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!!