Equity and Option Ideas of the week

Nifty likely to trade in a narrow range, BHEL seems attractive - 19th Sep 2011

2011-09-18T17:53:00.000-07:00

As another eventful week got ended where RBI has again increased the interest rates, Indian Equity Markets are likely to take a day or two of breather. Nifty (benchmark index) is now stuck in a narrow range of 5060-5200 and would like to break it after a pause.

Fundamentally, the concerns remain valid. High Interest Rates are likely to impact the earnings from now on. Growth will also likely to come down. Globally uncertainty looms larger over Europe and USA. Commodity Prices are going up. Amidst such scenario, the expectations should be tapered down.

Nifty move from 4800 to current levels is likely to resume for a while. It is likely to touch 5200-5270 from where we might see another retracement to 4900-5000. If Nifty is able to breach 5270, then the next level comes at 5400.

On the downside, 5030-5040 is a very crucial level. If this gets breached, we might see Nifty going to 4960 and then, 4870 levels. Thus, as a trader it is wise to work under strict stop-losses. Shorts can be opened at 5020 with target prices of 4960 and stop-loss of 5060.

On both fundamental and technical side, BHEL looks attractive. Technically it is close to its medium level support of 1640. Also it has underperformed Nifty by around 10-15% in last three months which it might try to recover in the coming days. For technical traders, one may go long in 1660-1680 range with target prices of 1730-1780 and Stop-loss of 1630.

Comparison with Nifty index

Fundamentally too, one may buy this stock at around current levels. As it is a part of benchmark index, it was trading at PE of 17X in March with EPS of 122 (Ref: Results). Even if we discount the slow down and put down EPS to 110 for this financial year and reduce PE to 16X, then even, its fair price comes at 1750. At fair valuations of 120 EPS and PE of 17X, the price arrives at 2050.

Thus, long term investors can buy the stock at 1660, 1530 levels with probable targets of 1750, 1900, 2050 levels in next 6 months.

Wishing you a great week...

Buying opportunities in mid cap space. Bharat Forge, Indian Bank Buy - 08th August 2011

2011-08-07T09:00:00.001-07:00

The Global Equity Markets had a horrendous time last week. US and European Indices fell by ~ 10%. The ripple effect of USA Debt Downgrade, European default, imminent slowdown in the economies and this list may go on and on and on....

Indian Equity Markets too melt down by 5%. Though the pain on Dalal Street was much more than this. Mid-cap stocks fell down much more than that. Interest Sensitive sectors like Real Estate, Infrastructure fell down too. DLF, Unitech, BHEL, L&T - all big and small names fell down. Reliance too down below 800 Rs mark. One can't count the dead on this battle field.

Amid such scenario, our recommendations did a bit better. Cummins India hit its Buy target of 640. Wow! Rare Buy target achieved in this market. The recommendation is still open @ 605 with target price of 640 and Stop loss of 578.

India Cements fell down but managed to stay above its SL of 64. It closed @ 65. The hope still alive... :) Geodesic Systems too managed to float above its stop loss of 53. It closed @ 55.25. The buy recommendations still intact.

For this week, one may Buy Indian Bank @ 215 with Stop-loss of 208 and target price of 228. The stock has fallen down steeply till Thursday. But on Friday, it shows resilience in the support range of 210-220. Open Interest too was positive too which is a good indication.

Bharat Forge too can be bought at around current levels of 270-275. The stock has fallen steeply from 340 Rs and looks into over sold range. One may buy this stock with Stop-loss of 264 and target price of 292.

Wishing you best of luck for the challenging week!!!

Tremendous buying opportunity in mid-cap stocks amid macro issues - 03rd August 2011

2011-08-03T09:43:00.000-07:00

Indian Equity Markets are having nightmare sessions now a days. At macro levels, things have become scary - US Debt Downgrade which can have cascading effect on the world economy, Europe slowdown, Inflation issue in India, Corruption in Government, High Commodity Prices... The list is endless.

But the bigger question is on how to change this Threat into Opportunity?? For this, we just need to go to the basics and find out stocks which have no or minimal impact from these issues, yet they have fallen with the market. The time is ripe to find out stocks which are going down with the flow, yet their fundamentals intact. And surely, you will lot many such stocks in mid and small cap like GTL Infra, GMR Infra, KS Oils, JP Associates, HCC, IFCI, Geodesic, India Cements...

1) Cummins India - Cummins India has fallen steeply in the last few days from 680 odd levels to 610 levels (~10%). The company is due to announce results tomorrow. Its sales have risen consistently. The business model is intact and has very less interest expenses. Technically too, RSI is around 20 odd levels. One may buy this share in 610-615 Rs range with approximate targets of 640, 660 levels. Stop Loss can be placed at 590 and 570.

2) Geodesic Systems - Geodesic Systems is an IT company that develop software into telecom, financial services and power. The company's revenues have been increasing steadily and has been making efforts to reduce the debt expenses. The company is in run to acquire a company in US and likely to make final announcement in August. It has a good range of applications which has been getting good demand from the clients. Technically too, the stock is trading at 2 year low. RSI is also close to 20 which indicates over-sold range. One may buy this stock in 60-61 range with targets of 65, 75. One may place Stop-loss at 53.

3) India Cements - India Cements has been under consistent pressure for last few quarters and no doubt, has some fundamental issues. But the current stock price suggests more digestion than what is required. The valuations have become really attractive at the current levels. Though the current monsoon season will have a negative impact on the sales, but that will be counted in the next quarter. One may buy the stock in 68-69 Rs with target price of 75, 80, 90, 105 and Stop-loss of 64, 59 and 55.Hope you have a great year of investing!!

Volatile Nifty in coming days, Buy Tata Global and Sell KPIT Cummins - 24th July 2011

2011-07-24T08:35:00.000-07:00

Indian Stock Markets have become volatile on the backdrop of decent quarterly results, FII inflows but deteriorating US debt dispute and high inflation and poor monsoons are putting a check on the further rise. This week of expiry though can become exception and we might see some movement on the reverse side.

This week, Nifty, is expected to become volatile and direction seems not clear. The Options Trader can buy both Nifty 5600 Call and 5600 Put if Nifty hovers around 5600-5610 during initial trade on Monday. In case it makes a gap up opening on the up side, Nifty is likely to face resistance at around 5710-5720 and becomes a sell candidate. On the downside, Nifty can go below 5500 if it breaches 5540 on the downside.Last week, Nifty made the anticipated move and rebounded from 5550 to 5625. Both stocks recommendations though, hit their Stop-losses :(

During the current week, one may sell KPIT Cummins at around 196 for stop-loss of 203 and target price of 187. The stock had a good run up during last few quarters but disappointing results on 21st July pushed it down. Though it had again rebounded on friday but likely to face stiff resistance around 197 mark. Also psychological level of 200 will also play on traders' mind. Another technical factor that will play is the major gap between short term trend line and long term trend line, which is likely to narrow down in the coming days.

On the buy side, one may accumulate Tata Global Beverages at around 102 with target price of 113 and Stop Loss of 96. The stock has been trading in a range of 90-105 for last six months and has rebounded strongly from 90 levels twice. Also the stock is making a bullish pattern now and likely to break the current levels to 113-115.Wishing you a great trading week ahead...

Nifty close to short term support zone. Pidilite overbought PGHH Buy -17th July 2011

2011-07-17T10:16:00.000-07:00

After a negative last week for the bourses, the benchmark indices are likely to show some support in the current range. Quarterly results so far have shown consistent growth coming in the top line, though the bottom line seems hit by rising Interest and Employment costs.

Technically, Nifty is trading close to the support zone of 5530-5560, where it is likely to show some strength. Front line real estate stocks like DLF, Unitech, Sobha Developers, Parsavnath are showing strength and are likely to boost the index up. FMCG stocks too are showing strength which are good indications for the market.

The short-term traders may go long on Nifty in 5530-5540 range. Nifty is likely to move up to 5610-5630 range where it is likely to face some resistance. One may close the position, if Nifty goes below 5510-5515.

Among the stocks, Pidilite Industries is showing resistance for last few weeks at around the current levels, primarily due to technical reasons. RSI is currently close to over-bought zone for this stock. Also the gap between the short-term support and long-term support is quite wide which indicates that the current run up in short-term is difficult to sustain and hence, it might correct a bit. Traders can open their short positions in this scrip at around 170-172 Rs with Stop-loss of 176 and target price of 166.

Another stock that is currently looking good at the moment is Proctor and Gamble (PGHH). It has broken down its current resistance levels of 2000 and hence, is likely to create a short-term rally in the near future. FMCG sector overall is doing well which provides further fillip to this stock. One may enter into this stock at 2010 with stop-loss at 1980 and target price of 2045.

Wishing you a great investing week!!! We will soon come out with more trading and investment ideas.

Nifty in strong resistance zone. Sell can be triggered

2011-05-31T20:42:00.000-07:00

Indian Stock Markets had a tough May month. The markets lost about 4% during the month due to rising interest rates scenario and tampered demand. Among the sectors, rate sensitive ones like Banks, Real-estate and Heavy Engineering suffered the most while IT and FMCG weathered the trend better.

Fundamentally there are several headwinds for the Indian equities, including rising internal crude prices, other commodity prices, scams, and inflation to name a few. This deadly cocktail has given more weightage to inflation than the growth for Central Banks.

Yesterday though was a better day for the markets. The Indian Stock Markets closed up around 2%. Nifty closed the day @ 5560. If we look at technical levels, the markets stand at tough resistance zone now.

The Horizontal line on the graph shows that markets have faced minor to strong resistance @ 5560-5630 range. It has come down around 4 times from those levels. Also, if we see the lines of 5 Day EMA and 34 Day EMA, it tends to converge @ 5600 levels now. Thus, there is strong likely hood that Nifty face strong resistance @ those levels with some support coming at 5520 and then strong support @ 5460.

Traders can use this opportunity to sell in 5560-5600 range with target of 5520 and 5460 and stop-loss @ 5615 and then 5640.

Wishing you a great trading day!!!!

Parsvnath Developers - Headwinds present but valuations provide better Risk vs Reward ratio

2011-03-20T17:43:00.001-07:00

Parsvnath Developers is Delhi NCR based real-estate firm which caters to the needs in both residential and commercial segments. The company primarily started from Delhi NCR region and gradually expanded to other cities of India.

During the last recession, the company suffered major losses due to tremendous amount of leverage on its books. In March '09 results, the sales revenues were reduced to half on Y-o-Y basis whilst the interest expenses increased to double. Its Interest / Net Profit ratio had increased to 36% in FY'09 results.

Subsequently, the company restructured its business, which has started to give some results now. The company's Net Profit has been increasing steadily and is expected to see it grow by around 35% this year (Click here for results).

Though few concerns remain. With Central Bank constantly increasing the benchmark rates, the loans will surely get expensive which would result in slowdown in demand (sales can decline) and also increase the interest expenses (higher borrowing cost). Also, the last quarter result shown decline in revenues and increase in other expenses which again put some doubts on the financial health of the company,

Technically though, the share price has declined sharply in the last two months. In Apr '10, the share price was trading @ PE of 8X (57 Rs price, EPS - 7 Rs). With expected EPS of 9.5 Rs and current price of 37 Rs, it is trading at PE of just 4X, which seems cheap.

Even in the current context, we may reduce PE valuations to 6X. Even in that case, the fair price comes @ around 60 Rs which provides an upside of not less than 50%.

Hence, it becomes a buy with first target of 47 Rs (@ PE of 5X) and second target of 57 (@ PE of 6X).

Eicher Motors - fundamentally good stock and valuations attractive

2011-03-05T18:20:00.000-08:00

Eicher Motors is India's leading tractor manufacturer company. Royal Enfield brand too belongs to this firm. The company has shown tremendous growth since last recession when interest costs and less demand on the agriculture front had put steep pressure on the bottom line.

With new economic horizon, the working environment for this company has changed. Both Central and State Governments are now focussing on the agriculture sector which would help the company in increasing its sales. Also it has exclusive tie-up with International HCV manufacturer -Volvo - for trucks manufacturing. Thus the company foray into Rural India space would help it continue to grow in the near future.

In terms of financials, the company was into tremendous interest costs pressure in 2008 where Sales/ Interest Expenses ratio was around 14% which now has been reduced to mere 2%. The reduce in interest expenses along with improved sales has helped the firm notch 100% increase in Net Profit on Y-o-Y basis.

Valuation-wise the stock used to trade in PEX of 18-20 times during recession period. In the current bull market, it traded at PEX of 45-50 times. Currently, it is trading at PEX of 35. With better financial prospects in the future and its working in "Agriculture" domain, it should demand PE of at least 35 times. With estimated EPS of 35 Rs (30% gains Y-o-Y) and PE of 35X, its fair price comes at 1250 Rs for next one year which provides returns of 20% from current market price.

Technically, it has good support at 1020-1050 levels. If this level is broken, the stock can be accumulated at around 850-860 levels, which is extremely attractive. After this level, one may buy around 600-650 levels where exists Stop-loss as well for this stock (Ref: graph).

My advise is to buy around 50% at current levels and 50% at 850 levels for optimal gains. In case of last resort, put 100% more at 650 levels with strict stop-loss of 580.

United Bank of India - Strong Fundamentals, current turmoil presents attractive opportunity.

2011-02-25T01:01:00.000-08:00

United Bank of India is a Public Sector Undertaking (PSU) Bank based in West Bengal. The bank financal results have coe very good for Dec Quarter. Also, it has been showing consecutive gains in the revenues for last five quarters. The Net Profit has also doubled in last one year which again is a positive signal.

The share though, has come down steeply in the recent correction and is now available at attractive valuations. From PE of 10X last year, it has now fallen to more attractive PE of less than 6X.

Technically too, the share is likely to find decent support in 80-87 Rs zone where stands its long term base line.

One may buy this stock with target price of 125 (6X PE), 144 (9X PE) and 160 (10X PE)

Panacea Biotech becomes a turnaround story and hence, a buy

2011-02-24T08:08:00.000-08:00

Panacea Biotech is India's third largest biotech firm. The company has been generating steady profits for last few quarters. The more recent news of successful redemption of Zero Coupon bonds worth 3.6 million USD indicate the strong financial health of the company.

In the most recent interview by the promoters, they have given the estimated EPS of 22 Rs for this financial year. At share price of Rs. 177, it translates into PE of 8X which is extremely promising. Another investment parameter (PEG ratio) which compares PE with the growth rate of the company is @ 0.2, which is again very less.

Technically too, the stock is in the broad support zone of 160-175. One may accumulate 50% of its investment value at 175 Rs and rest 50% at 165 Rs. The potential target price for the stock is at 225 Rs (at 10X PE) and 280 Rs (at 13X PE). The time-horizon for the investment can be 9-12 months.

Wishing you a great investing!!

Macro Economic factors look to spoil the bull party- 03rd January 2010

2011-01-03T08:49:00.000-08:00

Indian Equity Markets have made a good rebound from intermediate lows made in the early part of December 2010.

But if we look at the charts carefully, even though it is giving bullish signals, the correction gaps have widen up than before. In other words, the time to recovery is increasing as we move up. It indicates that confidence level is now as good as it was in the lower levels.

Then the only reason we have been goin up is the liquidity factor. The long term investors must utilize this opportunity to book profits and wait for a good correction to come. With high current account deficit, rising interest rate regime and high inflation, there has been some serious fine tuning required in the Indian economy before it can resume its meaningful upward journey.

Short term traders must go into the market with strict stop-losses. The logic is not to afraid to book losses quickly.

Technically, we are into bullish zone till the time market crosses 6170-6200. Also RSI which is in mid-50 range can go upto 70-80 levels where we would see an over bought region. In this range, we anticipate another fall to come into the markets.

Options traders can sell Nifty 6300-6400 Calls for January at every rise. In the downward trend, one may sell Nifty 5800-5900 Puts.

Wishing you a great trading time ahead!!!

Short term correction can give medium term buying opportunity - 20th October 2010

2010-10-19T10:04:00.000-07:00

There is an old saying that "People have Short Memories". After all the gung-ho on Indian economy in 2007, the next two years just saw the opposite before another reversal happened and markets climbed to their all time high. But has the time to book profits have actually come???

Honestly, the answer is "No". No doubt markets have corrected in the last two weeks and why not?? After tremendous rally in the market in September, its time to book some profits and take money out of the table. But that doesn't mean that rally has ended... It is just an intermediary phase. So bulls hang on a bit before you can throw your towel in the ring...

Anyways coming back to the today's market. The markets today opened flat in the morning and then escalated sharply in the afternoon after Tax collection figures appeared. But then in the last hour of the day, the markets again corrected and closed down around 1% down. The volatility has not increased much which indicates that correction may likely to continue for a while.

The provisional figures released by exchanges indicated buying by Foreign Institutional Investors (FII) by around 120 Crores and Domestic Institutions by around 200 Crores. Though Dow Jones has opened in red trading around 1% down on account of China curbs.

China curbs will likely to affect Indian equities in a positive way as Chinese market will now become less attractive for equity investments and hence, will now divert more money into the Indian markets allocated for Asia by Foreign funds.

Tomorrow markets are likely to open in Red. The support zone for Nifty Spot is around 5980-5990 where one may buy Nifty futures with Stop-loss @ 5960 and target price range of 6070. In case Nifty Spot breaches 5960, then we may sell Nifty with Stop-loss @ 6000 and target price range of 5890.

One may also buy Bank Nifty if is trades in 12080-12100 range tomorrow morning with Stop-loss @ 12030 and target price range of 12380.

Wishing you a great trading day tomorrow!!!

Liquidity defying fundamental issues in Indian stocks Market, trend dangerous - 13th August 2010

2010-08-12T17:54:00.000-07:00

Indian Equity Markets had a volatile session on Thursday as markets try to balance it out between adverse global cues and renewed optimism in Indian companies after Tata Motors and SBI results lately. The markets opened weak on account of overnight weak closing in US markets, but consolidated at the lower levels and gradually recovered to close flat. The Industrial Production data for June came lower @ 7% against 14% on m-o-m basis, but ably covered by steller results by SBI which posted growth of 25% on y--y basis.

Among the sectors, Banking sector did pretty well on account of good SBI results. Stocks like PNB, Axis Bank too rallied alongside SBI which helped the benchmark indices recovered as weightage of banking stocks in the indices is quite high.

Fundamentally, stocks markets have few concerns which they need to overcome. The most important one is weak global cues. US and European economies are again facing the headwinds. The unemployment numbers, trade deficit data are indicating that growth has still not picked up in these ecoomies.These will surely impact the profitability of Indian companies as well, especially in Information Technology, Textiles, Oil & Gas sectors.

Another cause of concern is Inflation. Earlier the blame game was put on Food items which were called expensive due to weak monsoon last year. But the data in the last few months have indicated that it has now spread to non-food items as well. The steep slash in benchmark rates last year, though has propped up growth but also increase the inflation as well. Now central bank is hking the benchmark rates and that will surely going to hit the profitability of India companies as interest rates increase.

Technically, markets are already trading at almost all time high PE valuations of 20-21 times. The global and domestic level concerns do not justify such high valuations. The only suporting factor is the high amount of liquidity in the equities world due to almost zero benchmark rates overseas. It is causing immense speculation in the markets due to which we are seeing markets scaling new highs despite the fundamental concerns.

Henceforth, we advise clients to stay put from the markets for a while and keep themselves in cash by atleast 30%. Also one must trade with strict stop-losses and target levels to keep its books running.

Technically Nifty is trading in a narrow range throughout this month. Traders are advised to maintain "Sell on Rise" strategy till the time Nifty breaches 5470. Hence, one may sell Nifty @ 5425-5435 range with stop loss @ 5470 and target price of 5350. In case, Nifty breaches 5470, one may go long on Nifty with target price of 5525 and Stop-loss @ 5435.

Wishing you a great trading day today!!

Rich valuations of Indian equities likely to bring more pain than global equities, caution advised - 12th August 2010

2010-08-11T09:55:00.000-07:00

Indian Equity Markets had a weak opening on Wednesday, following the weak outlook by Federal Reserve. The rich valuations of Indian stocks are making it further more attractive to sell. The stocks remained in pressure throughout the day and finally closing the day down around 1%.

