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!!