 - 390 - 437
ABG Shipyard - Buy - 80 - 86 - 77
Aptech - Buy - 82 - 87 - 77
Bajaj Hind - Sell - 48 - 43 - 50.25
Bata India - Sell - 103.5 - 95 - 108
Canara Bank - Sell - 168 - 161 - 172
Crompton Greaves - Sell - 118 - 111 -121
Escorts - Sell - 38 - 35 - 40
Indus Ind Bank - Sell - 34.5 - 32.5 - 35.5

Few Options trading strategies are given below:

1. Sell Bank Nifty for 4500 Call and 4000 Put for total premium at 11250 Rs. Maximum Profit of Rs. 11250 and maximum Loss will be unlimited. Both are out of the money options and ideal for those who expect markets to remain range-bound between 3800 to 4700 (Curr Value- 4406). The idea is to earn the time value of the contracts which will decrease in the coming days.

2. Sell Bharti Airtel 660 Call for premium of Rs. 7750. Maximum Profit of Rs. 7750 and maximum loss will be unlimited. It is an out-of-money call option, expecting Bharti to fall in the coming days. Stop Loss can be taken at 25 Rs. per lot, which could lead to maximum loss of s. 4500.

3. Buy Cairns India 180 Put for premium of Rs. 11250. Maximum Profit unlimited while maximum loss will be Rs. 11250. It is an out-of-money Put option, anticipating Cairns India to fall down in the coming week.

4. Buy ICICI Bank 380 Put and Sell 360 Put for total premium of Rs. 5600. Maximum profit will be Rs. 8560 while maximum loss will be Rs. 5500. It is a Bear Spread strategy by trading in both are out-of-money Put options, anticipating ICICI bank to come down in the coming week.

5. Buy IFCI 17.5 Put and 25 Call for total premium of Rs. 19700. Maximum Profit will be unlimited and maximum loss will be Rs. 19700. Both are deep out-of-money options, anticipating the stock to remain volatile in the coming days.

6. Sell Nifty 3400 Call and Buy Nifty 3500 Call - Maximum Profit will be Rs. 800 and maximum loss will be Rs. 5800. Again a bear spread by trading in both out-of-money call options. Doesn't expect Nifty to cross beyond 3400 levels in this expiry.

Wishing you a great week ahead!!

Weekly Outlook for Indian Equity markets - 23rd to 27th March 2009

General Elections hold the key
The last week has been a good one for Indian equity markets. The benchmark indices have gained by more than 3% each, led primarily by Banking and Auto space. Mid-cap index too showed great deal of activity with many stocks gained by more than 50% within this week.

But the given rally is not due to any fundamental shift in the economy. It is primarily due to positive global cues in last fortnight and short-covering seen in the markets after re-testing the October lows.

The next fortnight could be critical for the equities worldwide. Whether the current rally consolidates around the current levels and then moves forward or it again fizzles out like what happen in the typical bear market, is to be seen.

Fundamentally, Indian stock markets are in disarray. General Elections are due in April and May, which might keep the markets within a range, even if global markets show some strength. On the contrary though, weakness in the global markets may actually accentuate the pain in the stock markets. Hence, investors may remain in sidelines till the time elections get over. The clean majority for either Congress or BJP would give strength to the markets, whilst third-front majority could be a troubling sign for the markets.

The coming week could be range-bound
The coming week may see Indian equity markets consolidating around the current levels. For Nifty, support again lies at 2680-2700, whilst it may show very strong resistance at 2950-3000 levels. Typically for Sensex, the support lies at 8500 levels whilst it may show resistance around 10000 levels. Also the expiry is due this week, which may further put markets under pressure.

Sector-wise, Finance and auto sectors may see some profit-booking coming during the week. One can pick some quality stocks in this space at lower-levels. HDFC Bank is always a pick at Rs. 800 levels. Maruti is also a good stock to buy around Rs. 680 with a long-term perspective.

Stocks Pick
Last week, Mcleod Russell, Akruti and Aptech Technologies have given us the maximum profit, whilst Aditya Birla Nuvo and PFC have given us the maximum loss.