Among the sectors, almost every consumption and investment related stocks fell. Commodity stocks like Sterlite, Tata Steel fell. Construction and Infrastructure and related stocks like IDFC, Unitech, HDFC too fell putting more pressure on Indices.

US markets have too opened weak on account of negative Fed Outlook, slowdown in Chinese economy and weak economic data today. Dow Jones is currently trading 200 points low and we will most likely to have weak opening on Indian bourses tomorrow as well.

Technically, Nifty may go down till 5335-5350 where it might try to find some support. If Nifty slips below 5335, then we might see some more correction coming in which might take Nifty to 5280. Hence, traders can initially buy Nifty in 5345-5350 range with Stop-loss @ 5335 and target @ 5370. In case, Nifty breaches below 5335, then traders can go short with Stop-loss @ 5360 and target price of 5290.

Among the stocks, one may buy Cipla @ 306-309 range with Stop-loss @ 301 and target price of 321. The stock has corrected by good 15% and likely to find some good support in 305-310 range.

Wishing you a great trading day tomorrow!!!

Federal Reserve meeting likely to provide short term direction to Indian markets - 11th August 2010

2010-08-10T09:03:00.001-07:00

After a hiatus, it feels good to come on Writing board on blogger. Thanks to blogger for providing me a personal space.

Anyways coming back to Indian Equity Markets. After breaking the crucial technical levels last week, Indian markets remained in backfoot during the first two days of the week. This seems anticipated as Indian markets look richly valued at the current levels. The earnings season has been a bit disappointing, though monsoon and other macro economic indicators are giving a positive signal. Another factor which is driving the markets has been liquidity. FIIs have been pumping continouous inflows into the Indian equities and help the markets sustain at the current levels.

Today is the critical day for the markets as US Federal Reserve will be sitting tonight to gauge the current economic scenario. It is highly probable that US Federal Reserve will announce more stimulus measure for the economy to help it tide over the current recession.

The downside tonight in US markets could trigger short term blip in Indian equities which might take benchmark index Nifty to 5350-5370 levels. If this level too gets breached, then next support only come at 5280. On the contrary if US markets overcome the initial weakness and opened flat / in green tonight, we might see Nifty heading to 5525-5540 levels in the short term. I am quite optimistic that liquidity situation should help its reach these levels.

Fundamentally, two stocks which are looking attractive at the current levels are GMR Infra and Suzlon Energy. Both the stocks have been languishing in 55-60 Rs range. Both the companies have been saddled with debt burden but are doing their bit to tide the difficult situation and can be accumulated with a long term perspective.

Wishing you a great trading day tomorrow!!!

RBI tightening and lack of extra-ordinary results keeping markets in check - 29th July 2010

2010-07-28T08:11:00.000-07:00

Indian Equity Markets had a weak trading session on the backdrop of correction in big heavyweights like Reliance, HUL, DLF and L&T. Also the unwinding of long derivatives positions also put further pressure on the bourses. Another factor which is causing worry for the markets have been lack of any positive trigger from the results. The growth expectations have already been factored in. Also, it is feared that RBI tightening of policy rates will put pressure on lending rates and hence, can squeeze the profit margins of the companies.

Provisional data released by FIIs indicate some encouraging picture. In the Capital Market segment, FIIs have bought equities worth 500 Crores while in the derivatives segment, they have sold futures positions worth 700 Crores.

Technically, the target given for Nifty has been achieved for today. Nifty after reaching its recommended sell price of 5440 later hit the target price of 5410 givin returns of Rs. 1500 per lot.

Dow Jones has opened negative on backdrop of some weak orders data. The correction in the US markets is expected after steep run fro 9800 levels to 10550 levels. If the trend persists and Dow Jones closed in red, we may see negative opening in the bourses tomorrow morning.

In case of flattish opening, one may buy Nifty in 5385-5390 range with Stop-loss @ 5375 and target levels of 5420. In case of gap down opening, the support levels can be seen @ 5350-5355. One may buy Nifty in these levels with stop-loss @ 5335 and target price of 5375. In case of positive opening, one may sell Nifty @ 5430 with stop-loss @ 5445 and target price of 5410.

Wishing you a great trading day tomorrow!!

Indian Stock Markets facing heavy head winds at upper levels, correction likely - 28th July 2010

2010-07-27T08:38:00.000-07:00

Well RBI Quarterly Review Policy has finally come and thankfully brought no major surprises!!! Well, there has been so much of discussion happening in the economic circles regarding RBI stance in its quarterly review policy and whether it will take any major step to combat the inflation which is going steadily above 10%. Much to the relief of the markets, it has not brought any major surprises - Reverse Repo Rate up by 50 bps, repo by 25 bps, CRR remains unchanged.

Two major heavyweights - Reliance Industries and L&T have announced their results today. L&L results have been disappointing, but Reliance Industries Results have come in line with the expectations. As Reliance results have come after the market closes, we may see some positive action coming in the stock during early trade tomorrow.

Real-estate sector stocks have rallied after RBI didn't brought any major surprises in its review. DLF rallied by more than 2% and so do other real-estate stocks. The stock markets did rallied a bit after RBI announcement but closed a tad lower. Sensex though is able to give a closing above 18000 which is an encouraging indication.

Technically, the markets have been in a bit of over-bought zone. As results of the heavyweights have not been exceptionally great and RBI tightening its interest rate regime, these will surely put pressure on the equities in the coming few months. Any further rise can only be due to tremendous FII inflows and can be taken as good way to book some profits.

Dow Jones has opened flat and is likely to show some resistance around 10500-10550 mark. In such backdrop, we might see some flattish to negative opening in the market tomorrow. Also, we might see the unwinding of long positions for July series which might bring some more pressure on the indices.

Tomorrow one may adopt "Sell on Rise" strategy with major resistance levels now seen at 5450, 5470 in case of positive opening. One may put a stop-loss of 5487 and target price of 5420. In case of flattish opening, one may keep a resistance levels of 5435-5440 with stop-loss of 5455 and target price of 5410. For deep down opening, one may keep resistance levels of 5400, 5410 with stop-los @ 5430 and target price of 5360.

Wishing you a great trading day tomorrow!!

RBI Quarterly Review, RIL and L&T results likely to dominate Markets on Tuesday - 27th July 2010

2010-07-26T09:25:00.000-07:00

Indian Equity Markets had a volatile trading session on Monday, one back of event-filled Tuesday. Tuesday will see three major events happening - RBI Quarterly Review, L&T and Reliance Industries Quarterly Results that are expected post-market.

Among the sectors, Pharma sector saw some buying coming in while Automobile Sector tripped on the back of poor results from Maruti and increase in loyalty payment to the parent company by 81% on y-o-y basis. Hero Honda too falled by 8% expecting the similar movement of funds to the parent company.

Provisional Data released by exchanges indicate subdued picture. Domestic Institutional Investors sold heavily during the day. They sold equities worth 700 Crores while Foreign Institutional Investors bought equities worth 120 Crores. Tomorrow's RBI policy is likely to be hawkish which is putting pressure on the markets.

Technically Nifty is likely to face some resistance @ 5450 level and then @ 5470 level tomorrow. If RBI doesn't act more hawkish than expected, then we may see some upward movement in the market. In such case, one may sell Nifty in 5460-5470 range with stop-loss @ 5487 and stop-loss @ 5420.

On the contrary if RBI policy comes more hawkish than expected, then we may see Nifty heading to 5350. In such case, one may buy Nifty @ 5340-5350 range with stop-loss @ 5325 and target price of 5380.

Among the stocks, one may continue to accumulate NMDC in 258-260 range with stop-loss @ 245 and target price @ 290.

Wishing you a great trading day tomorrow!!

Indian equity markets in a range, caution advised - 22nd July 2010

2010-07-21T11:36:00.000-07:00

Indian Equity Markets had a good session on Wednesday, following the positive global sentiments. The markets had a gap up opening and remained in green consistently throughout the day. Almost every sector remained positive, more noticably Real-estate and IT. Mid-cap space too did pretty well. Nifty Volatility Index (VIX) declined by more than 1% on the back of consistency shown by the markets.

Provisional data released by exchanges gave somewhat mixed picture. In the Capital Market segment, Foreign Institutional Investors were net buyers by around 300 Crores while in the Derivatives segment, some major buying was seen in Options segment by around 4000 Crores. US markets have opened in red on the back of Bernanke speech on US economy. Also, the results season has not started on the optimistic note hence putting more pressure on the indices.

On the basis of these events, we might see a gap-down opening tomorrow morning in Asian bourses. Nifty has an intermediate support @ 5350 and resistance at 5430-5440. In case the Nifty trades in 5350-5360 range tomorrow, one may buy Nifty with target price of 5375 and Stop-loss of 5335. On the other side, if Nifty reaches its resistance range of 5425-5435, one may sell Nifty with stop-loss of 5455 and target price of 5410.

Wishing you a great trading day tomorrow!!

Indian markets looking weak at the higher levels, correction likely before expiry - 21 July 2010

2010-07-20T17:33:00.000-07:00

Indian Equity Markets had a lousy session on Tuesday as markets traded within a small range throughout the day. In fact, it has been more than a week since markets have been trading within a narrow range. After trading in a positive territory in the early part of the day, the markets gave up its gains and finally ending the day down by quarter of a percent.

Almost all the sectors were in red, albeit not more than 1%. Financial Services sector declined the maximum. The correction was due after surging continously for last two weeks in the banking stocks. Construction stocks had a good run - DLF, Unitech, Sobha Developers, HCC etc have gained somewhere between 2-4%.

Provisional data released by exchanges indicates somewhat subdued picture. Foreign Institutional Investors have bought shares worth 250 Crores but in the derivatives segment, they have been net sellers in the index segment.

US markets have gained by 0.5% last night, more on the back of technical rally. It opened weak after IBM and Goldman Sachs reported disappointing results, but gradually recovered and finally closing in the green. As the rally is purely technical in nature, we might see Asian Indices having a flattish-to-negative opening in the early part of the trade.

For Nifty, we might see some support coming @ 5345-5350 levels. If these levels are breached, we might see Nifty heading to 5300 levels where it is widely speculated to find a strong support level. Though my personal view is that in case Nifty now reaches 5300 level, it is likely to breach it as there has been massive shorting of Nifty 5300 and 5200 Strikes by the traders and we might see covering of some of these short positions which could pull down the index further. On the upside, Nifty has mild resistance @ 5390-5400. The major resistance stands @ 5435-5450 levels. If this is too breached, then Nifty may head to 5535 levels. Traders are advised to go long on Nifty today in 5340-5345 range with stop-loss @ 5325 and target price of 5360.

Wishing you a great trading day today!!!

Indian stock markets managed to hold, but outperformance may not last long - 20th July 2010

2010-07-19T08:27:00.000-07:00

Indian Equity Markets had a good trading session on Monday. Despite the meltdown in US markets on Friday, Asian indices including India managed to hold back their levels steadily and finally closing the day flat. Among the sectors, Consumer Goods and Industrial Manufacturing sectors declined the maximum while Financial Services and Construction sectors gained during the day.

Provisional data released by exchanges gave a mixed look. In the Capital Market segment, FIIs were among the net buyers by around 150 Crores while in the derivatives segment, they were net sellers in both futures and Options segment.

Technically Nifty is able to hold on to 5300 levels pretty comfortably and looked like a strong support. But with global markets looking weak, we may see a strong retest of these levels. If Nifty breaches these levels, then we may see markets heading towards 5150 and then 5070 levels. On the upside, 5440-5460 levels and then, 5530-5540 levels are likely to provide the major resistance.

So far, we have been able to outperform the global indices, but from now on we advise some caution to the investors. One should use short term rallies to book profits and keep themselves in cash by atleast 30%. One may also hedge the positions by buying Nifty Puts for Strike Prices 5200 / 5300 of August series.

Wishing you a great trading day tomorrow!!

Indian equities in midst of growth story and global slowdown, caution recommended - 19th July 2010

2010-07-18T09:18:00.000-07:00

Indian Equity Markets on Friday had a volatile session on the back of flat US markets on Thursday and no major cues from the domestic markets as well. TCS announced its results on Friday morning, which have exceeded analysts' expectations. The stock in turn, went up by more than 7% and pushed almost every stock in Information Technology space.

The financial results have been so far satisfactory. Some decline is expected on sequential basis, and hence any positive suprise is taken with charm on the Dalal Street. Though companies in commodities space likely to feel more heat, as withdrawal of stimulus phase-wise will keep pressure on demand and hence, on the growth of these companies.

Provisional data released by exchanges on Friday have been good. Foreign Institutional Investors were net buyers by around 650 Crores while Domestic Institutions have been net sellers by around 300 Crores. In the derivatives segment, FIIs have been buying continiously in the futures segment but also writing Lower Strike Price Puts and Higher Strike Prices Calls. This indicates that FIIs see limited movement on the downside as well as on the upside from the current levels.

Technically, Nifty is likely to find some support in 5280-5320 range. The next strong support stands @ 5200-5230 range for the markets. If this level is broken, the next support is seen @ 5060-5080 range. On the upside, the major resistance is seen @ 5430-5460 range. If this resistance is broken on closing basis, then Nifty will find next resistance @ 5530-5550 range.

Stock-specific, Tata Motors-M&M pair trade has finally reached its target. Tata Motors hit its target price of 815 and closed @ 830. This pair trade strategy gave the profits of 52000 Rs. Tata Power too hit its target price of 1340, giving the profits of 6200 Rs per lot.

For the coming week, Cement stocks story can be retained. One may buy India Cements and Ultratech Cements around the current levels. For India Cements, one may keep Stop loss @ 99 and for Ultratech cements, one may keep Stop-loss @ 810. Tomorrow, one may sell Nifty if it rebounds from 5310-5330 levels @ 5340 with target price of 5280 and stop-loss of 5390.

Wishing you very best of luck for the coming week!!

Volatility increases as Indian equity markets near to resistance zone - 15th July 2010

2010-07-14T09:11:00.000-07:00

Indian Equity Markets had a voltile session on Wednesday. On the back of positive US markets, Nifty opened higher but found 18000 / 5450 levels in Sensex / Nifty as tough resistance to break. Finally, markets lost the strength and corrected by about quarter of a percent. Among the sectors, Banking stocks did well while IT continues to lose its strength. Technically IT looks in an over-sold range and we might see some short covering coming in this sector.

Provisional data released by exchanges gave some positive indications. Depite the correction, Foreign Institutional Investors (FIIs) remained net buyers by around 500 Crores. In the derivatives segment, FIIs opened some short positions on the upper levels which indicates that resistance levels mentioned above is likely to be a tough nut to crack.

US markets have opened flattish on the back of disappointing retail sales figures. US markets likely to stay flat or trade with a negative bias. Technially, Nifty is also likely to find some support in 5280-5320 range while it may find some tough resistance in 5430-5450 range. The traders may wait before any clear signal emerges.

All the stocks recommendations remained intact. Technically, NMDC looks pretty strong in 255-265 range and can go up to 290-300 in the short term. Similarly, Max India has also given a positive breakthrough and can go upto 175 in the near term.

Wishing you a great trading day tomorrow!!

Liquidity and Positive Global sentiments pushing Indian Equity markets up - 14th July 2010

2010-07-13T10:01:00.000-07:00

As discussed, Indian equity Markets had a good trading session. After trading in a negative range during the earlier part of the day, the markets bounced back after Europe opened strong. Finally, benchmark indices able to breakthrough key resistance levels and closed the day up around 0.5%.

Among the sectors, Metals and Constructions have gained during the day, while Information Technology and Telecom sectors traded in red during the day. Infosys Results have been disappointing which put pressure on IT stocks.

Provisional data released by exchanges have been good. Foreign Institutional Investors (FIIs) made net purchases of about 800 Crores while Domestic Institutions were net sellers by around 600 Crores. In the derivatives segment too, no major cues have been derived.

US markets have opened in a positive zone which should help Indian markets open in a positive zone tomorrow morning. The markets can find strong resistance in 5440-5450 range. One may sell Nifty in this range with stop-loss @5465 and target price @ 5415. Technically as suggested, Tata Power remained in strong trading zone of 1310-1320. Those who have taken this position can place target price @ 1340 and stop-loss at 1297.

Max India which was suggested 23 June @ 163 today made strong gains and now trading @ 167. The target price can be maintained @ 175 for this position.

Wishing you a great trading day tomorrow!!

Infosys going to blow Q1 earnings season tomorrow - 13th July 2010

2010-07-12T09:45:00.000-07:00

Indian Stock Markets had a decent trading session on Monday, on the back of global positive cues and after-effects of IMF upgrade of India's GDP figures. Among the sectors, Banks and IT did well, while Oil & Gas and Telecom sectors looked weak.

From tomorrow, Q1 season is going to start with Infosys results, but IT stocks have already seen appreciation in last 2 weeks and hence tomorrow we might see some profit booking coming in these stocks. Similarly, Banking stocks have also seen decent uptick in last one week and hence, chances of some profit booking coming in these stocks.

Provisional data released by exchanges indicates net buying from Foreign Institutional Investors (FIIs) while DIIs made net sell of about 300 Crores. In the derivatives segment too, FIIs made net purchases of about 1000 Crores.

Technically, Nifty reached its target levels of 5380 comfortably during early trading session. The next resistance level is seen @ 5430-5445. One may sell Nifty 5430-5440 range with target levels of 5380 and stop-loss of 5465. In Stock-specific recommedation, one may buy Tata Power in 1310-1315 range with stop-loss @ 1297 and target price of 1340.

Wishing you a great trading day ahead!!!

Indian Equity markets entering into Q1 results season, stock specific action likely- 12th July2010

2010-07-11T10:33:00.000-07:00

Indian equity markets had a good trading session on Friday, following the encouraging global cues from US markets that ended up on Thursday night. Among the sectors, Telecom did pretty well on back of upgrade done by Credit Suisse for this sector. All three Nifty stocks - Bharti Airtel, Idea and RCOM were up by 8%, 12% and 4% respectively. Metals and Automobiles sectors too did pretty well. Finally, the benchmark indices - Sensex and Nifty closed the day more than 1% each.

Provisional data released by exchanges gave an encouraging sign to the traders and investors. Foreign Institutional Investors remained net buyers in tune of Rs 1000 Crores. In the derivatives segment too, FIIs made net purchases of around 1500 Crores in the futures segment. In the Options segment too, some Put writing were seen @ 5200 and 5300 Nifty Strike Prices.

Technically Nifty is now in bullish trend with a short term target of 5380-5400 and the next target levels of 5450. The reverse in trend may be seen below 5250. The traders who already have long positions may cover their positions around 5380.

Another point that is worth mentioning is the onset of results season. Infosys will initiate the earnings sesion with its Q1 results on Tuesday. Hence, we are now likely to see stock-specific action happening in next fortnight.

Among the stocks recommended, Gujarat Flourochemicals hit its target price of 170 during the Friday session giving the returns of around 8% within two weeks. The remaining strategies remain intact.

Wishing you a great trading day tomorrow!!

Indian equity markets making a breakthrough, likely to go up atleast 2% - 09th July2010

2010-07-08T17:06:00.000-07:00

As discussed, Indian Stock Markets finally made a positive breakthrough on Thursday session, taking markets above psycological levels of 5325, though closing the day below 5300 @ 5296. It was a good trading session overall for the markets.

Commodities stocks like Sterlite, Tata Steel along with Construction stocks like DLF, Unitech did well while Cements stocks continue to lag behind. Though technically, Cements stocks should make an intermediate base around the current levels and hence, can be a good pick.

Provisional data released by exchanges have been encouraging. Foreign Institutional Investors (FII) made a net purchase of 900 Crores while Domestic Institutions were net sellers by around 300 Crores. In the derivatives segment, FIIs have again been net buyers in the futures side, though Options didn't give a clear trend. Though the kind of put writing we have seen, it seems 5200 seems a strong support for this expiry.

Another positive factor which has been playing over the markets has been monsoon. Monsoon season, this time has been pretty good and should help inflation to cool down a bit. Though, most of the inflation seems on the demand side, as manufacturing index is also on an uptick. Hence, the rate hike seems imminent in July 29 policy meet.|

Technically, Nifty crossed its upper breakthrough level of 5325 and hence, is likely to go up to 5390 in the near term. The stop-loss is pegged at 5270. Amongst the stocks, cement stocks can be accumulated for short term uptick. One may buy Ultratech Cements and Indian Cements according to the levels given in yesterday's post.

