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!!