Let’s look at some picks for the current week:

Scrip Name – Buy / Sell – Recommended Price – Target Price – Stop Loss Price
Canara Bank – Buy – 146 – 153 – 141
SREI Infrastructure Finance – Buy – 32 – 41 – 27
Jet Airways – Sell – 161 – 140 – 168

The coming week marks the expiry for the current month. Hence, it would be better to wait till Wednesday before discussing the Options segment.

Wishing you a great week ahead!!

Weekly Outlook for Indian Stock Markets - 16th to 20th March 2009

The power of the powerful can be judged from one of the events occured last week. Just one statement by Citibank CEO Vikram Pandit stating that Citibank is profitable for last two months brought a rally in the stock markets worldwide.

Does it indicate the end of the problem that US or the entire world is facing? No, it only indicates that future might not be as bad as the present. The main culprit behind the current situation are the financial institutions based in USA. When one of these institutions have shown profits, it brings along the hope in the world fraternity that things may be coming into normal. But we must not forget that these are only hopes. Whether these contain some substance is yet to be seen.

Skeptical experts still see pain in the economy. The optimism in the economy is at all-time low throughout the world. The jobs have been lost, companies have been reeling under the pressure of over-leverage, consumers in any part of the world have been cutting their spendings and concentrating more on savings which has further stranded the global trade and hence health of the economies.

Another cause of concern is the worsening situation in Eastern Europe countries. Recent IMF report suggested that these countries are facing serious debt and have asked for immediate help from International Monetary Fund (IMF).

Anyways, lets come back to the coming week. The coming week may carry the momentum in the first part of the week, which can push the Indian bourses to previous support levels. Nifty may again attempt to breach 2800 which can provide tough resistance. This level would indicate whether the given rally has some substance or not.

One can buy 2700 Nifty Put along with 2750 Nifty Call. This would cost the premium of 95 Rs, which could be maximum loss of around 5000 Rs per pair. If Nifty actually breaches 2800 levels, then it would go up to 2900 and this would bring the profits of atleast 5000 Rs. On the contrary, if Nifty fails to cross 2800, then we may see Nifty again attempt to go below 2600 and it may bring the profit of around 4000 Rs.

Few stock specific strategies for the coming week are given below:

Scrip - Buy / Sell - Target Price - Stop Loss Price
Indotech Transformers - Buy - 310 - 279
Kalindee Rail Nirmaan - Buy - 100 - 80
South Indian Bank - Buy - 50 - 42
Cummins India - Buy - 165 - 146
Hind Dorr Oliver - Buy - 38 - 31
Akruti City - Sell - 1025 - 1255 (One can also attempt to buy Akruti Options Put for 1100 for Rs. 10.)
LITL - Sell - 125 - 115
Jindal Irrigation Systems - Buy - 375 - 330

Wishing you a great week ahead!!!

Weekly Outlook for Indian Stock Markets - 24th Feb to 27th Feb, 2009

Introspection
The past week has not been good for the Indian equity markets. First, the lukewarm interim budget and then the renewed concerns of recession in US pulled down the Indian bourses. Both Nifty and Sensex ended the week, down approximately 7%.

Now, how's the road ahead looking like… With elections coming by, the government may not take any major policy decisions, and hence we might not see any support coming from the diplomatic front. There are certain reports in the media regarding yet another fuel price cut, but it might not help the companies much as the prices have already reduced substantially from higher levels.

At the financial front, Reserve Bank of India (RBI) is expected to cut the benchmark rates by another 50 bps to 100 bps, as inflation is already down to less than 4%. RBI may also force the banks to reduce the lending rates which will further ease the pressure from the companies and may stimulate the consumption cycle.

Globally, things are bad, which we all have understood and know by now. It took us more than an year to accept this fact. Now, further negative news may only trigger immediate downside, but it seems limited now. Dow is already sitting at six year low. It may go another 500 points, but fear of further downside is a more of a pessimistic view.

The ailing financial institutions have already go bankrupt and the government in US will not allow further destruction at the economic front. It is now actively putting in the money in the companies, buying stakes in troubled companies and ensuring that conditions do not deteriorate much.