Wishing you a great trading day ahead!!!

Cement stocks likely to make rebound, Indian stock markets may trade in a range - 08th July 2010

2010-07-07T09:20:00.000-07:00

Indian Equity Markets had a weak trading session on Wednesday, on account of negative global cues. All sectors, except Telecom were decline, more notably Energy. Heavyweight Stocks like ONGC, Reliance Industries, and Hindalco declined.

Provisional data released by exchanges indicate net selling by 50 Crores in the Capital Market segment, while Domestic Institutional Investors have been net buyers by around 350 Crores. In the derivatives segment, futures have shown some net selling but there has been some buying coming in Options segment. This buying may be on account of covering of short positions on Put side or buying of Call, which is yet not clear. The trend in next 2 days will give clear picture about the same.

Dow Jones has opened strong today on account of better Q2 prospects for financial companies. As discussed, Dow Jones can go upto 10080 in the near term which should aid the Indian stock markets as well. Technically too, Nifty is still trading within a range and no clear trend is yet seen. As discussed earlier as well, the breakout will be decided if Nifty crosses 5320 on the upside or 5155 on the downside. Two stocks that looked strong are Ultratech Cements and India Cements. Cement stocks have been on decline for last few months and seems like making a base around the current levels.

One may buy Ultratech Cements in 855-865 range with 810 as stop-loss and 920 as target price. For India Cements, one may buy the stock @ current levels of 107-109 with stop-loss of 98 and target price of 120.

Wishing you a great trading day tomorrow!!!

Indian stock markets approaching Q1 results season, look positive bias with caution - 07th July2010

2010-07-06T08:23:00.000-07:00

Indian Equity Markets finally had a traders' session on Tuesday. After a lacklustre session on Monday, the markets gained by more than 1% today. The markets initially opened flat and gradually gained momentum taking cues from European markets and Dow Jones futures trading in Europe.

Among the sectors, Metals and Information Technology sectors did well. Stocks like Hindalco, Jindal Steel, TCS and Infosys have gained by more than 1.5%. Cement stocks though remained in negative territory. The supply glut is pulling the cement prices down and hence, putting pressure on Net Profit Margins of cement companies.

Provisional data released by exchanges gave encouraging cues. Foreign Institutional Investors (FII) have been net buyers by around 300 Crores. In the derivatives segment too, FIIs have covered some of the short positions created earlier.

Nifty @ 5200 seems a decent support in the near short term. Technically, Dow Jones too look in short-covering mode and likely to go up till 10070 at-least in the short term where it has a key resistance. The next resistance level stands at 10300, breaking which will confirm intermediate bullish trend. Here in India, the traders need to be cautious as markets have already been over-valued. One may only go long if Nifty stays above 5320 on hourly basis tomorrow, with stop-loss of 5270 and target price of 5400.

Options traders can sell Nifty 5500 Call above 35 with stop-loss of 50 and target price of "0". Alternatively, one may go int bear spread buying 5500 Put and selling 5400 Put once Nifty approaches 5450, though it's still a bit far.

All stock strategies suggested earlier have been intact. Wishing you a great trading day tomorrow!!!

After a dull day, action likely to resume in Indian equity markets - 06th July2010

2010-07-05T17:49:00.000-07:00

Yesterday was among those days, when a trader just simply can go for a nice outing or long drive in monsoon rains and come back with no change in the indices. The markets remained stagnant within 0.5% range throughout the day closing the day almost flat. The volumes were absymally low due to 'Bharat Band" effect. All the sectoral indices remain flat, except Industrial and Capital Goods sector that saw some decline in stocks like BHEL, L&T and Siemens.

Provisional data released by exchanges indicate net selling by Foreign Institutional Investors (FII) by around 250 Crores while Domestic Institutions too made selling by around 50 Crores. In the derivatives segment too, FIIs activity were largely muted with no major change.

US was closed yesterday on account of Independence Day. Europe closed flat, but Asian markets opened weak today morning due to strengthening of Yen against Euro and uncertainity on European economy persists.

On account of it, we may see a negative opening in Indian Equity markets today. The direction for the markets are still unclear and hence, we recommend no triggers beyond 5155 on the downside and 5320 on the upside. If Nifty able to breach 5155 on the downside, then we may sell Nifty with a stop-loss of 5215 and target of 5080, whilst if Nifty able to break 5320 on the upside, then we may see the upside levels of 5400 and stop-loss of 5270. The stock recommendations made earlier remained intact as markets failed to move in either of the directions.

Wishing you a great trading day!! Let's hope markets display its usual volatile characteristic today.

Indian equity Markets hanging equally balanced between Bulls and Bears - 04th Juy2010

2010-07-04T09:04:00.000-07:00

Indian Equity markets had a flattish session on Friday. After remaining in a positive zone in the first half, markets lost the momentum and dragged down to its lows of the day, finally closing around 0.25%. The sector that looked really weak was cement where all major stocks like ACC, Jaipakash and Ambuja Cements fell down.

RBI Rate Hike, albeit happened post market timings will have an impact on the markets tomorrow morning. The banking and automobile stocks are likely to face some resistance tomorrow morning while IT and Pharma stocks might regain some buying.

The outlook for this month looks quite challenging. The markets are likely to face strong headwinds at the upper levels while it may find some support coming in lower levels due to strong funds inflow coming from overseas. Hence, we are likely to see a range bound market during the current month.

For coming few days, the outlook seems unclear as markets are equally balanced between bulls and bears. Hence one is advised to sell Nifty only if it breaches 5155 on the lower side with stop-loss of 5215 and target levels of 5080. On the upside, one may buy Nifty above 5320 with stop-loss of 5270 and target price of 5400.

Just as a statistical note, for all the stratgies recommended in June, our Booked P/L comes at 35000 Rs which has been good. For open positions, P/L has been around 20000 Rs.

Wishing you a great trading day tomorrow!!

Global Cues to drive Indian Equity markets, closer to support zone - 02nd July 2010

2010-07-01T10:16:00.000-07:00

Following the global peers, Indian Stock Markets had a weak trading session on Thursday with benchmark indices Nifty and Sensex fell by around 1% each. All the sectors have closed in the red, with metals, automobiles and construction sectors taking the maximum brunt.

Provisional data released by exchanges indicate a dismal picture. Foreign Institutional Investors have been net sellers by around 200 Crores during today's trading. In the derivatives segment, there has been massive selling seen in the Index and Stocks Futures segment, while some Put writing is also seen happening in 5200 and 5100 Nifty Puts.

Now the big question arises where are our markets head to now?? Technically, a lot depends upon Dow Jones. Dow Jones has found some support at 9650 from where it has rebounded strongly till now. If 9650 gets broken decisively, then we might see next support coming at 9200 only. In this scenario, Nifty @ 4800 looks imminent.

Alternatively, if Dow Jones able to regain strength from here, we might see it heading towards 10100. In this case, Nifty can head towards 5400 again, albeit it is doutbful that it will sustain at those levels because the kind of Call writing is seen at those levels indicate that those levels will give tough resistance.

Traders may take a Bull spread strategy by buying Nifty 5200 Call and Selling 5300 Call when Nifty comes in the range of 5200-5215. TCS Sell strategy has hit its target price today and gave a profit of 16000 Rs per lot.

The other strattegies remain intact, including pair trade strategy of M&M-Tata Motors... Its been 18 days. Wow!!!

Wishing you a great trading day tomorrow!!

Indian Equity Markets osciallating in a range, breakout unlikely - 01st July 2010

2010-06-30T10:40:00.000-07:00

Warren Buffet has once rightly said "The equity markets have the power to remain irrational till the time you remain solvent.". Fundamentally, things have not been good - high inflation (causing negative real growth rate), increasing NPAs, weak global factors, stimulus inhlated growth and yet the equity doctors say "All Izzz Well".

There has been too much talk about Indian economy being resiliant to uncertain global factors due to domestic demand but one must forget that it gives a hedge not the license to grow. But the way markets have been moving indicate that Indian economy, alng with few other Asian economies are ready to supercede the global situation. This growth related bubble is dangerous to ride and one might stuck in a situation like what happened in 2008.

Anyways coming back to today';s market, Indian equity markets had a miraclaous run after a gap down opening, due to weak Dow Jones closing below 10000 mark. Finally markets got some support from European markets and finally closing the day 1% up.

Metal and IT Stocks declined but Oil and FMCG stocks gained during the day. Provisional data released by exchanges gave positive bias for markets as Foreign Institutional Investors emerged out as net buyers by around 500 Crores while Domestic Institutions came out as net sellers by around 115 Crores. In the derivatives segment, we have seen no major change happening in futures segment, but in options we have seen some major put writing happening for Nifty 5000 and 5100 Puts.

Technically too, Nifty has made a strong support of 5180-5210 range which will be a difficult level to break in the coming days for bears. The strong resistance for the markets is seen in 5380-5410 range. Thus traders are advised to remain on sidelines till we get close to any of these levels. If markets rise on Thursday, then traders can sell Nifty above 5370 with stop-loss of 5410 and target of 5270. On the downside, one is advised to go long only if Nifty drifts down to 5230 levels with target levels of 5300 and stop-loss of 5170.

Among the stocks, Gujarat Flourchemicals and NMDC remained flat while TCS further declined. One is advised to book profits in TCS if it comes down to 735-740 levels. M&M-Tata Motors recommendation still remains intact... Wow 17 days now... Too much frustuating...

Wishing you a great trading day tomorrow!!!

Global cues may trigger a sell-off in Indian Equities, caution required

2010-06-29T08:22:00.000-07:00

Indian Equity markets had a tough session on Tuesday as it failed to capitalize on the gains made during Monday. Almost every sector fell, the maximum hit is taken by Metal stocks that have fallen between 3-4%. Similarly Infrastructure and Financial stocks fell in the range of 2-3%.

Provisional data released by exchanges indicate bearishness as both Foreign Institutional Investors and Domestic Institutions have been net sellers by 200 and 150 crores respectively. In the derivatives segment too, FIIs have been net sellers by around 2000 Crores in the Index and Stocks futures. In the Options segment as well, FIIs have been net buyers. The call writing of 5300 and 5400 Nifty Strike Prices was also seen which indicate bearish trend.

US markets have opened deep in the red due to Chinese growth and bad data on consumer confidence. It has again gone down below 10000 mark which indicates that it is likely to correct further too. 9840 level should provide key support. If Dow Jones breaks this level, we might see the index heading towards 9200 level.

Technically, Nifty has broken down its key support level of 5280 and closed at 5250. The next strong support level is seen around 5125-5145 levels. Once it breaks then the next support level comes at 5040-5060. On the upside, one may continue to face some resistance in 5360-5390 range.

For tomorrow, Nifty might have a gap down opening around 5160-5180 if Dow Jones closes below 10000. One may sell Nifty futures around 5200-5210 range with stop-loss at 5230 and target levels of 5160. If Dow Jones recovers and close above 10000 then we might see Nifty taking support @ 5200 levels. In such circumstances, one may buy Nifty in 5200-5205 range with stop-loss of 5180 and target levels of 5235.

Among the stocks, TCS sell strategy seems to do well. It is trading below the recommended price of 767. Gujarat Flourochemicals and Max India have declined though still trading above the recommended price. Tata Motors-M&M strategy is still intact... Wow 16 days now...

Wishing you a great trading day tomorrow!!!

Indian Stock Markets likely to make yet another attempt to breach key resistance levels - 29th June 2010

2010-06-28T09:23:00.000-07:00

Indian Stock Markets had a good run on Monday as stocks rallied to wipe out all the losses incurred on Friday. Though on the way up, it has hit the stop-loss levels on "Short Sell" strategy recommended for the day.

Among the sectors, Oil and Gas and Auto sectors did well. Reliance, ONGC were up by more than 1.5% while Tata Motors also made decent gains of more than 2% on the bourses. Though Maruti and Hero Honda ended the day in the negative territory.

Provisional data by FIIs indicate strong buying from Foreign Institutional Investors as they notched up stocks worth 800 Crores during the day. In the derivatives segment, FIIs didn't give major indication as they didn't notched up major buying / selling in the futures segment.

Among the stocks, buy recommendations on both Gujarat Flourochemicals and Max India did well. Tata Motors-M&M pair trade strategy is still active. It has more than 15 days since i have made this recommendation, strangely it is still active. TCS sell strategy seems OK as we are still making profits as of now.

US has made into positive territory in the initial trades and seems likely that it will remain in green during the day. If that happens, we might again see decent gains coming into Indian equities tomorrow. No recommendation for Nifty for tomorrow as markets are currently trading in a no-trend territory.

Wishing you a great trading day tomorrow!!!

Global Cues tough, Indian Euphoria High - 27th June 2010

2010-06-27T07:32:00.000-07:00

As predicted, Indian Stock Markets slid on Friday on the backdrop of negative global cues. Technically too, Indian equity markets are in strong resistance zone and it will take a while before we may see another attempt to break the final wall of resistance.

The global cues during the weekend aren't too good. Three US based banks have been closed / taken over. There have been concerns on the possible impact of Yuan appreciation on Chinese economy. Stocks in Gulf have closed lower on renewed apprehension on global recovery.

Provisional data released by exchanges on Friday gave a subdued picture. Foreign Institutional Investors have been net sellers by around 250 Crores in the Capital Market segment. In Derivatives segment too, FIIs have been net sellers by more than 1000 Crores in the Index and stock futures segments.

All these factors indicate that the coming week might be volatile. We may see a negative to flattish opening on Indian bourses on Monday morning. The traders may adopt "Sell on Rise" strategy on Monday and sell in the range of 5280-5290 with stop-loss @ 5320 and target price of 5225.

Stock-specific one may buy Tulip Telecom in 845-850 range for target price of 920 and stop-loss price of 810. Technically the stock has entered into its support range of 840-860 and with corporate action for Split coming on 6th July, we might see a spurt in the stock anytime soon.

Another stock that traders may fancy is Hero Honda. The stock has a strong resistance zone of 2060-2090. One may sell the stock in this range with target price of 1920 and stop-loss price of 2125.

The pair-trade strategy for M&M and Tata Motors is still open. TCS Sell strategy is now in profit after languishing in losses for initial few days. Overall things working fine for us :)

Wishing you a great trading day tomorrow!!!

Indian Stock Markets likely to correct amidst tough global cues and strong resistance zone - 24th June 2010

2010-06-23T09:13:00.000-07:00

As predicted, Indian Stock Markets had a volatile session throughout the day. The markets opened weak marginally on the backdrop of weak closing in US bourses and then, remained in negative territory throughout the day. The last one hour saw some buying coming into the Indian markets and markets finally closed the day 0.5% up.

Provisional data released by exchanges indicate consistent buying from Foreign Institutional Investors (FIIs) who have bought stocks worth 250 Crores. Whilst on the other side, Domestic Institutional Investors were net sellers by 800 Crores. In the derivatives segment, FIIs remained cautious with no major buying / selling seen in Futures segment.

US has opened in Red on the backdrop of bad Housing sales numbers. If US closed in red, then we might see some pressure coming into Indian markets tomorrow morning. Since tomorrow is an expiry day, hence we might not see major impact of global cues on Indian markets.

The traders can adopt "Sell on Rise" strategy tomorrow. In a scenario, Nifty has a gap down opening then we might see some support coming in 5290-5300 range. One may sell in 5305-5310 range with stop-loss at 5325 and target of 5280. On the other side if Nifty has a flattish opening, one may sell Nifty in 5340-5350 range with target levels of 5315-5320 levels and stop-loss of 5365.

Today was not a good day for our strategy. Nifty hit its stop-loss and so do Maruti, but this is a part of traders' life and hence failures and success are nothing but two sides of the same coin. Two stocks that look good technically at the moment are Max India and NMDC.

Max India can be bought in 160-163 range with stop-loss of 147 and target price of 175. NMDC can be bought in 255-260 range with stop-loss at 245 and target price of 290. NMDC has corrected quite a bit in last few months and seems a good stock to buy at the moment.

Wishing you a great trading day tomorrow!!!

Indian markets likely to trade within a range, volatility may increase near to expiry - 23rd June 2010

2010-06-22T17:13:00.000-07:00

Indian Equity Markets gave up some of its early week gains as renewed concerns on European financial system surfaced and downgrading by Fitch of Spanish banks also put further pressure on Asian markets. European markets also opened in red in the afternoon which put further pressure on the Indian stock markets. Finally, Indian benchmark indices closed in red by around 0.8%.

Provisional data though, gave somewhat different picture. Foreign Institutional Investors came out as net buyers by around 800 Crores while Domestic Institutional Investors were net sellers by around 200 Crores. In the derivatives market, the volumes generated by FIIs were tremendous (around double of usual day's trading) and were net sellers in index and stock futures segment by around 800 Crores. Thus it seems that FIIs have been hedging their stocks portfolio by taking a reverse position in the derivatives market.

Dow Jones closed down 1.5% overnight on renewed concerns about housing sales dropped by 2% m-o-m which was more than expected. Also S&P downgrading of BNP Paribas bank also put pressure on US stock markets. The weak closing in US will ensure weak opening for Asian markets when they open today morning.

Nifty is likely to open below 5300 today. One may adopt "Sell on Rise" strategy for today's trading and sell Nifty around 5300 mark (5290-5300) with strict stop-loss of 5320 and target levels of 5255. As it's an expiry week, hence one is advised to follow target levels and stop-loss levels strictly. The traders who have taken sell positions yesterday, may book profits in the gap down opening.

Amongst the stocks, Maruti and TCS have already been recommended for Sell. The short to medium term investors may buy Gujarat Flourochemicals. It's an INOX group company with interests in flouro chemicals and renewable source of energy. The company also trades in Carbon credits. One may enter into this stock in 150-155 range with stop-loss maintained at 140 and target price of 170-175.

Wishing you a great trading day today!!!

Chinese intruded into bear territory, retailiation likely - 22nd June 2010

2010-06-21T10:10:00.000-07:00

Chinese have the bad habit to play the spoilsport. Indian benchmark indices were sitting amidst the strong resistance zone and set to go correct a bit, but just a statement regarding their currency and vhroommmm... Markets broke all the resistance zones at one go.

Though it didn't hurt us much. Nifty hit the stop-loss right on the opening tick giving us the loss of 3300 Rs per lot. But Kotak Bank-SBI pair trade strategy proved to be a jackpot for us where it gave us profit of 23000 Rs per pair. Tata Motors-M&M strategy is not giving us much profit at the moment.

Anyways, lets come back to Indian Equity markets. Chinese assurance of Yuan appreciation against dollar was welcomed by the equity markets worldwide. Hang Seng closed 3% up, Indian equity markets went up by 1.72%, Europe is up 1% and Dow Jones has also opened 1% up.

Provisional data released by exchanges also gives a positive impression. Foreign Institutional Investors have emerged as net buyers by 1500 Crores. In the derivatives segment too, FIIs have been net buyers in Index and Stocks Futures.

Technically too, Indian stock markets have crossed a major hurdle and now 5280-5300 act as a strong support level for Nifty. Further down, 5190 acts as a major support level. On the upside, Nifty now is likely to face strong resistance in 5380-5440 range. It is likely probability that Indian markets may ovecome this hurdle slowly and steadily and hence, traders may fancy chances to sell Nifty around 5400 levels with stop-loss of 5440 and target price of 5310.

Among stocks, one may sell Maruti futures in 1375-1380 range with a stop-loss of 1410 and target price of 1330.

Wishing you a great trading day tomorrow!!!

Indian economy in jinx - IIP gives optimism but inflation brings concern - 21st June 2010

2010-06-20T07:51:00.000-07:00

After continouos rise for seven consecutive trading sessions, Indian equity markets took breather on Friday, closing down around 0.20%. After a lacklustre May where FIIs pumped out around 12000 Crores, it has been good month so far. FIIs have put in back around 3000 Crores back into the Indian markets. With European zone showing some stability we might expect some more inflows coming into the Indian Equity markets.

Though the current levels might not encourage the foreign institutions to put new money into the markets. Hence we might see some range bound markets for a while now. There are few more concerns that might discourage buying at the current levels. Another one is RBI Monetary policy review due for 27th June. With Inflation figures above 10% for three consecutive months, we might see some tightening done by the central bank before / on the policy review meet. Slow down in Europe is likely to impact Information Technology stocks which have major weightage in both Sensex and Nifty Indices. Any tightening by RBI will also increase the funding costs for the companies and hence might lower down the profit margins for various companies.

