Sell Bharti-Airtel on Rise - 20th Feb 2013

Sell Bharti-Airtel on Rise

1) Bharti Airtel has seen massive correction from 370 Rs levels to 308 in the last one month. Today, as well we have seen the stock under pressure, despite markets rebounding in the last one hour.

2) Open Interest for the stock has increased by 9% on Day to Day basis. Around 14 Lacs shares have been added.

3) 4.6 Lacs shares have been added in 320 Feb Call and Premium too down from 5.05 Rs to 3.45 Rs. It indicates strong resistance around this level.

4) On the technical charts, one may see some support at 297 Rs.

5) RSI too looked a bit oversold and hence, we may see some short covering coming in the stock in the next 2-3 days.

6) Thus, advice is to sell Bharti Airtel on rise around 311-312. One may put Stop-loss at 323 as 320 seems good resistance to overcome.

Happy Trading :)

Straddle Strategy in Reliance Industries

Reliance Industries on Friday signaled out strategies which may result in more volatility for the stock. Here are these:

1) Open Interest is up 12% (around 20 Lac New shares).

a) In Feb Futures, Open Interest added by 6% (5.7 Lacs new shares).

b) In Feb 540 Call, 560 Call and 580 Call, Open Interest of around 8 Lac shares have been added.

These are negative signals for the stock as it indicates call writing.

2) But on the technical charts, a long term support is seen at around 820-840 Rs levels, which is a bullish signal (See Below)

3) RSI is close to 30 now. At 20, it indicates oversold.

So, traders can go for Straddle strategy of buying both 840 Feb Calls and Puts with combined outflow of around 25-26 Rs (Rs. 6500 per pair).

One may put stop-loss at around 20 Rs. Traders can come out of the strategy, once any one of these reach 25 Rs.

Infotech Enterprises - promising growth for the future

1) Infotech Enterprise is India's growing Information Technology company. It provides IT based solutions in various domains such as Aerospace, Telecom, Utilities, Consumer Energy, Medical, Oil & Gas to name a few.

2) The company has posted growth rate of 28% in the sales and 50% in profit on year to year basis. Also, it has fared better in European sector which is a positive indication for the company. 

3) The company has recently received many awards for its growth, CSR and governance related matters. It has received "Golden Peacock Awards 2012 for Corporate Governance" which is given to promising IT companies which further provides it the premium over its peer as FIIs and DIIs give focus to corporate governance while investing the funds into a company.

4) The company operates in verticals which has lesser congestion. It is doing well which gives it comparatively stronger platform to boost its business.

5) No shares have been pledged, which is a +ve indication. No major interest expenses (0.01%) and hence no major worry in that space.

6) In terms of valuations, the company is not expensive. It is likely to earn EPS of around 22-24 Rs for FY13. Even at conservative PE of 11-13X, the fair target price arrives in the band of 232-312 Rs. It translates into the potential upside of ~15% from current levels conservatively.

7) In the last one year, the share price has increased by 100%. Though in the last three months, it is trading in the narrow range of 175-195 Rs.

Wishing you a profitable investing!!

Tremendous addition in Open Interest in PSU Banks- 12 Dec 2012

Indian Stock Markets though, have ended flat in today's session, but an interesting trend has seen in the derivatives space.
Amongst the top 10 stocks which have gained Open Interest, 6 are from the banking space, all gaining between 2-12%. These are listed below:
1) Karnataka Bank is up 12%, with Open Interest addition of 58%.
2) Federal Bank is up 5% with Open Interest addition of 46%.
3) Oriental Bank is up 5% with Open Interest addition of 20%.
4) Canara Bank is up 1% with Open Interest addition of 17%.
5) Dena Bank is up 4% with Open Interest addition of 17%.
6) Vijaya Bank is up 4% with Open Interest addition of 15%.
It seems Indian Equity Markets are discounting the news of Bank Re-capitalization and Mergers which is expected to be announced this week. Watch out for the banking space and enter into any Public Sector Banks cautiously. Even if you plan to enter, place strict stop-losses for the same.
Wishing you a profitable trading...