Hence, this is my personal view that we are now in second phase of bear market where we may see "consolidation" happening for sometime. After about 13 months of destruction, we may see another 6 months of consolidation where we may see some negative news flowing in form of recession / bankruptcies or some positive announcements coming from the governments and central banks to stimulate the economy. The stock markets too may follow these events and can remain range-bound.

Amidst such scenario, an investor must learn to be patient and remain invested for at least one year. The traders should trade with strict stop-losses and must book profits at regular intervals.

Sectors to look out for in long term…
In this year of stimulation, the focus will be on Infrastructure and related sectors. The government would be spending money to prop up the infrastructure and invite the global players to invest in Indian economy. In the just concluded Bull cycle, the foreign players often complained of poor infrastructure in the country. The government will surely have a look at this weakness and improve the same as well. Hence, one may see some buying coming in Infrastructure stocks like GMR Infra, Reliance Infrastructure, JP Associates, etc.

Also the related sectors like Infrastructure Finance, Cement, Steel, etc may also benefit from the same. Hence, one can also invest in stocks like IDFC, IFCI, Ambuja Cements, ACC, Tata Steel, etc.

Another sector which is to look out for is Energy and Power sectors, which has now become a priority for every government. Stocks like NTPC, Power Grid, and Reliance Power can also be bought with long term perspective.

The week ahead…
The coming week could again be a white-wash for the Indian stock markets, if provisional data is to go by. Derivative figures on Friday indicate a huge build up on sell-side by FIIs. There have been increase of Open Positions of more than 80000 in Index Futures side and net sell of more than 900 crores, which indicate that FIIs are anticipating further downside in the Indian stock markets.

The level of 2700 is crucial for Nifty. If Nifty closes below this level and remain there for 2-3 days, then we may see bear cycle coming in Indian markets with maximum upside of 2800 and downside of at least October lows of 2300. The chances of market bouncing back from these levels are also high.

Hence, one can safely adopt a strategy for buying 2600 Put and 2800 Call for March. The maximum risk according to Friday's closing will be around 8000 Rs. per lot-pair, whilst maximum gains are unlimited.

On the stocks side, stocks from Infra, Pharmaceuticals, and Cement looks strong. One can buy these sectors in the coming week.

Wishing you a great week ahead!!!!

Weekly Outlook for Indian stock Markets - 16th to 20th Feb, 2009

Union Budget holds the key for next three months

After weeks of anticipation and speculation, the B-day has come. With elections coming by and economy facing global head winds, this budget holds the key. Almost every sector wants some favor from the government to help itself sustain in the current turbulent conditions, especially the real estate & infrastructure and export-oriented sectors. Another crucial aspect is that this will be the last chance for the government to encourage the economy. Once elections are announced in a weeks’ time, then the government might not be able to take any major policy decision / provide a stimulus package. All the other measures will be through RBI only till elections get over.

Amidst such scenario, this year’s Union Budget holds significance and may decide the movement of the markets for next 3-4 months. Hence, investors should attempt to resist the temptation that may come in near future and it is prudent to wait till the outcome of elections to invest. Traders should move with strict stop-losses and target prices to ensure they are able to book profits / losses at regular intervals.

Promising sectors for future
Some of the sectors that look promising are the infrastructure, cement, engineering and IT sector. These sectors have seen the worst and now available at attractive valuations. Also, these sectors could be the pillar of Indian economy on its revival course. Also, the successive governments will be emphasizing on spending the revenues in improving the Infrastructure, which would help Infrastructure, Engineering and Cement sector. Information Technology has been the sunshine sector of the Indian economy and expected to receive government’s continuous support. Hence, few stocks that can be picked from long term perspective are IDFC, Aditya Birla Nuvo, BHEL, Punj Lloyd, Infosys, Mphasis.


Short-term Views
Out of last few recommendations, Gujarat NRE Coke has hits its Stop Loss, whilst, Amtek Auto and Welspun Industries have hit their target levels. Few stock specific recommendations for the coming week is as follows.