Technically too, Nifty is standing at strong resistance levels. Existing short traders can continue to hold the position till Nifty breaches 5310 levels with target level of 5190.

TCS sell strategy is giving losses of around 2%. M&M-Tata Motors pair trade strategy has done well on Friday as M&M went down by 3% while Tata Motors remain flat. Currently it is giving a profit of 8000 Rs per pair. Kotak Bank and SBI pair trade strategy is in profit overall by around 20000 Rs per pair, albeit there is not much change on Friday.

I am not adding more recommendations as we already have three open positions lying. Nifty is likely to show volatility due to expiry week and hence, we must follow the stop-loss and target levels strictly.

Wishing you a great expiry week!!!!

Buying from FII driving markets up, time to remain cautious - 18th June 2010

2010-06-17T09:43:00.000-07:00

Indian Equity Markets had a good session on Thursday. The trading was laregly muted and flattish, till the late afternoon brought a suprise upward rally. The markets finally closed the day up around 1% each.

Provisional data released by exchanges have been encouraging. Foreign Institutional Investors (FII) have been net buyers by around 500 Crores while Domestic Institutional Investors have been net sellers by around 350 Crores. In the derivatives segment, FIIs have been net buyers by around 300 Crores in futures segment. In the Options segment, we have seen some kind of Call writing happening in the 5300 and 5400 Calls by FIIs.

US markets have opened weak and trading in the negative territory. Gold is trading higher at the moment which indicates that institutions have been hedging their equity and currency related risk by buying Gold in the international markets.

Technically, Nifty is in strong resistance zone of 5280-5310. If Nifty breaches this level successfully then we might see Nifty heading to 5370. On the other side, Nifty has strong support at 5170-5190. Hence, traders are advised to carry foward their short positions in Nifty with target levels of 5190 and Stop loss of 5310.

Recommendation to Sell TCS is giving loss by around 1%. Kotak Bank-SBI pair trade strategy has performed well today as Kotak Bank registered the gains of 1% while SBI fell by 0.5%. Tata Motors-M&M pair trade strategy has done well today, but is in overall losses.

No new recommendation for now as we have already 3 open strategies lying open. Wishing you a great trading day tomorrow!!!

Indian Equity Markets seem sitting on June Expiry High, likely to go down - 16th June 2010

2010-06-16T09:44:00.000-07:00

As on expected lines, Indian stock markets had a volatile session on Wednesday. The markets moved within a range of 1% throughout the day. After a gap up opening of about 0.5% on the back of bullish cues from US markets, the markets immediately retreated to flattish levels and remained hovered within a range. Finally, it closed with gains of 0.2%.

Provisional data though gives bullish undertone. Foreign Institutional Investors have been net buyers by around 800 Crores while Domestic Institutional Investors have been net sellers by around 170 Crores. In the derivatives segment too, FIIs have been net buyers by around 1300 Crores in Futures segment, some kind of Call writing and Put buying was also seen in Nifty Options. Overall it seems that FIIs have been hedging their positions perfectly at the moment and waiting for a particular trend to emerge.

Technically as suggested yesterday, Nifty 5250-5260 range gave an opportunity to adopt "Sell on Rise" strategy. It is likely that Nifty may go down till 5170-5190 range. Stop-loss for the same can be maintained at 5310.

Stock-specific our recommendation to sell TCS is giving us losses at the moment, though stop-loss is still far away. SBI and Kotak Bank pair trade strategy is still intact. M&M and Tata Motors pair trade strategy is giving losses at the moment.

Wishing you a great trading day tomorrow!!

Indian Stock Markets in strong resistance zone, likely to see some correction - 16th June 2010

2010-06-15T09:25:00.000-07:00

Indian Equity Markets went through a consolidation phase on Tuesday as markets moved in a narrow range of 1% throughout the day. The markets remained in a negative zone in first half of the day, but as Europe opens and showed some strength, Indian equity markets too picked up and finally closing the day, up around 0.5% up.

Provisional data released by exchange is encouraging. Foreign Institutional Investors (FIIs) have been net buyers by around 500 Crores while Domestic Investors have been net sellers by around 350 Crores. Derivatives data on the other side indicates some kind of profit booking happening around the current levels.

Technically, Nifty 200 Day moving average and 90 Day Moving average is at 5090 and 5135 levels and chances do exist that we may retrace to 5170-5190 levels in the coming days. Hence, traders are advised to adopt "Sell on Rise" strategy. One may sell Nifty in 5250-5260 range with target price of 5180-5190 and stop-loss of 5310.

Stock-specific TCS has come down. our pair-trade strategy of Kotak Bank-SBI and M&M-Tata Motors remain intact and doing well.

Dow Jones has opened in green which may help Indian markets have a gap up opening and hence, give us chance of "sell futures" as suggested above.

Wishing you a great trading day tomorrow!!

Indian Equity Markets in bullish mood, but in the middle of resistance zone - 15th June 2010

2010-06-14T08:59:00.000-07:00

Indian Equity Markets had a faboulous start of the week. The benchmark indices Nifty and Sensex had a gap up opening in the morning and capitalized on the gains throughout the day. It finally closed the day up by 1.50%. Target levels suggested by us on Nifty last week has reached its target level of 5200.

Provisional data by exchanges data is encouraging for the day. Foreign Institutional Investors (FIIs) were net buyers by around 400 Crores in Capital Market segment, while in derivatives segment, FIIs were net buyers by around 500 Crores in the futures segment.

Dow Jones has also opened in a positive territory on encouraging data from Europe. Asian markets are likely to take Europe data encouraging and we may see another gap up opening tomorrow. Though Nifty is now in a resistance zone and tomorrow's gap up opening can be seen as a perfect opportunity to take "Sell on Rise" strategy. The traders can sell Nifty at 5240-5260 levels with target price of 5175 and stop-loss can be maintained at 5310.

Our pair trade strategies for Kotak Bank and SBI is giving good gains at the moment, though, it has not reached its concluded levels. The other pair trade strategy for Tata Motors and M&M has not performed, but I am quite hopeful that M&M can see correction coming in soon.

Wishing you a great trading day tomorrow!!!

Nifty may consolidate at current levels, short term outlook bullish - 13th June 2010

2010-06-13T09:22:00.000-07:00

The last week has been good for Indian Stock Markets where markets have gained almost 1%. It has been third consecutive weekly gains for the markets which will give confidence to the bulls. BSE Sensex has closed above the psycological levels of 17000 which will provide good technical support to the Indian markets.

Provisional data for Friday indicate net buying from Foreign Institutional Investors (FIIs) in tune of Rs. 800 crores. In Derivatives segment too, FIIs have been net buyers in Index and Stock Futures by around 1500 Crores which will further give heart to bulls and sleepless night to bears.

Technically, Nifty is able to breach 5100 levels comfortably on Friday and hence now, 5070-5100 now acts as a strong support zone. Its the fourth time in last 3 months that Nifty has breached this level. Last three times, it breached this zone and then again went down. On Friday as well, we have seen some selling coming in 5150 levels but Nifty is still able to hold 5100 levels.

Traders who are planning to take fresh positions in Nifty may buy Nifty futures in 5100-5110 levels with stop-loss @ 5140 and Stop-loss at 5180. Though the opportunity has equal risk and reward but the risk seems less in trading perspective as Nifty has breached 5060 levels on strong volumes and hence coming back down to these levels seem unlikely during the short term.

We have yet another pair-trade strategy for you. Mahindra & Mahindra has been doing pretty well and has gained more than 15% since stock-split two months back and now likely to face strong resistance. On the other side, Tata Motors has declined by around 5% in last 3 months. Hence, one may can now sell 2 lots of M&M and buy 1 lot of Tata Motors with an anticipation that gap between them now likely to reduce. One may take this position at the current levels and come out of the position in the following cases:

Tata Motors reaches 815 on the upside / goes below 715 on the downside.
M&M reaches 650 on the upside / goes below 565 on the downside.

Wishing you a great trading week ahead!!!

Indian Stock Markets sailing towards 1 month high, likely to face resistance - 11th June 2010

2010-06-10T10:30:00.000-07:00

Indian equity markets had a good run on Thursday supported by good economic data from various Asian economies and technical support coming in Euro currency against other currencies. The day started flat for the Asian markets due to weak US markets on Wednesday. As day progressed, equity markets worldwide picked up after announcements of strong economic data from Japan and China. Indian benchmark indices - Sensex and Nifty finally closed the day with the gains of 1.5%.

Provisional data released by exchanges indicate net buying from Foreign Institutional Investors (FIIs) by around 200 Crores while Domestic Institutional Investors made net sell of 100 Crores. Derivatives data indicate buying coming into Index Calls and futures which forms a base of 5000 for the markets, atleast for this expiry.

Technically Nifty is able to give a breakout from resistance zone of 5060-5080, though it is quite close to that zone. If Nifty manages to stay above this level tomorrow then we could see markets heading to 5180 levels for sure.

Dow Jones is currently trading 1.5% up and chances are bright that we might see a gap up opening tomorrow. Traders who are willing to take fresh positions are advised to wait and resort to "Sell on rise" strategy at around 5180-5190 levels with target price of 5100 and stop-loss of 5250. On the contrary if Nifty goes below 5060, one may buy Nifty with target price of 5180 and stop-loss can be placed at 4985. Traders who already hold a long position can place the stop-loss at 5020.

Stock-specific Cipla and Maruti have touched their target prices of 330 and 1330 respectively. Information Technology stocks are looking weak and hence, one is advised to sell TCS on tomorrow's rise. One may sell TCS at 765 with a target price of 720 and stop-loss of 805.

Wishing you a great trading day tomorrow!!

Nifty in narrow range - support 4960 resistance 5060 - 10th June 2010

2010-06-09T17:21:00.000-07:00

Indian Stock Markets had a lacklustre session on Wednesday as markets failed to retain the gains made in the first half of the trading session and finally closing the day almost flat. Nifty which made the high of 5050 during mid session closed the day at 5000, virtualy giving up all the gains.

Provisional data indicate net selling by Foreign Institutional Investors (FIIs) by around 250 Crores while Domestic Institutional Investors made net purchases of Rs. 150 Crores. In the derivatives segment, FIIs seem to cover up few short positions as they made net purchases by around 500 Crores in the Index and Stock Futures segment.

Overnight Dow Jones has closed in negative territory, as probe in BP Oil Spill starts. It seems Dow Jones weak closing might not impact the Indian equity markets much, but technically, markets are looking to trade in a narrow range between 4950-5080 range. 200 day moving average stands at 5000 which brings support while 30 day moving average stands at 5050 which brings resistance. Awesome Oscillator too is giving a breakout only above 5060.

Thus, traders who plan to take fresh positions may wait for a while. In case Nifty breaks 5080 on the upside, one may take buy position in the markets with a target of 5200 and stop-loss of 5020. Similarly, if Nifty breaks 4940 on the downside, one may take sell position in Nifty with target price of 4750-4800 and Stop-loss of 5005.

Our pair trade strategy of Kotak-SBI is still giving us gains. One may retain this position and only come out on the levels as discussed earlier. Cipla is still hovering close to its target price of 330.

Wishing you a great trading day today!!

Nifty hold support levels but concerns remain strong - 09th June 2010

2010-06-08T09:18:00.000-07:00

As discussed in the yesterday's post, Indian Stock Markets had a tough trading session today, finally closing the day down by around 1%. Nifty found good support in the range discussed yesterday (between 4960-4980) and closed the day @ 4987. This particular suppot range is quite critical for the Indian markets as it will confirm the higher-highs and higher-lows trend built after the last correction to 4800.

Provisional data released by exchanges indicate selling by Foreign Institutional Investors by around 200 Crores. In the derivatives segment too, FIIs have been net sellers of Index and Stock Futures. In the Options segment, FIIs have been net buyers. The Put prices for Nifty indicate some buying coming in there, hence indicating further downside.

US has finally come in green after Bernake's positive comments on US economy, currently trading up around half-a-percent. It is critical that Dow Jones finds some support at around current levels, else we might see another round of steep correction in the markets which may take Dow Jones down to 9200-9300 levels.

Technically, Nifty is also trading in a support zone of 4940-4980. If Nifty breaches 4940 on the downside then we might see some some sharp selling coming into Indian markets which may take it to 4750-4800 levels. Whilst if it finds some support around the current levels, then we might see some resistance coming in 5060-5100 range.

The traders who have taken long position today can continue to hold it till Nifty breaches 4935 on the downside. The target on the upside can be placed at 5100 where it might face some strong resistance.

Kotak Bank- SBI pair trade strategy has given up some of its gains today, but still in positive zone. One may continue to hold the position till the levels breached. These levels have been discussed in Friday's post.

Wishing you a great trading day tomorrow!!!

Nifty back to support zone - 08th June 2010

2010-06-07T17:26:00.000-07:00

As everyone expected, equities worldwide tumbled on Monday, fearing that Europe crisis could lead to double-dip in the equities market. The equities in Asia fell in the range of 2-4%, the commodities and financial stocks bearing the maximum brunt, LME is at eight months low.

The timings of European crisis were worse for Europe and US. Just when things were slowly building up and various economic indicators started giving positive signals, the European crisis occurred which has taken back up all the gains that US / European markets have made in this year.

Indian stocks, though has been doing pretty good, is likely to face another test of FII outflow. Though I have a feeling that we might not repeat the crash in 2008 as we have been able to show resilliance and tremendous comeback during the previous crash. Hence, any major correction can be taken as good opportunity to buy stocks.

Provisional data released by exchanges yesterday have been dismal by all means. Both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) have been net sellers in Capital Market by around 400 and 200 Crores respectively. In Derivatives segment, FIIs have been net sellers of more than 1500 Crores in Index futures which agains gives negative cues to the markets.

US markets overnight have closed 1% down, now close to 9800 levels and hence, we may once again see a gap-down opening today morning in Indian markets. Technically, Nifty is likely to face good support at 4960-4980 range, where one may buy the Index futures. The stop-loss can be maintained if Nifty goes below 4920 while target price can be maintained at 5100. Dow Jones is also now in its support zone of 9600-9800 and if it makes any intermediate recovery from these levels would surely help Indian stock markets in recovering some of their losses.

The pair-trade recommended yesterday (Kotak Buy and SBI Sell) has given some wonderful results. In the midst of negative bias, Kotak Bank has closed positive yesterday while SBI has fallen by 2.5%. One may retain the strategy and come out on the levels mentioned in the yesterday's post.

Wishing you a great trading day today!!!

Equities set for another roller-coaster ride - 06th June 2010

2010-06-06T08:41:00.000-07:00

Friday has brought mixed news for Indian Stock Markets. Whilst on one side, Indian benchmark indices were able to close above strong psycological levels while on the other side US markets crash (Dow Jones below 10000 is really scary) on the back of employment data and Hungary crisis has brought worries of another meltdown.

Technically, Nifty has been making higher lows and higher highs after May crash to 4800 and this trend is breached only if Nifty closes below 4960. Another support level for Nifty stands at 5050-5070 range. If Nifty is able to close tomorrow around these levels, then there will be a strong chance that Nifty can again revive its upward journey which may take Nifty to 5200.

Hence the traders are advised to buy Nifty futures if it trades around 4995-5005 range on a gap down opening with stop-loss of 4950 and target price of 5170. On the other side, if Nifty goes below 4930, one may sell Nifty futures with stop-loss of 5010 and target price of 4830.

After Maruti-Hero Honda successul pair strategy, another one for you. One may buy Kotak Bank futures and sell SBI futures tomorrow morning. One may book profit / loss in this strategy in the following circumstances:

SBI goes above 2420 or goes below 2220.
Kotak Bank goes above 800 or goes below 695.

Wishing you a great trading day tomorrow!!!

Outlook still cautious on equities amidst short term reversal - 04th June 2010

2010-06-03T17:20:00.000-07:00

Indian Stock Markets had a good day on Thursday, clocking the gains of 2%. Thursday were one of the days when markets didn't show any signs of weakness and right from the opening bell till closing, traded strongly.

In yesterday's post, we discussed that there is high probability that Nifty can break its crucial resistance zone of 5060-5090. Nifty broke this zone and closed the day at 5110. Meanwhile, it has also breached the target level of 5115 discussed yesterday.

Provisional data provided by exchange gives a positive sign. Foreign Institutional Investors have been net buyers by around 500 Crores Rs while DIIs too joined the party by making net purchases of around 100 Crores. In Derivatives segment too, FIIs have made net purchases of approx 2000 Crores in Index futures, which indicates some kind of support formation @ 5000-5050 levels.

US markets closed flat overnight and we might see flattish kind of opening on Indian bourses. On the upside, Nifty is likely to face some resistance in 5030-5050 range, albeit any correction coming in these levels can be used to take buy position in Nifty. One may take buy position in Nifty June Futures @ 5060-5080 levels with target price of 5180 and stop-loss can be maintained at 5005. Stock-specific, one may book profits in Maruti in 1320-1330 range.

Wishing you a great trading day today!!

Renewed attempt to break crucial resistance zone, but fundamental concerns remain strong - 02nd June 2010

2010-06-02T08:53:00.001-07:00

Indian Stock Markets had a volatile trading session today as it gyrated violently within a range. Throughout the day, Nifty traded in a range of 4950-4995. Only during the last half-an-hour, the market broken loose the range on the upside and closed the day at 5019, up by 1%.

Among the sectors, Telecom sector had a good day, with various experts talked about consolidation happening in the sector soon. Also, RCOM renegotiation with MTN flared the stock and it closed the day up 11%. Auto sector also did well after monthly sales report indicate decent growth trend in sales - best ever for Hero Honda and Maruti Suzuki.

Technically, the stock is managed to float above 200 day moving average but it is still trading below 30 days and 90 days simple moving average, which indicates bearish trend for the short term. Awesome Osciallator indicator is also giving a bearish signal. Provisional data released by exchanges give subdued picture as FIIs remain net sellers by 165 crores while DIIs have been net buyers by the same amount.

Though the encouraging sign is that Nifty is again closing in to the crucial resistance zone of 5060-5090. With US markets opened up on decent note (up 1%), chances of re-testing of 5060-5090 resistance zone is high. If it happens, then this will be its third attempt in last 2 weeks and probability of breaking this zone is higher this time. Thus, one may buy Nifty futures if it manages to break 5055 on the upside with stop loss of 4990 and target price of 5115. On the flip side, one may sell Nifty if it falls back to 4950 levels, with target of 4860 and stop-loss of 5015.

Stock specific, one may sell Hero Honda in 2005-2020 range with target price of 1850 and stop-loss of 2060. Technical indicators are giving strong buy signals but psycological levels of 2000 and strong correction from those levels 2 months back can give some heart to the traders. Cipla recommendation still remains intact.

Wishing you a great trading day tomorrow!!!

Will next move bring surprise or panic in Indian Stock Markets - Wait and Watch - 2nd June 2010

2010-06-01T10:08:00.000-07:00

Indian Stock Markets did just what was feared. After having a gap down opening, Nifty tried to consolidate in 5030-5050 range, but weak opening in European markets triggered the alarm button and markets slid down steeply. Finally, it closed the day @ 4970 - a fall of 116 points.

The provisional data released by exchanges also give a dismal picture. Foreign Institutional Investors have been net sellers by around 550 crores while Domestic Institutions have been net buyers by around 200 Crores. In derivatives segment too, FIIs have been net sellers in futures contracts by around 1400 Crores. This data indicates growing concern among global investors on valuation front and whether the given growth trajectory is likely to be maintained in future or not.

Technically too, as we discussed yesterday, were giving negative signals. Now the markets have fallen steeply, one need to be cautious around the current levels as markets may pick any direction. Traders are advised to sell Nifty, if it breaches 4915 on the downside with stop-loss @ 4980 and target price of 4830. On the other side, one may buy Nifty if it breaches 5040 on the upside with stop-loss of 4990 and target price of 5115. Traders are advised not to take any fresh position in 4920-5040 range as markets may consolidate in this range and pick any direction.

Our pair trade of buying Maruti Suzuki and selling Hero Honda futures have given handsome returns today itself. At one point of time, Maruti was trading at 1290 (Buy Price - 1240) while Hero Honda trading at 1935 (Selling Price - 1940) thus giving consolidated returns of 11000 Rs per lot. One may continue to hold this pair trade with trigger prices mentioned in the previous post.

Cipla still seems a good buy at the current levels as it is able to create a base in 312-316 range. It is likely to touch 330 in the near term. One may enter into stock at around current levels with Stop-loss of 314 and target price of 330.

Wishing you a great trading day tomorrow!!!

Indian equity markets in strong resistance zone, fall likely - 01st June 2010

2010-05-31T09:30:00.000-07:00

As we discussed yesterday, Indian Stock Markets remained in a range-bound session throughout the day, albeit it closed the day with a positive bias. Provisional data released by exchanges also gave a positive cue as FIIs have been net buyers by around 600 Crores during the day, while DIIs remained almost unbiased with net sell of around 70 Crores.

But traders need to be cautious at the current levels. If we closely analyze the charts for this year, Nifty has has been hovering around 200 days moving average, but trading below 30 days moving average. RSI has also moved above 50 (closing on over-bought zone) and Awesome Oscillator indicator is also giving negative signals.

Cumulatively, traders can adopt "Sell on Rise" for next few trading sessions. One may sell Nifty June Futures in 5060-5080 range with stop-loss maintained at 5115 and target price of 4980.

Stock specific, one may adopt pair trade by buying Maruti Suzuki futures and selling Hero Honda Futures. Maruti Suzuki share, after sliding in last few months, is trying to build base in 1170-1200 range and has bounced back twice from those levels. Hero Honda on the other side has reached strong resistance zone of 1950-2000 range. One may book the profit / loss in the pair trade under the following cases:

1) Maruti touches 1325 on the upside or 1150 on the downside. (Current Market Price - 1240, lot size - 200)
2) Hero Honda touches 1830 on the downside or 2030 on the upside ( Current Market Price - 1940, lot size - 200).

Wishing you a great trading day tomorrow!!!

Indian Stock Markets lack direction as mixture of positive and negative cues emerge - 31st May 2010

2010-05-30T11:23:00.001-07:00

Indian Stock Markets had a good trading session on Friday. After taking positive cues from US markets overnight, benchmark indices had a gap up opening. The market consolidate throughout the day then and finally closed the day at the crucial levels. Nifty is sitting right at the top of its crucial resistance level of 5066 where it is likely to face a stiff resistance, especially in the backdrop of weak US markets and downgrading of Spain sovereign debt ratings.

Provisional data though for FIIs have given a positive cue. FIIs after being net sellers for last few days have finally become net buyers on Friday. As per provisional data released by exchanges, FIIs were net buyers by around 400 crores while Domestic Institutional Investors (DII) have been net buyers by around 350 Crores.

Stock specific, commodities space has done really well. Sterlite Industries recommended on 24th May has closed above its target price of 680. Maruti is also looking good and now making a nice support level in 1150-1200 price range.

One thing which is worth mentioning is the discount in Nifty Futures (-30 pts) which is quite significant. Albeit, the provisional data for FIIs indicate a different picture all around as it indicates a net buying of about 900 Crores in Index Futures. Thus, it seems that domestic institutions and traders are bearish about the markets in the near term while FIIs are anticipating rebound in Indian equity markets.

Technically, Nifty is now standing at the crucial resistance range of 5070-5105. We need to have a closer look at the trading range in next 3-4 days. For Nifty June, 4970- 5000 range is a strong support level. Tomorrow markets are likely to open weak and Nifty may have a gap down opening by 1-1.5% which will directly take Nifty to this support zone. In such a scenario, one may buy Nifty June futures with Stop-loss of 4940 and target price of 5040. Similarly on the upside, one may sell Nifty June Futures in the range of 5060-5080 with Stop-loss of 5115 and target price of 4980. Traders are advised not to take any position in the range between 5000-5050 as markets can take either direction in such case.

Options traders may opt for Bull spread by buying 5000 Nifty Call and Selling 5100 Call and 5300 Call. The strategy can give you gains if markets stay above 5000 or will lead to limited / no loss if Nifty stays below 5000. Though in this case one may ensure to square-off the position if Nifty goes above 5360 levels.

Wishing you a great trading day tomorrow!!!

From Support zone, Indian stock markets head to Resistance Zone - 28th May 2010

2010-05-27T17:33:00.000-07:00

As cricketing experts say that "T20-T20 match is the game of momentum. The team that picks up the momentum is likely to win the match.". The analogy can be seen in stock markets as well. Two days back when markets were correcting, every expert on TV talked about further downtrend in the market. Various broking houses had suggested further fall of 10-15% in the markets. Now when markets have made a strong comeback, these voices have been toned down and few have now changed their stances, citing robust Indian economy as evergreen excuse :)

Though fundamentally, nothing much has changed for the equity markets. Indian economy will surely feel the heat of a slowdown in European economy. We also need to take care of infation levels which are too high, thus, probaibility of an Interest rate hike is high. The stocks are trading at high valuations which limit the further upside in the markets.

Technically too we are entering into strong resistance zone that starts from 5070 to 5300. In this resistance zone, there are several levels that will be difficult to break and hence, major upside from the current levels will surely be a slow and tedious task for the markets.

US financial markets have closed with 3% upside overnight and this will surely have a hangover effect on the Asian bourses. In India, we might see a gap-up opening after which we might see some consolidation happening in 5030-5070 levels (for Nifty). The first level of resistance can come in 5070-5105 levels. Once this is breached, the next level to watch out for is 5170-5200 which seems a big resistance zone.

Thus traders can adopt "Sell on Rise" strategy till Nifty breaches 5200 levels on the upside. On the downside, Nifty may find a support at 4930-4950. If this level is breached, then we might see markets heading to 4800 levels again.

June series are expected to be volatile as markets may try to find some direction for itself. Those who want to take a bit of risk may sell both Nifty 5100 Call and Nifty 4900 Put. This will give you premium of around 200 Rs. One may keep stop-loss for the strategy at 5325 on the upside and 4690 on the downside. One may book profits in it when combined premium for the strategy reduces to 80 Rs.

Wishing you a great trading day!!!

Is correction over???? - 27th May 2010

2010-05-26T07:55:00.000-07:00

The most fascinating thing about financial markets have been the uncertainity. I completed my yesterday's post at around 12:00 A.M IST and Dow Jones at that time was trading 200 points down. By the time Dow closed after two hours (at 2:00 A.M IST), it was almost flat. It has spoilt my strategy built for the day :(

Anyways, bounce back in US markets from below 10000 gave instant shot of bullishness to the world financial markets today. Indian equity markets had a gap up opening today and gained strength during afternoon once Europe too had a gap up opening by around 2-3%. Finally, Indian bourses closed the day up by around 2.5%.

Commodities specific stocks regained some of the lost ground today. SAIL, Hindalco, Sterlite Industries were up 5-7% each while financial stocks like IDFC, and ICICI Bank too had a good day today, gaining around 2-4%.

Today's gain seems more of a short-covering on the backdrop of immense selling seen in the last few days. Provisional data also indicate lack of fresh buying by Foreign Institutional Investors (FII). According to provisional data, FII have been net-sellers by around 200 crores while Domestic Institutional Investors have bought equities worth 70 crores. This data is not encouraging, especially on the day when bourses were up by 2.5%.

Hence, the traders can adopt "Sell-on-rise" strategy, but close to 5000 levels for Nifty. The traders can sell Nifty June futures in 4970-4980 levels with stop-loss of 5070-5080 and target of 4750. Since tomorrow is expiry day, we might see fresh short positions being created, especially during afternoon session. Hence day traders can sell Nifty May around 1:00 P.M (when European markets open) with stop-loss of 1% from those levels.

Among the stocks, one may buy NIIT Technologies @ 182-185 levels with target price of 207 and stop-loss of 168. The stock fundamentally has been quite a performer in last few quarters, clocking Net Profit Margin of 23-25% which is quite good.

I would like to share one note of experience. If there arises a problem that put every country's economy into danger, then we can sit back and relax, because chances are bright that some way out will be found to tackle the same. In 2008 when global economy came into recession, every major country swung into action and took collaborative action to prevent the same and restore the confidence. Now if Europe issue balloons into a global problem, then one may take risk and invest into Indian stocks because chances are bright that some solution will be found... But.. Only if it derails every economy including USA.

As of now, European issue seemed not putting US economy into danger as various data including Employment, Retail Sales, Housing has shown an encouraging trend. Let's see how coming days / months pan out for Europe and rest of the world... Keep an eye on it...

Wishing you a great day tomorrow as It's TIME TO SAY GOOD BYE TO MAY SERIES!!!!

Panic spooked the Indian bourses, though support zone acts as a cushion - 26th May 2010

2010-05-25T11:35:00.000-07:00

If Monday was full of enthusiasm on account of Reliance patch up, then Tuesday was just the opposite. Overnight weak closing in US markets triggered a gap down openings for Indian bourses. The weakness persisted throughout the day and accentuated during afternoon when Europe opened about 2-3% down. Finally, the benchmark Indices - Nifty and Sensex closed the day, down by around 3%.

The opening on US markets is not good either. Dow Jones has already breached 10000 mark and is trading around 9900 levels. If this weakeness persisted till closing, then we are likely to see a major gap down opening in the Indian and other Asian markets tomorrow, as 10000 levels for Dow Jones was crucial to maintain.

In our yesterday's discussion, we talked about major fall in Nifty to 4770 if it breaches 4870. We had just seen the exact happening today with Nifty June contract making a day's low of 4765 before briefly rebounding to 4790. Technically though, we are sitting on the broader support band for Nifty between 4600-4800. Tomorrow possible gap down opening may push Nifty down to 4700 levels during early trades, but one must maintain caution and do not attempt to buy / sell Nifty at those levels. One must take 4700 levels on Nifty to evaluate the strength of the market. If Nifty manages to stay afloat 4680-4710 levels with consistent rebounds, then we may Nifty rebounding to 4850 levels. On the contrary if Nifty breaches 4680 and sustains there for half-an-hour or more, then fresh sell positions on Nifty can be taken with stop-loss of 4725 and target price of 4620.

Options traders can sell both Nifty 4700 Call and 4700 Put and buy 4500 Put to hedge the position. This strategy will come into losses if Nifty crosses 5050 levels. This level can be taken as stop-loss for the strategy. On the downside, the maximum profit if Nifty retains between 4700 and 4500.

There are two stocks that really look interesting at the moment are DCHL and NDTV. Both the stocks have corrected quite a bit in last few days and it is likely to give a small rebound in the coming days. DCHL has already entered its strong support zone of 105-120. One may buy this stock with stop-loss of 102 and target price of 140.

NDTV too looked strong at the current levels. The stock has corrected quite a bit in last few days and now likely to see some rebound in the coming days. One may buy this stock in 93-98 Rs range with stop-loss of 86 and target price of 115.

Wishing you a great trading day tomorrow!!! Shaba Kher..

Short covering RIL-ADAG patchup not able to take Indian stock markets up - 25th May 2010

2010-05-24T09:49:00.000-07:00

Sunday brought a much suprised good news for Indian economy in a form of patch up stitched between two warring brothers and owners of two major business houses of the country- Reliance Industries and Anil Dhirubhai Ambani Group (ADAG).

Indian stock markets too reacted positively to the development and had a gap-up opening of about 1.5% each. The markets further made their way up and at one time Nifty was trading above 5000 mark which gave hope to the participants of a consolidation around those levels. But with soft opening in European bourses, markets started loosing its ground and finally closing the day at 4943.

The provisional data released by exchanges indicate selling of around 1000 crores by FIIs, though, it is ably supported by a buy of around 1100 crores by Domestic Institutional Investors (DIIs). It should be noted that FIIs have already sold equities worth 11000 crores in the month of May, which should be a concern for the Indian stock markets.

Another positive factor that might have drived the markets up was "Short-covering". The markets have lost almost 7-8% in this month and it was widely expected that some of the short positions in May series will be covered which can help Nifty move beyong 5000 levels. The initial part of the day saw some of the shorts being covered, but Europe soft opening triggered the fresh round of short positions created in the markets. Though, there are certain indications of short covering happening around 4930-4950 range, which should act as mild support for the markets.

US markets have opened up soft and European markets too have been trading in a narrow range. If the trend persists, we might see a flattish kind of opening for the markets. 4870-4890 should act as a good support level for the Nifty. On the upper side, 5030-5050 acts as a strong resistance. For tomorrow, traders should maintain caution and wait on the sidelines till markets take a definite trend.

If Nifty able to breach 4870 levels on the downside, then traders can open short positions with stop-loss of 4925 and target of 4770. Whilst if Nifty goes up and breaches 5030 on the upside, one may sell Nifty with Stop-loss at 5080 and target price of 4925.

No stock-specific recommendations for now. The previous recommendations for Maruti, Sterlite and Cipla remain intact.

Before we close the article, a note of caution. Many a times we try to do bottom fishing especially during times when markets seem weak and suddenly we see markets rebounding and we end up with nothing in our hands. By now we all know that markets are weak. Almost every analyst is giving bolder levels on the downside. JM Financial has even talked about Nifty @ 4100 in the medium term. But the fact remains is "nobody knows it". Hence, it is advised to pick good quality stocks at every correction.

Another piece of statistics before I close the article. In last one year Dow Jones has actually outperformed Sensex by around 10%. Seems strange!!!! Yes... But its true....

Wishing you a great trading day tomorrow!!! Good night...

Short covering likely to drive Indian equity markets up, but caution advised at higher levels - 24th May 2010

2010-05-23T01:22:00.000-07:00

As we have been discussing for last two days, Indian Stock Markets have rebounded strongly from their support levels (Nifty: 4850) on Friday. From its lows of 4840, Nifty rebounded strongly to reach the target of 4925 comfortably and closing the day @4931.

Overnight closing on Dow Jones has been good and we may expect Indian Stock Markets to open at decent note on Monday morning. As it is expiry week, hence it is likely that we might see some degree of short covering coming into the markets which may take Nifty close to 5000 levels, where we may see some fresh short positions built in again. The important resistance levels come at 503-5070 range. If this range if breached on closing basis, we may see Nifty going till 5200. But the probability of this happening is unlikely as global factors are still competitive.

Fundamentally also the recession in Europe will likely to affect almost every major weight in Nifty, thus, valuations may not justify too much upside from the current levels.

Thus, it is advised that traders may go long on Nifty within the range 4920-4950 with a target level of 5040-5060 and stop-loss can be placed at 4870. Once Nifty breaches 5040, one may switch to "sell on rise" strategy where one may sell Nifty in 5040-5060 range with stop-loss at 5160 and target price of 4750. Hence, the risk-reward ratio becomes really lucrative in "Sell-on-rise" strategy.

We had advised traders to buy Maruti in 1190-1210 range on Wednesday with target of 1350 and stop-loss at 1140. The stock has rebounded strongly from 1170 to close on friday at 1240. Fundamentally also, the stock is currently trading at attractive levels and can be bought from long-term perspective.

Technically, Sterlite Industries has entered the strong support zone from where it is expected to take a short term bounce. One may buy Sterlite Industries in 620-640 range with target price of 680 and stop loss of 605. Similarly, one may buy Cipla in 316-318 range with target price of 330 and stop-loss of 305.

Options traders can sell Nifty 4400 Put and Nifty 5300 Call for June series with stop-loss at 5350 on the upside and 4350 on the downside.

Before I adieu, I would like to remind everyone that atleast Indian Stock Markets is still in structured bull phase. We are not as leverage as we were in 2007 that further accentuate the fall. We have come out better than the others from the grip of recession. Though the support drivers for the markets to go up are still not intact but downside too is limited. Henceforth, one may try to adopt stock specific approach and buy good quality stock during corrections.

Wishing you a great investing day and the coming week!!! Hopefully, we again meet with big smile on our faces.. He ha ha :)

Indian Stock Markets looked weak but entering the strong support zone - 20th May 2010

2010-05-20T08:28:00.000-07:00

It seems yesterday's discussion seems more relevant for today's post. The support level of 4850-4800 on Nifty didn't tested today, but chances are omnious that it will surely be tested tomorrow when markets open. Dow Jones is currently trading more than 2% down (250 pts). If this weakness persists overnight, then we might see ateast 100 points gap down opening and put market in our set support-zone of 4850.

FIIs data doesn't give encouraging picture either. Foreign Institutional Investors have been net sellers of more than 600 Crores while Domestic Institutions were net buyers of Rs. 700 Crores. Amidst the Nifty, Public Oil Production companies like Oil India, ONGC were up by around 8-9% while IGL was down by 5%.

Over a longer term, investors have some good reasons to be cautious. The recession has gripped the European markets and hence, strategies of some Indian companies to move to Eurozone at the time of US recession seem backfired and hence, profitabilties are likely to hit for several front line companies in Nifty and Sensex.

Similarly Asian economies have now been suffering from Inflationary problems which are the offshoots of loose monetary policies adopted by governments during the midst of global recession. Hence, long term investors need to adopt a stock specific approach and try to concentrate on companies that work on domestic theme and away from inflatonary pressures.

One such company is FDC. FDC is a pharmaceutical company that works in the field of Opthalmics and Oral rehydration salts. Electral that we all might have consumed at the time of dehydration is company's flagship product. Besides the company has expanded itself into other areas and pushing its growth plans steadily. The company's exposure to overseas markets is insignificant. The stock is currently trading for Rs. 90 and can be accumulated at around 83-85 Rs (25%), 78-80 Rs (25%) and 70-72 Rs. (50%).

Derivative traders may go long on Nifty around 4825 levels with stop-loss of 4780 and target of 4925. If it breaches 4775 on the downside, one may create fresh short positions with target of 4700 and Stop-loss of 4825.

One may also adopt Pair strategy wherein one may buy Nifty @ 4850 and sell Bank Nifty @ 8980 in te ratio 2:1 i.e., one may buy two lots of Nifty around 4850 and sell one lot of Bank Nifty @ 8980. The target levels for Bank Nifty is 8680 and for Nifty is 4925. If any of these breach, one may close both the positions and book their P/L. On the reverse side, one may close the position if Nifty breaches 4775 on the downside or Bank Nifty reaches 9400 on the upside.

Its a testing time for everyone related to stock market, but one should not drive its money on emotions and rather try to derive their decisions on price and valuations.

Wishing you a great trading day tomorrow!!!!

Amidst the panic, stock markets enter strong support zone - 19th May 2010

2010-05-19T08:43:00.000-07:00

Indian Stock Markets, after a stable gap down opening, slide steeply in the latter half of the day and end the day with losses of more than 3%. Provisional data for today indicates strong selling from FIIs @ 1300 Crores. Among the losers, high beta stocks in Nifty like ICICI bank, Sterlite Industries and Tata Motors have slid more than 7%. JP Associates hit its 52-week low of 120 Rs.

The current level augment that markets are now entering the panic phase now. Till the time, Nifty remained above 5000 levels, there seemed a hope that markets will gradually recover and some buying was seen around 5000-5100 levels. But once these levels have been breached, the only way markets finding themselves going is "DOWN".

Amidst such scenario, whats should a trader do now? If we think rationally, Nifty should find some strong support @ 4800-4850 levels. Till the time, markets remain above 4775, there are strong chances that markets can recover till 4950. Hence, traders can now go long on Nifty tomorrow (if markets have gap-down opening) at around 4850 with Stop-loss of 4775 and target of 4950.

Options traders can play on reverse-straddle tomorrow selling both 4800 Call and Put. This should fetch around Rs. 200. One may keep a stop-loss @ 4600 on downside and 5000 on the upper side.

Amongst the stocks, Maruti @ 1200-1210 levels. The stock is currently at its absolute base of last 9 months and should act as a strong support level. One may keep a stop-loss of 1140 and target price of 1350 on the stock. Fundamentally also, the stock has come to the decent levels.

Anyways, time is surely test the nerves of several traders and chances are ominous that short-sellers may find themselves stuck in no-win situation. So temptation to go short should be resisted as market enters its strong support zone of 4800-4850.