Scrip Name – Buy / Sell – Target Price / Stop Loss
Kamat Hotel – Sell – 30 / 37
Hotel Leela – Buy – 23 / 17.5
Reliance Capital – Sell – 410/468
Sintex – Buy – 125 / 108
Sterlite – Buy – 205 / 265
Radico Khaitan – Buy – 74 / 68
Akruti – Sell – 1010 / 1085

Some Option based strategies are as follows. All are Buy specific strategies:

Sterlite 280 Call with Bharti Airtel 620 Put Or,
ICICI Bank 460 Call with Bharti Airtel 620 Put
Unitech 32.5 Call with Unitech 30 Put

Wishing you a great week ahead!

Weekly Outlook for Indian Stock Markets - 9th Feb to 13th Feb 2009

Learning from the past
Let’s dwell the past see what happened in last one year… Since January 2008, the stock markets have seen one of its worst phases. Every month, we went down by few percentage points and finally October seen the worst when stock markets fell down by almost 50% in one month.

Since then, we have seen some kind of support levels coming in the markets worldwide. For instance, we have seen strong support levels between 7500-7800. We have seen Dow Jones rebounding from these levels at least 4 times since November. Similarly, we have seen strong institutional support coming in Sensex in 8000-9000 range. Even the worst quarterly results and Satyam fiasco failed to break these support levels.

Another trend that we have seen in Indian stock markets is the formation of upper support levels creating after every correction. During the first fall in October, we saw strong support coming in 2300 levels in Nifty and 7800 in Sensex. The next test came in November when markets after coming down to 2550, rebounded again to 2800. The next fall in December took markets down to 2650 and from those levels rebounded to 3100. In January when Satyam episode rocked the markets, markets went down to 2700 and from thereon, we again saw markets rebounded back.

This formation of upper levels at 2300 à 2550 à 2650 à 2700 are good indications for the markets… But these are only indications!!! As an investor / trader, we must watch these levels closely and one can safely go long till the time these indicators go false.

The purpose behind this discussion is to observe the institutional response in each correction and formulating a strategy. The above discussion indicates that we can go long as far as this trend remains true.

Last week indicators
The fag end of last week had seen markets again finding good support at around 2750-2800 Nifty levels. The hopes of Stimulus package in USA and possible RBI cuts have again given strength to the markets. This trend may continue during the next week and we may see Nifty again attempting to breach 3000 mark. Amidst such scenario, one can go long safely on Nifty with a Stop Loss of 2750. Option traders can buy 2800 Call and Sell 3000 Call with maximum profit of Rs. 8000 on each lot-pair and maximum loss of Rs. 4300.

Few Trading Strategies
Scrip – Buy / Sell –Target Price / Stop Loss
Syndicate Bank – Buy –70 / 56
Noida Toll – Buy – 26 / 22
GTL – Buy – 235 / 208
Indotech Transformers – Buy – 315 / 280
Mcleod Russell – Buy – 55 / 45
Ruchi Soya – Sell – 19.5 / 24.5
Finolex Cables – Sell – 18 / 22
KS Oils – Sell – 38 / 45
United Phosphorus – Buy – 105 / 89
GVK PIL – Buy – 21 / 17
Vijaya Bank – Buy – 31 / 27
Ashapur Minerals – Buy – 21.4 / 18.5
Dr Reddy – Buy – 469 / 427
Gujarat NRE Coke – Sell – 21.5 / 24

Wishing you a great week ahead!!!

Weekly Oulook for Indian Stock Markets - 2nd Feb to 6th Feb 2009

The last week had seen January expiry, which ended rather smoothly. It was widely speculated that the month of January may see re-touching new lows, since the Q3 results were expected to come as worse for the companies.

Fundamentally though, the results announced by the companies were not bad. The companies are still reporting profits, though, not as good as the last quarter or year. The only real areas of concerns are those companies which have taken leverage on their balance sheet, for instance, Unitech and Tata Motors. Both the companies are facing serious credit crunch at the moment. Tata Motors has the strong backing of Tata group of companies but Unitech only hope of survival is the funding from PE firms which may help the company from the immediate cash crunch. But long-term scope of the company remains weak.