Equity and Options Ideas for 05th October 2009

2009-10-04T08:30:00.000-07:00

The equities markets worldwide are having a good time in the last few months. Though for last few weeks, it has shown some tiredness whenever it attempted to go up to pick the new levels. For instance, Nifty took a while to breach 4750 levels for a month. Similarly, it took some time before it is able to breach 4900 levels. Now at 5080, Nifty could again find difficult to sustain at around 5250 levels.

Fundamentally, no matter how much environment has improved, the health of the global economy is still not so good. All the countries are followin protectionist policies to protect their own economies, their own companies, rate of unemployment, rate of growth and rate of inflation. Amidst such environment, the exchange of trade between countries would be less which will have a negative impact on the global economy.

Similarly no country in the world is ready to play the role of a consumer (like USA) in the world and like to take trade deficit in its stride. Hence, every country is now wooing others to take its product i.e., all have been attempting to become suppliers and nobody is trying to become consumer. Amdist such environment, global economy will prosper, but at a moderate rate of 2-3%. At worse, it may de-accelerate :(

Anyways, lets come back to Indian equity markets. The above discussion was written to tone down the euphorism that the markets have been riding at the moment. My view is that investors should liquidate atleast 20% of its holdings at these levels and stay aside. Even if someone likes to pick the stocks, they can pick defensive stocks for a while like ITC, HUL, Cipla, etc.

The traders can ride on Nifty at the moment as volatility is likely to increase above 5000 levels. One can adopt an Options strategy in which he can take a bull spread by buying one 5100 Nifty Call and sell one 5200 Nifty Call and three 5500 Nifty Calls. This strategy would give maximum profit of around 4000 Rs till Nifty stays between 5100 and 5500.

The stocks that are looking good at the current levels are NIIT Limited and Usha Martin. NIIT Limited after consolidating between 65-70 Rs has broken out the levels. One can buy these levels with a target price of Rs. 90 and one can keep the stop-loss at Rs. 64.

Similarly, Usha Martin has also broken from its consolidation period and can touch Rs. 80 in the near term. One may keep the stop-loss at Rs. 59.

Anyways, wishing you a great week ahead!!!

Equity and Options Ideas for 07th September

2009-09-06T08:46:00.001-07:00

Indian Stock Markets had a quite run during last week. Nifty and Sensex went down around 1.5% each. The markets are again standing at the crucial junctures. For last two months, markets have attempted to breach some critical levels - 4750 for Nifty and 16000 for Sensex, but have failed to do so as of now.

On Friday, markets have again managed to stay close to 4700. US markets closed positive on Friday which will boost markets on Monday. But it is for sure that markets will take some time to breach these levels. One should go long only if Nifty able to close above 4750 for atleast 3 consecutive sessions. The next week will also see IIP data coming for July which can be around 5%. The data can make or break this ongoing momentum developing in the market.

The last week Nifty hit our recommended stop-loss levels at 4590 and bounced back from those levels to close @ 4680. Traders are advised to stay on sidelines on future side, but few Options strategies can be adopted.

A nice strategy that one can adopt is to buy Nifty 4900 Call and Short Nifty 5000 and 5100 Call. The complete set would give maximum profit if Nifty closes between 5000 and 5100. One can close this position by closing Nifty long option if Nifty doesn't cross 4800 in the last week of expiry. Another strategy that one can take is to buy Nifty 4500 Put and Sell 4300 Put and two Nifty 4200 Puts. The strategy would give profits between 4400 and 4200. Similarly, one may square-off Nifty 4500 Call to cover up the losses, if Nifty stays above 4600 during last week of expiry.

On the stocks discussed, all positions remain intact. Few new ideas are given below;

1) Buy Indiabulls for a target of 275 and stop-loss of 174 - FIIs holding has gone up in last quarter which indicates that company might be coming out of woods. One may go long on the stock at the current levels as it has been consolidating at those levels.

2) Buy Indiabulls Real-estate with a target of 325 and stop-loss of 217 - the same reason as given above applies to another Indiabulls company.

3) Buy Onmobile Global with a target of 565 and stop-loss of 465 - the stock after touching the high of 650 meltdown to 510. It has been consolidating at these levels since then and is likely to go up.

Wishing you a great trading week ahead!!

Equity and Options Ideas for 31st August 2009

2009-08-30T07:02:00.000-07:00

As discussed in the previous blog written on 24th August, 2009, the intermediate target for Nifty stands at 4800-4850. The markets have bounced back from 4450-4500 levels twice. On Friday, it has broken the psycological levels of 4700 and now coasting towards 4850.

Foreign Institutional Investors (FII) have again come into buying mode. On friday as well, FIIs were net buyers by about 550 crores. The derivatives data also indicates strong selling coming in in-the-money Nifty Put options. Nifty Calls for 4700, 4800 have also seen some strong buying coming from traders and institutions.

Global markets are also showing strength. Dow Jones has not broken 9400 levels, despite some negative data pertaining to deficit released by US government and Federal Reserve. It may go up till 9750-9800 levels from where it is likely to face stiff resistance.

Among the stocks discussed earlier, Jindal Saw Pipes hit its target price of Rs. 590. Fortis also has hit its target price of 115. CESC is sitting tentatively closing to its target price of 390.

Among the misses, Bank of India and GE Shipping have hit their stop-loss levels around 5% below recommendation price. Both were sell-recommendations made on 21st August.

Among the fresh ideas, Andhra Bank and JK Lakshmi Cements look good. JK Lakshmi is a very good stock that can be picked with a long term perspective. LIC holds more than 5% stake in JK lakshmi cements. The interest coverage is very low for this company which indicates comfortable debt to equity ratio. The intermediate target for the stock is 152 and stop-loss can be placed at 121.

Andhra Bank is trading in a range for last few sessions. Good thing is that it is not falling with higher volumes. Open Interest in the stock is increasing daily which indicates either hedging / speculation by the institutions. Former indicates neutral signal and latter indicates positive signal. The target price for the same stands at 97 and stop-loss at 81.

Next week, traders can go long on Nifty at around 4715-4725 with target levels of 4850 and stop-loss at 4590.

Wishing you a great trading day tomorrow!!!

Equity and Options Ideas for 25th August

2009-08-24T17:04:00.001-07:00

Riding the positive global cues, Indian Equity markets went up by 3% on Monday. Commodities stocks are riding high at the moment in the anticipation of possible global economic recovery.

As discussed in yesterday's blog, markets are likely to rise further in the coming days. Dow Jones is sitting close to 10000 mark where one may see major resistance. Till then, we might not see sellers making any major hurdle for the markets. The rise in US markets would thereby have a positive impact on the Indian markets as well and we may see it crossing some intermediate resistance levels.

Taking Nifty as benchmark, we may see Nifty crossing 4750 resistance levels during the current rally. The next major resistance level that Nifty is likely to face is 4800-4850 which could be the major one before 5000. On the downside, trend reversal can be seen at 4450-4500 levels.

Henceforth, we are sitting almost the middle of this band. Traders can go long on Nifty around 4625-4630 today with a target levels of 4680-4690 and stop-loss can be maintaine at 4580-4590.

US-deficit Date due to release today evening
Today, US economic department and US government are separately releasing the data on possible US deficit in next 10 years and their plans to raise money. US deficit is a major area of concern for the economists and investors worldwide and hence, this data would be watched vey carefully.

If markets stay range-bound today, Buy options traders can use strangle strategy to buy Nifty 4800 September Calls and 4500 Nifty september Puts. Sell-Options traders can short Nifty 4400-September-Puts with a stop-loss of around 30% from the current price levels.

Stocks Ideas
Bharat Forge, which was discussed on Friday, hit its target price of 230 yesterday, giving returns of around 6%. Jindal Saw Pipes is sitting close to its target price of 590. Rest of the stocks ideas remain intact.

No further addition to the stocks ideas as we may see some absurd movement in the stocks before expiry.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 24th August 2009

2009-08-23T17:56:00.000-07:00

Indian Stock Markets had a decent run on Friday, with benchmark indices again standing at the crucial junctures. The markets have been floating in a range bound territory since post-elections. There have been few instances on both upsides and downsides, but none of them have been strong enough to break the loop.

Now, chances of breaking the upside have become strong. Nifty, which is nw again standing in 4500-4600 range, is likely to make a strong attempt to break away the resistance levels of 4650 this week. The strength for the same can be derived from US, where Dow Jones is standing at '09 highs. It will make a stong attempt to break 10000 barrier in next one month and hence, will also give Asian indices a strong push to break their respective psyocological levels.

Henceforth, the traders are advised to go long on Nifty on every dip till it starts hovering around 4800-4850 levels. On the downside, one may maintain the stop-loss of 4350. Nifty is likely to have a gap up opening by around 80-100 points and hence, one may go long around 4590-4615 levels with targets of 4650 and stop-loss at 4550 for the day.

Stocks Ideas
Stocks Ideas discussed on Friday remain intact. Jindal Saw Pipes still looks attractive at 560 and likely to touch 590 levels. Simiarly, one may also buy Bharat Forge at the current levels with targets of 230.

New Stocks Ideas that I would like to add have been 'Sell' calls. These include:

Scrip name - Buy/Sell - Recommended Rate - Target Price - Stop Loss - Reason

1) Bank of India - Sell - 310 - 290 - 325 - the stock has seen increase in Open Interest on friday and stock fell on that day with high volumes, which indicates some institutional selling coming in this stock. Today with gap up opening possible, one may sell this stock around 310 with targets of 325.

2) GE Shipping - Sell - 256 - 235 - 267 - the chart indicates some selling pressure coming in 250-265 range in this stock. Also, Open Interest has increased by around 25% for August series which indicates further sell build-up on the stock. One may sell around 256-258 levels with stop loss at 265 and target price of 235.

In Options, one may sell Nifty 4400 Puts for around 15 Rs. with stop-loss at 25.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 21st August 2009

2009-08-20T17:19:00.001-07:00

Break once-a-while
It is sometimes good to take a break to regain the energy, the enthusiasm and the right spirit to move ahead. It has been more than 1 month and luckily markets have not moved a bit in the last 1 month. I was in self-isolated mode to understand the strengths and the weaknesses that were present within me.

Anyways, let's move ahead with the markets. The markets for last few days have been under pressure due to consistent selling from FIIs. In the Aug series, FIIs have sold equities worth 5000 crores (as per NSE provisional figure) which indicates that institutions have some worries at various fronts.

The foremost is the valuations. Most of the stocks have already discounted the possible economic recovery to an extent and these are unlikely to go up further on till the time one sees any fundamental shift in the valuations part. Regarding this, second quarterly results in October will play a crucial role.

Globally as well, the markets are now fairly-valued. The further upside from the current levels would be determined by some hard core data like IIP in India and Unemployment data / GDP numbers for UK or USA.

Locally in India, another negative factors that are hurting markets are the poor monsoons and the increase in commodity markets that are hurting the companies bottom-line. The consumption based companies are facing slowdown from rural pockets due to poor monsoon. These will have negative impact on sectors like FMCG and Auto. Similarly increase in prices of crude oil, metals are hurting the manufacturing sector.

Henceforth, one must avoid fresh buying into the stocks for next 15 days or so. By that time, we will see some clarity coming in for monsoons and the global mood for next structural shift.

Let's discuss some stocks meanwhile.
Stocks Ideas
Contrary to my views above, I am recommending some buy on the stocks. These are purely technical calls on the basis of Open Interest in Futures and the Delivery happening in that stocks.

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss - Reason

1) CESC - Buy - 315 - 390 - 290 - the stock has been going steadily from 280 levels on higher volumes. The next two target levels can be 370 and 390. The trend would get reversed if it breaks 290 levels.

2) Andhra Bank - Buy - 89 - 97 - 81 - the stock has seen some major gains in Open Interest on Thursday (22%). The charts also indicates bullishness with good quantaum of delivery happening in the stock around the current levels.

3) Bharat Forge - Buy - 217.25 - 230 - 210 - the stock was beaten down badly from 250 levels to 215. On Thursday, we have seen some roll-over happening which indicates potential downside in next month. But before this happens, we are likely to see the stock going up on short covering which can support the stock around the current levels.

4) Jindal Saw - Buy - 550 - 590 - 525 - the stock has again seen the major change in Open Interest (26%) in August series which indicates the bullishness in the stock. The chart also indicates bulishness as it goes up on higher volumes.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 29th July 2009

2009-07-28T17:41:00.000-07:00

Yesterday's Snapshot
Well, the much anticipated event after budget has passed peacefully yesterday. RBI Quarterly Credit Policy brings no new suprises. The bank has kept the rates unchanged, increases the growth projections and also the inflation picture. All these factors were already anticipated in both equity and bond markets and hence, brought no major volatility.

The benchmark indices closed the day almost flat. Nifty closed down 3 points during yesteday's trading. Among the sectors, real-estate sectors saw some frantic buying coming in. BSE Realty Index gained by 4% with major contributions from stocks like Unitech, DLF, HDIL and Sobha Developers.

The sector that was a laggard during yesterday's trading was Bank Index. It could be due to no positive suprises coming in RBI Credit Policy. Chances do exist that some speculators who entered the banking stocks before credit policy cut their positions that might have put pressure on the banking stocks.

FII View
FII statistics indicate muted response from them. It seems they have rolled-over their positions in the derivatives segment yesterday. In the cash segment, they were net sellers by about 50 crores, which is not a major figure to consider.

In the Index futures segment, FIIs were net buyers by about 34 crores Rs, adding about 33000 new contracts. In the Index Options segment, FIIs were net sellers by about 150 crores Rs. adding about 35000 new contracts. Some Call-writing was witnessed in August 4700 and 4800 Nifty Calls which are not good signs for the markets.

In the Stocks Futures segment, FIIs were net sellers by about 500 crores Rs, reducing their open positions by about 15000 contracts.

The overall data indicates some pressure building up in the market. We might see some temporary pull back in the markets. Hence, traders are advised to trade cautiously till expiry. The current scenario indicates expiry could be between 4400-4500. For today, traders can short Nifty around 4585 with stop-loss at 4625 and target price of 4490.

Stocks Views
One stock that really look interesting at the moment is Dewan Housing. The stock after moving up to 160 has come down to 130 levels. It consolidated at those levels and re-bounced yesterday to 140. If it doesnt break 130 again, then it can go up to 160 Rs in next few trading sessions.

Options Ideas
Due to flat openings in the last few days, the premium for august contracts have also depreciated. Hence, this is the best time to adopt Straddle strategy. One may buy Nifty 4800 Call and Nifty 4300 Put for August. The combined outflow from the given strategy is (87 + 78) 165 Rs. Now, if Nifty touches any of these strike prices before 10th August, then the premium for that contract could be around 160 Rs. One can exit that position and let the other position open with a hope that market turn arounds to give the maximum premium.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 20th July 2009

2009-07-19T17:15:00.001-07:00

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!!

Equity and Options Ideas for 15th July 2009

2009-07-14T10:09:00.000-07:00

Today's Highlights
Boy!!!! What a day we had on Dalal Street today... After having some really bad days post budget, we have a really soothing day today when markets moved as if they want to heal the wounds quickly and re-set the journey towards new highs...

But is it the right time to be optimistic??? Once again, we are hearing some silent whispers on possible turnaround in the glooming economic scenario. Goldman Sachs has just announced its results which came out really good. Here, HDFC and Infosys announced good results for 1st quarter. On the negative side, pains is still there at real-estate front. Similarly oil related companies are also suffering... Metals stocks have also seen quite a beating...

Amidst such scenario, we must remain cautious and vigilant. There is still some pain left and we must ready ourselves for those days. Keep some cash reserves to put your money in equities during those days. Also, keep some cash ready to save your positions for those sudden downturns.

FII View
FII on Tuesday looked quite bullish. In the cash segment, FIIs were net buyers by about 80 crores, which admitedly is not a big figure. In the Index futures segment, FIIs were net buyers by about 550 crores, adding about 9000 new contracts. Now, these are good signs for the stock markets as it indicates fresh build up on the positive side.

In the Index Options segment, FIIs were net sellers by around 50 crores, adding around 30000 new contracts. We have seen major Open Interest build up in Nifty 4000 Put and 4200 Call. Chances do exist that institutions might have gone short on 4000 Put and long on 4200 Call.

Hence, the trend indicates further rise in the markets. The traders are advised to wait till 4160 before taking new positions. If Nifty manages to breach this level, traders can go long on Nifty with target levels of 4215 and stop loss at 4100.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 13th July 2009

2009-07-12T16:57:00.000-07:00

Dwelling the Past
Indian stock markets had a terrible last week. Union Budget, which hoped to bring some path-breaking initiatives, end up being sober and long-term. This one trigger changed the sentiments of the market completely and eventually, we have seen three major falls during the week. The benchmark indices closed the week with losses of 10% each.

Another factor which has been bothering the markets is monsoon. Monsoon in India, this time around, has been erratic. It is raining normal in few states of South India, but rest of India is not getting the plenty rainfall. North Indian states of Punjab, Haryana and Uttar Pradesh have been badly hit from the monsoon which is a major hit for the Indian economy and the forthcoming plans for the government. Government is quite hopeul of "Bharat Nirmaan" story and expecting some strong consumer demand from rural india. But if monsoon doesn't prove good, then this will surely hit the rural india consumption this year.

FII View
FIIs remained in Sellers mode on Friday. As per the provisional data released by NSE, FIIs were net sellers by about 950 crores in the Cash segment. The fall was steep in last half-an-hour which makes ourselves wary on Monday opening.

In the Index futures segment, FIIs remained net buyers by about 84 crores, adding about 10000 new contracts. In the Index Options segment, FIIs were net buyers of about 19 crores, adding about 23000 new contracts. We have seen some major OI build up in the 4000, 4100 Nifty calls while it has declined for 4200 and 4300 Calls. In the puts side, only 3800 Put has seen some build-up which was obvious seeking the fall in the markets.

The overall trend indicates a narrow range for the markets, with volatility getting increased in the days to come. Monsoon will play a crucial rule in the coming week. If it doesn't improve, then we might see a fall coming into the markets. My inner sense says that government is likely to announce something on the divestment front this week. It might be done with a view to mitigate the negative impact of the budget as well as the monsoon.

Hence, traders are advised to sit at sidelines and do not try to play on Nifty for next 1-2 days. It is advised to trade in specific stocks for better returns.

Equity and Options Ideas
Few stocks ideas for the coming days are given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Satyam Computers - Buy - 73.5 - 85 - 66
JP Hydro - Buy - 65.5 - 75 - 58.5
Kesoram Industries - Buy - 260 - 370 - 235
United Phosphorous - Buy - 135 - 157 - 115

Few Options Ideas are:
1) Sell RIL 2100 Put - RIL is currently trading at 1775. 2100 levels are around 18% away. Selling this call would give an inflow of around 900 Rs which could be your maximum profit in this strategy.

2) Buy Renuka Sugars 150 Call and 120 Call - this is a strangle strategy of buying Calls and Puts which are 10% away on either side. The outflow for buying this strategy would be around 8000 and is likely to generate unlimited profit, if the stocks breaches any level of either 120 or 150.

3) Sell Unitech 100 Call - again a safe strategy of selling a call which is 50% away from the stock price. This would give you maximum profit of 2000 Rs, but unlimited losses if Unitech crosses 100 Rs. It is currently trading around 66 Rs.

Wishing you a great trading day today!!

Equity and Options Ideas for 10th July 2009

2009-07-09T10:08:00.000-07:00

Today's Highlights
Indian Stock Markets had have a quiet session on Thursday. After gruelling session on Wednesday, today has been a day of pause before we might see resume of batte between bulls and the bears.

Union Budget this time has divided the proponents and the opponents camps equally. Few have been quite skeptical about the fiscal deficit and lack of clear roadmap on how it will be tackled. Another concern that seriously cramps our system is the distribution mechanism. Many a times, social schemes have been announced but when it comes to the delivery, corrupt public distribution system does not provide the aids to the needy.

On the contrary though, the proponets are talking about long term benefits of this budget as government intends to bring major revamp in the social sector and taking the country a step forward towards the developed nation. Though, the heavy borrowing plans of the government would remain a concern for the economists.

Amidst such scenario, the picture is hazy. Though, my advise is to adopt strict stop-loss and target price strategy. Do not blink once before closing your position when either side of the spectrum is achieved.