The February series is expected to do well. Though I may sound optimistic, but my view suggest that markets may touch new highs for last three months i.e. Nifty around 3250-3300. Similarly, for the Sensex, we may see the range of 10500-11000.

If we look at some of the previous data, strong delivery based buying is seen in Banking stocks, especially in PSU banks. The recent cut announced by SBI will trigger a fresh war in the banking sector. This will surely prop up the markets when they open on Monday. At this juncture, one can buy mid-sized PSU banks like Bank of India, Dena Bank, Allahabad Bank. The traders can hedge their positions by selling the Bankex or Bank Nifty future or buying their Puts of Strike Prices of around 10% lower than the spot price.

Another sector that looks interesting is the Information Technology space. HCL technologies has bounced back from 100-105 Rs twice. We may see an upside in this stock till around 130. One can put a stop-loss of around 105 Rs. One can also buy Infosys Technologies and TCS at the current levels.

The long-term investors with a horizon of around 1-2 years can buy frontline IT and Bank stocks. But they should not invest more than 30% of their intended portfolio. In IT sector, Infosys and TCS remain a good bet for long term. Whilst in the banking sector, SBI and HDFC Bank could be a better choice.

Among the last week recommendations, Era Infrastructure, MIC and State Bank have touched their targets. The other recommendations remain intact. Few recommendations for the coming week are mentioned below:

Scrip Name – Buy / Sell - Target price / Stop Loss
Ruchi Soya – Sell – 19.5/24.35
Axis Bank – Buy – 446/413
Finolex Cables – Sell – 18/22
KS Oils – Sell – 38/45
Rolta – Sell – 81/102
Nifty – Buy – 3110/2700
Nifty CA 3100 – Buy – 30 / No stop loss

Wishing you a great week ahead!!!

Weekly Outlook for Indian Stock Markets - 26th Jan to 30th Jan 2009

The first month of the year 2009 is coming to an end. Technically though, the month looked set to close in a range bound territory, but fundamentally things have changed on ground, after Ramalinga Raju confessions about Satyam.

Stock markets, which were attempting to form a base, got the unexpected jolt and made the investors wary again. The situation is so grim that any investor doesn’t know whether the company where is putting his money is actually worth the same or not. Whether the results they have shown are authentic or not? Whether the auditors who stamped the balance sheets are paid beneath the table or not? Fundamentally, investors’ faith has been shaken pretty badly.

Some positive aspects of this problem are the steps taken by the SEBI. For instance, SEBI is now planning to put an independent auditor to verify the financial statements of any company listed on the bourses. Also, the regulator has made mandatory for the companies to disclose the promoters’ shares which are pledged with any financial institution. The shares of all such companies will surely be hammered by the investors. We have already seen one victim in the form of United Spirits.

Amidst such scenario, it is advised to remain prudent and stay away from the markets. The traders should strictly follow the “Stop-Loss and Target” method. The Long Term investors will now need to add another filter in their strategy called “Strong Corporate Governance’. For instance, companies like Infosys now emerge as the safer bet due to its strong operating margins and transparent way of working. It strengthens the faith of institutional and retail investors who think Information Technology (IT) is the sector to look out for in the future.

About the stocks that can be picked for trading purpose are from Infrastructure pack. These stocks are fundamentally better than real-estate stocks and look close to an intermediate bottom, especially in Mid cap space. One can pick “Era Infrastructure”, “GTL Infrastructure” “IRB Infrastructure”. Few other stocks that look strong are MIC, State Bank of India, Sterling Biotech, Mcleod Russell.

Given below are some trading strategies with their target price and stop loss:

Scrip Name – Buy / Sell - Target price / Stop Loss
Era Infra – Buy – 72/67
GTL – Buy – 235/208
IRB – Buy – 125/100
MIC – Buy – 25/19
Sterling Biotech – Buy - 167/152
Mcleod Russell – Buy – 55/45
State Bank – Buy-1100/1020
Indotech Transformers – Buy – 310/284

Long term investors can buy IRB, GTL, Indotech Transformers, out of the above lot.

Wishing you a great week ahead.