FII View
FII On Thursday gave somewhat sober picture. In the cash segment, they remain net sellers of about 550 crores. In the Index futures segment, FIIs were net buyers of about 60 crores, closing almost 40000 new contracts. This looks interesting and hazy as ever. There is no clear direction on which way markets could move in the coming days.

In the Index Options segment, FIIs remain net sellers of about 270 crores. Nifty 4000 Put and 4200 Call were among the major Open Interest Gainers. Few in-the-money Put options like 4400 Put, 4300 Put and 4200 Put have seen decrease in Open Interest.

This indicates that markets are likely to remain in range-bound mode for next few days, with slightly positive bias. Hence, traders are advised to go long on Nifty around 4060-4090 range with target of 4200 and stop-loss at 4025.

Stocks Views
Few stock ideas for the day are as follows:

Scrip Name - Buy/Sell- Recommended Price - Target Price - Stop Loss Price
Ashok Leyland - Buy - 33 - 37 - 30
Central Bank - Buy - 92 - 110 - 85

Wishing you a great day ahead!!

Equity and Options Ideas for 7th July 2009

2009-07-06T17:04:00.000-07:00

Yesterday's Mayhem
Well... Whatever we have seen yesterday was a big disappointment. There was general feeling on the Dalal Street about too many positive annoucements from annual budget - big disinvestment annoucements, increase FDI in financial services, subsidies in oil and fertlizers, free oil market, more waivers in tax exemptions and housing loans, stimulus for housing sector and other general social sector reforms. In nutshell, there were too many demands and the end result was nothing in the pocket for spoilt kids, except for few who are unhealthy and are in dire straits.

My personal view is that Pranab has given a good budget. He cannot make big annoucements to make people happy. Whatever he has promised, has a specific objective behind it. He looks towards rural india to sustain the growth of the economy and would like to empower them through various schemes.

For poor in rural india, has announced nationwide implementation of NREGA. He has also announced several sops for the farmers. The subsidies for fertlizers will now be nutrient based than quantity based which is a big plus for the farmers and make companes accountable. Besides, he has also promised to offer soft loans for farmers, which would again help rural people to generate more income for themselves and hence, would spend more to enhance their life style.

He has also given sops for the exporters which is again a positive sign from the Finance Minister. Though, the area which is still left open is how he will control Fiscal Deficit and a broader roadmap for disinvestment. There is no doubt that government has to do away with ailing government firms and he should have announced some steps being taken for leaner and meaner government machinery.

Also, there must be some talk about education reforms, which were missing in the budget. Education is like a long term investment that gives healthy returns in future. If India is educated, it will create more job opportunities, support economy in a big way and also help to eradicate some of the social problems, that have still plagued our country.

In nutshell, it was a good budget with some open issues. Let's hope Finance Minister would try to fill those gaps sooner or later to make this budget a roadmap for growth of Indian economy in future.

Sector View
The biggest disappointment in this budget came for education sector. Stocks like Educomp, Everonn and NIIT were the biggest losers on NSE during yesterday's trading. Financial sector also got a hit due to interest rebates / loan waive off announced by the finance minister, high fiscal deficit which might lead to interest rate spikes and no change in FDI in Insurance sector.

The sectors that got some positive news from themselves are infrastructure, fertlizers, FMCG. Some good annoucements also came for export oriented sectors like Jems and Jewellery, IT.

Stocks Views
Post-budget, we may see some re-alignment in the sectors. One may see positive moves coming in Infrastructure and Power stocks after a bout of correction. We may also see some buying coming in FMCG stocks like HUL, ITC, Marico in few days time.

On the other side, PSU bank stocks are likely to get a hit badly. The same thing happened with them last year as well when then FM, Mr. Chidabaram announced loan-waive off through Public sector banks. Real-estate stocks like DLF, Unitech are also likely to get drubbing as no major relief has been announced for them.

Hence, the opportunities have come to have some cherry picking with a long term objective. Some of the stocks that get immediate attention include Aditya Birla Nuvo, Marico, Ultratech Cements, IRB (around 150), and REC. These can be accumulated around current price tags with 1-2 years horizon.

FII Views
FIIs Views were pretty negative during yesterday's trading. In the cash segment, FIIs were net sellers by around 1500 crores. In the Index futures segment, FIIs were net sellers of about 980 crores, adding around 10000 new contracts.

In Index Options segment, FIIs were net sellers of about 600 crores, adding around 50000 new contracts. Both Index futures and Options indicate negative trend for the market and correction is likely to continue for next few days.

Nifty is expected to go around 3900 during the ongoing correction before we might actually see some consolidation coming into the markets. From those levels, we might see event based moves coming in the markets.

Hence, traders are advised to stay away from the stock markets for now on. One can take bull spread of buying Nifty 3900 Call and sell Nifty 4100 Call if Nifty comes down to 3950. One is likely to see a turnaround in the indices from those levels.

Wishing you a safe and profitbale trading!!!

Equity and Options Ideas for 02nd July 2009

2009-07-01T10:15:00.000-07:00

Highlights of the day
Indian stock markets had a nice positive session on Wednesday, with benchmark indices gaining about 1% each. The markets opened in green and sustained in positive zone for initial part of the day. A round of short-buildup pulled the markets down to crucial support level of 4250 on Nifty. The markets managed to rebound from those levels and finally closing the day above 4300.

Among the gainers were the real-estate and auto sectors. DLF and Unitech had a good session, gaining around 4% each. Tata Motors too had a good session after recent drubbing. M&M also had a good day today.

Overall, the markets are back to square-one at around 4300 levels. We must not forget that post-elections outcome, the markets have remained consolidating around a narrow range of 4200-4600 for last one-and-half months. A breakout is certain by end of next week and we must prepare ourselves for the same.

FII View
FII had a mixed day on Dalal Street on Wednesday. In the cash segment, FIIs made net purchases of 186 crores. In the Index futures segment, FIIs made net sell of 238 crores, adding around 19000 new contracts. This might be done to protect their equity positions.

In the Index Options segment, FIIs made net purchases of 268 crores, adding around 21000 new contracts. We have seen consistent buying coming in both Call and Put options, thus, indicating that markets are directionless on the budget eve and anicipating anything to happen on / after budget.

What's Next?
Nifty is likely to consolidate around the current levels for next 2 days. We may see some bouts of sudden upside / downside coming into markets and hence traders are advised to close their derivative positions in futures and Short Options side and stay away.

For Option traders, it is advised to take Strangle strategy by buying 4500 Nifty Call and 4100 Nifty Put options. This strategy would cost around 200 Rs, but give benefit, once markets take a definite turn on Monday.

Stock Ideas
Today was a bad day for us with Moserbaer and MIC hitting their stop-loss levels. Some new stock ideas for next 2 days are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Cipla - Sell - 245 - 235 - 257
India Infoline - Buy - 131 - 153 - 115
Areva T&D - Buy - 362 - 390 - 325
Mphasis - Sell - 373 - 354 - 390

Wishing you a great trading day ahead!!

Equity and Options Ideas for 01st July 2009

2009-06-30T17:42:00.000-07:00

Yesterday's Highlights
Indian stock markets had a tough session on Tuesday with major indices falling around 2%. Mid-cap space where we see maximum retail participation have also fallen down by around 4%. It seems traders and institutions would like to book profits and stay more in cash before the budget outcome.

Among the stocks that gained on Nifty were Hero Honda (savior this time as well), TCS, BPCL, ONGC. But these stocks just managed to remain in green. Among the losers were the momentum stocks like Unitech, Suzlon, DLF which have fallen down between 7-10% during yesterday's trading.

One stock that is likely to go up is NTPC. We expect RIL-NTPC gas dispute to be resolved as RIL might not like to fight legal cases at two fronts simultaneously with RNRL and NTPC. There have been positive vibes from both parties in last few days and probability of settlement is more, which would help both the stocks to recover.

FII View
FII on Monday were largely on Sell side. In the cash segment, they were net buyers of about 108 crores, but is also includes host of bulk deals done in United Spirits. If we exclude that data, FIIs are net sellers by approximately 500 crores.

In the Index futures segment, FIIs are again net sellers by 590 crores, reducing their positions marginally by 1300 contracts. In the Index Options segment, FIIs were net sellers of 600 crores, adding around 16000 new contracts. Premiums for deep out of the money 4700-5000 Nifty Calls have reduced substantially, indicating extensive writing happening in this stock.

What's Next?
The cues, both domestic and international are not so good. Though, one thing looks probable that markets are not likely to fall much before budget, as one may expect some suprise positive annoucements in the budget. We may see further profit booking by institutions, but it would be limited.

Hence, traders are advised to go long on Nifty around 4250-4270 levels. One may expect a target levels of 4350 on the upside. The stop loss can be maintained at 4180 on the downside.

Stocks Ideas
Despite the sharp meltdown in mid-cap universe, our recommendations managed to hold back. REI Agro has managed to hit its target price of 80 Rs yesterday. NTPC too managed to hit its target price of 201.

Some new stock ideas are as follows:
Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Bharti Airtel - Buy - 802 - 915 - 765
ICICI Bank - Buy - 710 - 800 - 680
NTPC - Buy - 195 - 210 - 187
Jyoti Structures - Buy - 135 - 145 - 128
JBF Industries - Buy - 78 - 89 - 72

Wishing you a great day ahead!!

Equity and Options Strategies for 30th June 2009

2009-06-29T17:54:00.000-07:00

Yesteday's Highlights
Indian Stock Markets had a good day overall on Monday, despite its flat closing. The markets remained in green for major part of the day, before profit-booking pulled down the indices for a flat closing.

Among the sectors, real-estate and Infrastructure sectors have shown great strength on Monday. Both DLF and Unitech have closed up more than 3% each. GMR Infra, too, had a great day, closing up 13%.

We are having ideal setup for Union Budget this time. Almost every stock is showing strength, anticipating some sops to be given to its sector. On Monday, when Pranab Mukherjee will deliver the budget, many of the dreams would be fulfilled and many would be shattered. Let's wait and watch.

FII View
FII View on Monday was of a cautios optimisim. In the cash segment, FIIs bought equities worth 293 crores. As discussed above, the buying was seen in real-estate and infrastructure stocks.

In the Index futures, FIIs were net sellers by 150 crores, reducing their positions by 23000 contracts. This indicates the cautios view from them before budget arrives.

In the Index Options segment, FIIs have been net buyers of 384 crores, adding about 34000 new contracts. Despite decent run yesterday, the premiums for Put option did not fall much, especially those of near strike prices like 4300, 4400. This indicates that some amount of Put accumulation is happening around the current levels to hedge the open positions in other segments. Similarly, premiums for Call options gained decently yesterday, anticipating another upward thrust like one seen during elections outcome.

What's Next?
The cues indicate range-bound market around the current levels, till Union Budget on Monday. Traders can go long on Nifty around 4390-4400 levels for a target of 4460. The stop-loss can be maintained at 4350.

Stocks Ideas
Yesterday's positive mood helped various stocks meet its target prices. Aban Offshore touched its target price of 845 before coming down to settle at 825. Sterlite Industries also hit its target price of 630 conveniently and closed above it.

Just for a recap, the stocks ideas which are still open are given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Moserbaer - Buy - 93 - 102 - 86
M&M - Buy - 695 - 740 - 684
NTPC - Buy - 195 - 201 - 185
JP hydro - Buy - 94 - 110 - 85
Ambuja Cements - Sell - 90 - 83 - 98
Amtek Auto - Sell - 130 - 113 - 144
BRFL - Buy - 190 - 207 - 177
CESC - Buy - 291 - 320 - 268
FDC - Buy - 42 - 53 - 34

Options Strategies
1) Buy Nifty 4300 Put, 4800 Call and Sell Nifty 4000 Put, 3800 Put and 5100 Call - this strategy would give losses , if Nifty stays between 4400 and 4800 or if it goes below 3500. However, it will give maximum profit of around 10000 Rs., if Nifty passes 5000 or comes around 4000 levels.

2) Buy Nifty 4600 Call and Sell Nifty 4800 Call, 5000 Call, two 3700 Nifty Puts - this strategy would give losses, if Nifty goes below 3600 or goes above 5300. However, it gives profit of around 10000 Rs if Nifty remains between 4800 to 5000.

The pay-off for these strategies can be viewed by clicking here...

Wishing you a great day ahead!!

Equity and Options Ideas for 29th June 2009

2009-06-28T10:22:00.000-07:00

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!!

Equity and Option Ideas for 26th June 2009

2009-06-25T16:57:00.000-07:00

Yesterday's Trading
Indian stock markets had a tough session on Thursday, on the eve of June series expiry. The volatility in the market was more than the usual with indices managed to remain just in positive in the first half. The second half saw some major selling by FIIs which pulled the indices down and finally closing the day, down approximatey 2%.

Power sector showed some resilience amidst the fall, with stocks like NTPC, Power Grid, PTC managed to clocked some gains. Banking sector also managed to do well. PNB, HDFC Bank, ICICI Bank, Axis Bank closed up by 2-5%.

The major dragger on both the indices (Nifty and Sensex) was ONGC and BHEL. ONGC had poor set of numbers for FY08-09 on account of higher subsidy burden which pulled the stock down. BHEL has also seen some major profit booking coming. The trend for both these stocks are likely to continue in next day or two.

FII View
FIIs on Thursday stood out as sellers in the stock market. The fall is major attributed to them. In the equities segment, FIIs remained net sellers of about 1500 crores.This the maximum one day selling in one day for 2009. This definitely raises a concern on their approach for the short term.

In the Index futures segment, FIIs were net sellers by 554 crore Rs. The rollover in Index futures was less as compared to last month. It might be due to the uncertainity preceding on the Union Budget event that restrained the traders to carry forward their positions to July.

In the Index Options, FIIs were again net sellers by 1030 crores. Most of this selling was observed in June contracts only and hence, one should not take these figures seriously.

Stock futures and stock options does not indicate any major trend arising in the stocks.

What's Next?
What we feared yesterday came out true. The sell-off continues in the Indian markets for a while. We might see markets consolidating at around current levels till Budget event. The definite trend can only be seen emerging around 15th of July.

Hence, the traders are advised to adopt cautious approach till the budget and do not open any futures or Short Options position on the budget eve as we might again see some wild movements in the market.

For today, traders are advised to go long on Nifty around 4250 with targets of 4320. On the downside, one may put stop-loss at 4175-4180.

Stocks Ideas
Despite the sharp fall, no major triggers occured in our recommendations. Some new stock ideas for the coming days are as follows:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Ambuja Cements - Sell - 90 - 83 - 98
Ballarpur - Buy - 19.5 - 22.25 - 18.35
BHEL - Sell - 2130 - 2015 - 2250
Escorts - Buy - 55 - 62 - 48
GSPL - Buy - 49 - 53 - 46
IVRCL Infra - Buy - 346 - 364 - 325
JP Hydro - Buy - 93 - 110 - 85
Network18 - Buy - 113 - 132 - 105
NTPC - Buy - 193 - 201 - 185
Sterlite - Buy - 575 - 630 - 545

Wishing you a great trading day ahead!!

Equity and Options Ideas for 25th June 2009

2009-06-24T16:53:00.000-07:00

Yesterday's Highlights
The Indian stock markets had a decent run-up yesteday, with benchmark indices gaining by about 1%. Suzlon was the top gainer on Nifty (9%) on rumors that it is selling its stake in one of its subsidiaries. Tata Motors also had a decent run yesterday, gaining abut 4.5%. Among the losers on benchmark indices were HDFC and HDFC Bank. Both the companies saw some profit booking happening in their stocks.

Overall, it has been a short-covering rally that has happened after last few days of selling pressure. Today is the expiry day for June series, where we might see high volatility in the Indian markets.

FII View
FII on Wednesday looked skeptic. In the cash segment, FIIs were net sellers of 792 crores. It is to be noted that this is the largest sell-off for June series which raises the eyebrows on further upside move in the markets.

Another point that one needs to look at is the net buy/sell for June series. In June series, FIIs remained net buyers by about 700 crores till now with respect to 13611 crores in May series. This figure itself is interesting and indicates that long term players are not putting funds at the current levels. Hence, Caution is the mantra for the investors and traders at the moment.

Anyways, let's move back to derivatives segment. In Index futures segment, FIIs were net buyers by about 600 crores, reducing their open positions by almost 11000 contracts. This indicates the short-covering done by FIIs in Index futures.

In the Index Options segment, FIIs were again net buyers by 550 crores, adding 50000 new contracts. The maximum build-up is seen in 4200 and 4300 Puts and 4300 and 4350 Calls. It indicates that expiry is likely to be a range-bound between 4300-4400.

In Stock Futures, FIIs remained net buyers by around 350 crores, adding around 10000 new contracts. The major build up was seen in Balrampur Chini, LIC Housing Finance and Welspun Gujarat.

The overall trend indicates caution at the moment. After the current short-rally, we might see markets correcting to 3800-3900 levels. Hence, the advise to the traders is to adopt strict range of target price and stop-loss. As discussed above as well, there has been a pause at fresh buying by institutions at the current levels. Till the time, it is not resumed, we might not see new levels attained by Indian markets.

Stock Views
The stock views that I would like to share are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Balrampur Chini - Sell - 108 - 96 - 116
DCHL - Buy - 75.5 - 87 - 67.5
MIC - Buy - 37.5 - 40 - 35.75

Amtek Auto - Sell - 130 - 113 - 144

Wishing you a great trading day ahead!!

Equity and Options Ideas for 22nd June 2009

2009-06-21T07:50:00.000-07:00

Last Week Snapshot
The last week has not been a good one for Indian equity markets, giving up more than 5%. The major reason behind the decline was uncertainty in the global markets over the current valuations. Also, RIL-RNRL controversy put further pressure on the Nifty index, since RIL holds maximum weight in it.

Among the stocks, momentum stocks took the maximum beating as leveraged positions got unwind during the week. Inflation data, for first time in 50 years, has come in negative territory which fueled speculation in the markets about possible rate cuts.

Crude Oil has been in bullish spree for last 2 months and has reached above 70$ per barrel. Further rise in the crude oil price would dampen the sentiments of the investors and we might see correction coming into the Indian markets.

Another concern that has been hovering on the Dalal Street is El-Nino effect, which might lead to less than normal rainfall over Indian peninsula. This would again be a dampner for the Indian markets.

FII View
FII on Friday, were seen doing short covering of their short positions. In last one hour, markets rebounded from day's lows and closing at day's highs. We are likely to continue with the same on Monday, after which we might see some clear direction coming into Indian markets.

FII were net sellers by 30 crores in the cash segment. In index futures segment, FIIs were net buyers by 425 crores, reducing their exposure by about 15000 contracts. This indicates that FIIs might have covered their short positions in June segment.

In Index Options segment, FIIs were net sellers by 500 crores, reducing their exposure by 30000 contracts. We have seen Open Interest declining in deep out-of-money Call options and near Put-Options, which indicates FIIs anticipating limited upside in the markets.

What's Next?
The next week is the expiry week and hence, volatility is expected to remain high. The Options data suggest that we might see expiry between 4400-4500 range. Nifty Put options for 4100-4400 has see OI declining. Premiums for the same have also decline. On the contrary, Nifty 4200-4300 Call options has seen OI increasing with premiums at almost same levels, which indicates some kind of buying interest present in the given call options.

Hence, traders are advised to go long on Nifty in 4300-4325 range with stop-loss at 4220 and target price around 4425.

Stocks Views
Friday's volatility lead to stop-losses being trigerred in Ultratech Cements and Phoenix Limited. Few stock ideas for the week are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
ABG Shipyard - Buy - 196 - 225 - 180
GDL - Sell - 104.3 - 92 - 115
CESC - Buy - 291 - 320 - 268
BRFL - Buy - 187 - 207 - 177

Options Ideas
1) Buy 4800 Call and Sell 2 5100 Calls and 2 5300 Calls for July- this strategy would yield profits below 5300. The maximum profit would be in the range 5000-5300. Advised to close this position if Nifty starts trading above 5100.

Wishing you a great week ahead!!!

Equity and Options Ideas for 18th June 2009

2009-06-17T17:00:00.000-07:00

Yesterday's Review
If someone loves to ride roller-coaster and feels ecstatic by the excitement and fear that it brings along, then stock markets is another place to be. Yesterday's volatility in the market was just the perfect example of the roller-coaster feel in the minds of traders.