Weekly Outlook for Indian Stock Markets - 19th Jan to 23rd Jan 2009

The last week has once again concluded un-conclusive. The markets were clearly lacking direction and slowly platform is getting set for another fierce battle between the bulls and the bears.

The quarterly results are so far good. The strong numbers posted by HDFC Bank and Infosys have re-ignited the faith among the bulls that things are not so bad at the fundamental level. Similarly, bears are closely watching the events occurring in fragile global economy. Filing of bankruptcy by Nortel Networks, splitting of Citi group were the major blows for the bulls in last one week. It is also widely speculated that once dust around Obama regime settle down, bears may again attempt to gain hold over the markets. Amidst such scenario, volatility is likely to increase in the coming days. Hence, traders must keep strict stop-losses to prevent sharp losses in their portfolio.

Long-term investors must keep a hold the temptation for a while. Obama hopes are yet to turn into a major action. He is having loads of problems in its kitty and how he deals with it, will decide the final outcome of the markets. Also, elections in India are round the corner as well, As of now, neither of the two parties hold the clear chance of attaining majority. The mixed government could further strain our growth. Hence, long term investors can wait for a while or invest partially. It is better to keep the cash for further downside, if problem in USA or India escalates.

Let’s look at some of the trading opportunities below:

Scrip – Buy/Sell – Recommended Price – Target / Stop Loss

WIPRO – Sell – 245 – 215/255
UNIPHOS - Buy – 107 -120/98
RECLTD – Buy – 77 – 83/73
STER – Buy – 261 – 295/245
SESAGOA – Buy – 73 – 83/68
INDIACEM – Buy – 105-115/97
RENUKA – Buy – 65 – 73/61
GTLINFRA – Buy – 29 – 32/28
ERAINFRA – Buy – 69 – 72/67
RADICO – Buy – 69 – 74/65
ASHOKLEY – Buy – 14.5 – 16/13.5
GAMMONIND – Buy – 77 – 83/74
BALRAMCHIN – Sell – 55 – 47/59
AMBUJACEM – Buy – 71 – 78/67

Wishing you a great week ahead!!

The last week has once again concluded un-conclusive. The markets were clearly lacking direction and slowly platform is getting set for another fierce battle between the bulls and the bears.

The quarterly results are so far good. The strong numbers posted by HDFC Bank and Infosys have re-ignited the faith among the bulls that things are not so bad at the fundamental level. Similarly, bears are closely watching the events occurring in fragile global economy. Filing of bankruptcy by Nortel Networks, splitting of Citi group were the major blows for the bulls in last one week. It is also widely speculated that once dust around Obama regime settle down, bears may again attempt to gain hold over the markets. Amidst such scenario, volatility is likely to increase in the coming days. Hence, traders must keep strict stop-losses to prevent sharp losses in their portfolio.

Long-term investors must keep a hold the temptation for a while. Obama hopes are yet to turn into a major action. He is having loads of problems in its kitty and how he deals with it, will decide the final outcome of the markets. Also, elections in India are round the corner as well, As of now, neither of the two parties hold the clear chance of attaining majority. The mixed government could further strain our growth. Hence, long term investors can wait for a while or invest partially. It is better to keep the cash for further downside, if problem in USA or India escalates.

Let’s look at some of the trading opportunities below:

Scrip – Buy/Sell – Recommended Price – Target / Stop Loss
WIPRO – Sell – 245 – 215/255
UNIPHOS - Buy – 107 -120/98
RECLTD – Buy – 77 – 83/73
STER – Buy – 261 – 295/245
SESAGOA – Buy – 73 – 83/68
INDIACEM – Buy – 105-115/97
RENUKA – Buy – 65 – 73/61
GTLINFRA – Buy – 29 – 32/28
ERAINFRA – Buy – 69 – 72/67
RADICO – Buy – 69 – 74/65
ASHOKLEY – Buy – 14.5 – 16/13.5
GAMMONIND – Buy – 77 – 83/74
BALRAMCHIN – Sell – 55 – 47/59
AMBUJACEM – Buy – 71 – 78/67

Wishing you a great week ahead!!