The markets opened gap down and then traded within a narrow range till afternoon. Suddenly, we saw selling pressure creeping to the markets and before, one can even think, markets broke all support levels like nine pins and finally closing the day, down 3.5%. The selling was brutal and almost broke Nifty's psychological levels of 4300.

FII View
FII on Wednesday traded mixed in the markets. In the cash segment, FIIs sold equities worth 360 crores. The selling is not as preciptious, as perceived to be, which indicates that the fall in the markets were largely due to unwinding of leveraged positions, built up the traders.

In the derivatives segment, FIIs were net sellers by 1300 crores, reducing their open positions by 5000 contracts. In the Index Options segment, FIIs were net sellers by 22 crores, adding around 25000 new contracts. Nifty Put options, saw some unwinding happening while call options added new contracts. The data indicates that FIIs might be keeping short positions in Futures open, while closing their Options Put options.

What's Next???
The de-leveraging of the positions are likely to continue for early part of session today as well when we see markets moving within a range. Some kind of short-covering is also expected in the market. Overall, markets are likely to consolidate within 5% range from the current levels till expiry / any major announcement.

Hence, the traders are advised to go long on Nifty around 432-4335 with a target price of around 4425-4450. One can maintain stop-loss at 4270 for the given position.

Stocks Views
Sell recommendation on HCC (13th June 2009), hit its target price of 98 during yesterday's trading. While buy recommendations for Aditya Birla Nuvo (12 June) and RCF (16th June) hit their stop-losses.

Yesterday's call can be brought forward for today's trading as well.

Options Strategies
One can close Ispat Industries strategy taken on 29th May to book the gains of around 12000 Rs.

Wishing you a great day ahead!!!

Equity and Options Ideas for 17th June 2009

2009-06-16T17:17:00.000-07:00

Yesterdy's Snapshot
Indian cricket team's disappointing run continues in T20-20 world cup. It lost to South Africa in last Super-eight game yesterday by 12 runs. But on the othe side, Indian equity markets have been overperforming its peers consistently.

Yesterday, when all other Asian indices fell, tracking fall in US, Indian markets have rebounded back from day's lows and closed the day with gains of 1% each. The resiliance in the Indian markets has been great, but it also leads to more speculation in the market which is not a good sign.

Among the stocks that gained, ADAG pack was at the top on Nifty, still relishing the win over their brothers. The stocks in the banking and finance space also performed well, after the Q1 advance tax payment data reveals that banks have deposited more tax this time than an year ago, indicating rise in their profits.

On the other side, Mukesh Ambani stocks had another bad day in the street. Also, stocks in metal space are seeing some correction coming in due to concerns over valuations. Recent report by IIFCL on Steel sector suggests potential downside from the current levels due to extremely high valuations and low demand in the global markets for precious metals.

FII View
Foreign Institutional Investors (FII) had maintained their pessimisstic view on the markets. In the cash segment, they were again net sellers by 730 crores. In the index futures segment, they were net sellers by around 1200 crores, adding 58000 new contracts. Most of these positions are created in June and July contracts, which indicates that potential upside in their view is limited from hereon.

In the Index Options segment, FIIs have been net buyers of around 220 crores, adding around 20000 new contracts. Premiums for deep-out of the money Put and Call options have decreased substantially, which indicates range bound markets till expiry.

What's Next?
The overall trend indicates range-bound market with a negative bias in the coming days. The markets are finding themselves difficult to maintain themselves above 4600 on Nifty and 15000 on Sensex. Hence, the traders are advised to go short on Nifty on every rise. The traders can go short on Nifty around 4530 - 4550 range, with stop loss of 4620 and target price of 4400.

Stocks View
Sell recommendations on Orbit Corporation (3rd June) and Tata Communications (11th June) have hit their target prices yesterday. These were medium term calls with potential downside of around 15%.

Few new stocks ideas are as follows:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Jet Airways - Sell - 270 - 225 - 290
REI Agro - Buy - 67.5 - 78.5-60
Ultratech Cements - Buy - 703 - 750 - 670

Wishing you a great trading day ahead!!!

Equity and Options Ideas for 16th June 2009

2009-06-15T17:08:00.000-07:00

Yesterday's Snapshot
Indian stock markets had a bad day on Monday, with benchmark indices falling by more than 2%. The fall was attributed by global weakness in the equities market and it further accentuated by the setback to RIL in its case with RNRL which further pushed the major indices down.

Among the sectors, Banking, IT and fertilizer space looked really strong. Stocks like Axis Bank, PNB, HCL Tech, RCF, Chambal Fertilizer stood strong during the day. Fertilizer sector is hoping for some positive announcement in this year's budget which makes this counter interesting amongst speculators.

FII View
FII on Monday were largely seen pressing "Sell' button. In the cash segment, FIIs were net sellers by 411 crores. In the Index futures segment, they were again net sellers of 400 crores, adding around 3000 new contracts. In the Index Options segment, FII were net buyers of 130 crores. We have seen some kind of short covering happening in higher call strike prices which is a good sign for the markets. In the Stock Futures segment, FII were again net sellers of 140 crores, adding around 5000 new contracts.

What's Next?
The overall trend indicates some kind of short-covering happening at the lower levels. Yesterday's strategy can hold for today as well. One can buy Nifty futures at around 4400 levels with stop-loss at 4350 and target of 4470-4500 levels.

Stocks Views
Buy Recommendation for Everready hit its sop-loss during yesterday's trading. Two new stock ideas for the day are:

Scrip Name - Buy/Sell - Recommended Price - Target Price -Stop Loss Price
RCF - Buy - 84 - 94.3 - 77
Phoenix Mills - Buy - 120 - 134 - 109

Options Strategy
1) Buy one Chambal Fertilizer 80 Call and Sell two 85 Calls - this strategy holds good if Chambal Fertilizer closes anywhere less than Rs. 85. It's current market price is Rs. 71. We expect the stock to rise in the near future, but not to an extent of 20%.

The strategy gives maximum returns Chambal closes between Rs. 80-85 while gives losses above Rs. 90.

Wishing you a great trading day!!!

Equity and Options Ideas for 15th June 2009

2009-06-14T10:38:00.000-07:00

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!!

Equity and Option Ideas for 12th June 2009

2009-06-11T10:53:00.000-07:00

Today's Review
Indian stock markets have had a volatile sessions on Thursday. The opening was a lukewarm, with major indices falling by 1% each. Then, we saw some recovery coming in Indian markets, before we again saw a selling coming into the markets. The last half-an-hour or so, the markets again recovered to finally close the day almost flat.

No major sector-specific movement was seen during the day. Some individual stocks were in limelight. Tulip Telecom saw some value buying coming. The stock was once up around 16%, but finally closing the day, gaining by around 12% to 770. This particular stock is covered by various broking houses and most of them recommended buy on this stock. Indiabulls Research Desk has covered this stock as The Emerging Company in its latest monthly report.

Among the major losers were BPCL and other Oil Distribution companies, whose margins are under pressure due to rise in Crude Prices. There has been a talk of Oil Deregulation, but it will take some to pass this bill in the parliament and till then, we might see such pressure persisttent in these stocks.

FII View
FII gave mixed signals during the current day trading. In the cash segment, FIIs were net buyers of around 800 crores, which is an ecnouraging sign. In the Index futures segment, FIIs made net sell of 600 crores, adding about 13000 new contracts. This indicates FII are not anticipating markets to go up much higher from the current levels.

In the Index Options segment, FIIs were net sellers of around 300 crores adding about 30000 new contracts. Call writing was quite heavy on Nifty, which indicates we might see correction coming into Indian markets soon. In the stock futures segment, FII made net purchase of 180 crores, adding mere 1700 new contracts. It seems that FIIs have closed some of their short positions today.

The broader picture indicates correction in a day or two. Hence, traders are advised to sell on rallies for now on. Traders can sell Nifty around 4700 with stop loss at 4780 and target price of 4500.

Stocks Views
Stocks View shared in last few days remain intact. Few new stock ideas that I would like to share are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Tata Communications - Sell - 555 - 480 - 585
Aditya Birla Nuvo - Buy - 985 - 1075 - 870
Maytas Infra - Buy - 91 - 98 - 83

Options Strategy (Nifty)
1) Buy 4400 Put
2) Sell 4200 Put
3) Sell 3 Nifty 4100 Put
4) Sell 5200 Call

The given strategy will deliver profits, if Nifty manages to close between 4100 - 5200. The maximum profit comes, if Nifty closes between 4100 - 4300.

Wishing you a great trading day tomorrow!!

Equity and Options Ideas for 11th June

2009-06-10T17:49:00.001-07:00

Yesterday's Highlights
Indian Stock Markets had have a good session on Wednesday. Markets had a gap-up opening of more than 2.5% and moved in the particular range throughout the day. Energy stocks had a good run, with stocks like Tata Power and REL gained somewhere between 6-8%. Among the top losers were stocks like Tata Motors, DLF and Suzlon. Some good amount of buying is also seen in Cement sector where almost every stock gained during yesterday's trading.

As of now, it seems markets are in firm grip of bulls, as tremendous inflow of liquidity into the Indian markets helped the markets stay afloat, even at the upper side of valuations.

FII View
Foreign Institutional Investors (FII) have again been bullish on Wednesday. In the cash segment, they purchased stocks worth 740 crores which indicates bullish view.

In the Index futures segment, FIIs made net purchases of Rs. 738 crores adding 6000 new contracts. In the Index Options segment, FIIs made net purchases of 207 crores, adding about 35000 new contracts. There might be some build-up in Put side of Nifty to hedge their long positions in cash and index futures segment.

In the stock futures segment, FIIs made net purchases of around 200 crores, adding mere 500 new contracts. Stocks Options didn't see much action from FIIs.

What's Next?
The view on the market is more on the caution side. The market is supported by the tremendous inflow of funds from foreign markets, Domestic participation is also good, but still valuations are extremely high for some of the stocks, especially in real-estate and banking sectors.

Henceforth, traders are advised to buy Nifty 4600 Put when Nifty Spot trades around 4700 and stay there. Once the euphoria slows down a bit, we might see correction coming in Indian markets which might take Nifty to around 4300-4400 levels.

Wishing you a great trading day today!!!

Equity an Options Ideas for 10th June 2009

2009-06-09T17:18:00.000-07:00

Yesterday's Highlights
Tomorrow's session indicates the kind of mood in which markets have been living now a days. Every correction marks the line to start a new degree of bullishness. If fall on Monday was bad, then yesterday's pull-back was equally impressive. From day's low, markets have almost bounced back 5%.

The top gainers in yesterday's trades was IT and Real-estate sector. IT stocks like HCL Technologies, TCS, Wipro, all gained between 5-10%. Among the mid-cap stocks, it was Satyam's pack that led the rally. Both Satyam and Tech Mahindra were up more than 10%.

Real-estate sector too, had an impressive showing yesterday. DLF went up more than 10%. It is now sitting at the threshold of its IPO price and might face some resistance over there. Unitech too went up by 6% during day's trade.

Overall, it has been a good session for the Indian stock markets. Markets are again sitting at the crucial levels. How it will pan out from hereon, will be an interesting contest to watch out for.

FII View
Foreign Institutional Investors (FII) were bullish during yesterday's trading. In the cash segment, FII made net purchases of more than 950 crores, adding 30000 new contracts. In the Index Options segment, FII were net buyers of 250 crores, adding mere 1400 new contracts. It seems they have gained profits in CALL options. Overall, FIIs seem bullish on the index.

In the Stocks Futures segment, FIIs were net sellers of 500 crores, adding around 15000 new contracts. In the Stock Options, institutions were net sellers of around 90 crores. It indicates that FIIs hedged their index positions by taking the counter position in the stocks segment.

What's Next?
After the yesterday's surge, we may see Nifty making an attempt to cross psyoclogical 4600 mark. It has fallen down from these levels 3 times now. Another attempt is on cards within a day or two.

Hence, traders are advised to go short on Nifty at around 4600 with stop-loss at 4635 and target price of 4550. Nifty is likely to remain range-bound within 4500-4600 levels before it takes a decisive course.

Stocks View
Yesterday's trade saw IRB hitting its target price of 140. Sesa Goa on the other side hit its stop-loss levels. Two new stock ideas for the day are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Kolte Patil - Buy - 53 - 58 - 48.5
Exide Industries - Buy - 69.25 - 75 - 64

Wishing you a great trading day ahead!!

Equity and Options ideas for 9th June 2009

2009-06-08T17:18:00.001-07:00

Yesterday's Replay

Indian stock markets had a tough session on Monday. The markets opened somewhat flat and then started slipping into red. By afternoon, the markets were almost 2 % down. The panic of an impeding correction further pushed the markets down and finally the markets closed the day, down about 4%.

The major losers for the day remained Real-estate and Financial sector stocks. Unitech, DLF, Indiabulls Real-estate lost more than 10% each. In the banking space too, many stocks have fallen in the range of 5-10%. The correction also pulled down the mid-cap stocks. Mid-cap index fell down by 5.45% during yesterday's trading.

Among the gainers were Information Technology (IT) pack. Stocks like Infosys, Wipro, TCS all gained during yesterday’s trading.

FII View
The major culprit behind yesterday's fall are the Domestic Institutions. DII sold stocks worth 800 crores in the cash segment. While on the other side, FII were net sellers of mere 14 crores. This indicates that yesterday’s fall was not all-around.

In the Index futures segment, FII were net sellers of 730 crores, with addition of 20000 contracts. In Index Options segment, they were net sellers of 99 crores with net addition of 16000 contracts. Both the data indicates that FII have hedged their open positions by taking reverse approach in the derivatives side, again a sensible move taking yesterday's market condition into perspective.

In the stock futures segment, FIIs have been net sellers of around 450 crores, with addition of around 4000 new contracts. Stock Options has not seen any major action during yesterday’s trading.

What’s Next?
The markets are likely to remain under pressure for a day-or-two. As discussed on yesterday''s blog, we have seen a break out yesterday on the downside. The strong support for Nifty stands at around 4350-4400 range. If this level gets broken, then we might see next support coming at around 4280.

On the upside, we have lots of ground to cover upon. An intermediate resistance might be found at around 4500-4525. But there is strong resistance at around 4600 which would be a tough nut to crack.

Hence, the advice for the traders is to go long on Nifty with stop-loss at 4360. On the upside, one may book profits at around 4500-4530.

Stock Views
Yesterday’s fall led to stop-losses being hit on buy recommendations for United Phosphorous and India Infoline, while sell recommendations for Welspun Gujarat and Amtek Auto hit its target prices. The Options strategy discussed yesterday also reached its target price.

Few new stocks views that look interesting are given below:

Scrip Name – Buy/Sell – Recommended Price – Target Price – Stop Loss Price
Eveready – Buy – 37 – 41- 34
IRB – Buy – 127 – 140- 118
Bombay Dyeing – Sell – 363 – 330 – 385
BRFL – Sell – 228 – 210 – 240

Wishing you a great trading day today!!

Equity and Options Ideas for 8th June 2009

2009-06-07T18:09:00.000-07:00

Last Week Snapshot
Indian stock markets had a good week last week with benchmark indices gained by almost 3.5% each. The week clearly belonged to some of the stocks from liquid universe like Suzlon, Unitech, IFCI, JPHydro, Ispat, etc which have gained more than 20% in a week's trading.

What's Next?
Now, what's next is the biggest question? The markets have now been standing at the threshold level of the breakout, on either side of the spectrum. P/E for the sensex have been around 18 X (times) which is not cheap. Hence, the current valuations justify a correction. While on the other side, liquidity conditions, increase in risk-appetite and low interest regime favors further upside in the market.

My view goes for former i.e., correction overdue for a simple logic of risk-vs-reward. The reward on the upside is limited to 10-15% maximum. We can't see markets re-climbing 21000 levels again very soon. While on the downside, a test to 12000 levels on Sensex looks reasonable.

Hence, I would suggest if one can partially book their profits and stay in cash for the next two months. Or, one may selectively put the money in selected fundamental stocks like NTPC, Power Grid, Sun Pharma, Cipla, etc which are less volatile and give less pain on the downside.

FII View
FII on Friday had been bullish on the Indian stock markets. In the cash segment, FII made net purchases of 832 crores. Top Gainers on Nifty include selective stocks like Hero Honda, Grasim, BHEL, Infosys, while top losers include ITC, Suzlon, Rel Infra, SBI and Reliance Power.

In the Index futures segment, FIIs made net purchases of Rs. 1100 crores. The strange part here is that on Thursday, FIIs made net sell of 1100 crores again, with addition of 40000 new contracts. This completely reverse strategy on Friday is suprising and shows some complex trading strategy coming into play.

In the Index Options segment, FIIs made net purchases of 90 crores, with addition of around 28000 new contracts. Stocks Futures and Options didi not see much activity on Friday.

Overall, the markets look into wait-and-watch mode. It is waiting for some definite clues to take further direction from hereon. Hence, I would perceive a short term breakout this week, with increase in volatility. Hence, one is advised to adopt a strangle strategy of buying both Calls and Puts for Nifty. The premiums have been attractive at the moment for some of the contracts. (These are given below in Stocks View section)

Stocks Views
Gelnmark Pharma (suggested on 3rd June) hit its target price of 263. It is now likely to fall back to 240 levels. The remaining calls are still intact. There have been two new additions on stocks views which are given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
JM Financial - Buy - 60.5 - 71 - 55
Sesa Goa - Sell - 159.35 - 145 - 169

Option Strategy - Buy Nifty 4800 Call and 4600 Put - this pair would cost around 250 Rs *50 = Rs. 12500, but can give good returns, if markets see any breakout this week. The strategy is only applicable for next 2 weeks.

Wishing you a great week ahead!!

Equity and Option Ideas for 5th June

2009-06-04T17:17:00.000-07:00

Point of Introspection has arrived
Indian stock markets, it seems, is living in an euphoria of economic re-growth and no levels are unreachable for us. Yesterday, our markets closed above the psycological levels of 15000 on Sensex, which should be celebrated by investors with a bottle of profit booking.

The point which I would like to convey here is that if you have any holdings that is giving you some profits, then you must book around 40% of the profits at the current levels. If markets gain further 10% from the current levels, then book another 40% and stay out of market then.

The valuations are extremely high for some of the stocks in the markets and yet they are gaining with each passing day. In the midst of such euphoria, one must move out and celebrate with lesser portfolio and more cash.

FII View
FII in yesterday's trading bought the equities worth 400 crores, which is encouraging. But the derivatives data indicate somewhat grim picture.In the Index futures segment, FIIs were net sellers of around 1000 crores with addition of about 40000 new contracts. Most of these shorting are observed in Nifty segment. In the Index Options segment, they were net buyers of around 500 crores with addition of 17000 contracts approximately.

The stock segment indicates somewhat similar picture. In the stock futures segment, FII made net sell of 670 crores, with addition of about 5000 new contracts. Similarly, Stock Options segment saw net selling of 38 crores.

The given data indicates the near term bearish outlook on the stock markets. Indian stock markets are living in euphoria largely created by operators which are manipulating the stocks and taking them to extreme valuations.

Hence, the advice here would be to stay out, if you don’t have many open positions and rather book the partial profits, if you have some existing open positions.

Stocks Views
The stock ideas discussed in last few days have remain intact. Two new recommendations for the day are as follows:

Scrip Name – Buy / Sell – Recommended Price – Target Price – Stop Loss Price
GHCL – Buy – 51 – 57 – 43
SELMCL – 81 – 75.5 – 87

Wishing you a great day ahead!!

Equity and Options Ideas for 4th june 2009

2009-06-03T18:02:00.000-07:00

Yesterday's Highlights
Indian Stock Markets had a volatile session on Wednesday. The early morning trades took the benchmark index Sensex to 15000 levels, from where a sharp selling took down the index to a negative territory. The last half an hour again saw stocks rebounding and finally closing the day almost flat.

If we analyze the trend for last one month closely, we see markets making a sharp upmove of 3-4% and then stay there for next 2-3 days. Then it makes a customary dip and again rebound to make another upmove of 3-4%.

Now, whether the same trend would follow this time around as well or not, is yet to be ascertained, since this time around we are at critical levels on indices. Sensex is sitting at the threshold of 15000 levels, which is around 55% of the recovery from its lows of 8000. The fundamental valuations do not justfy further rally, but sentiments might push indices to entire new valuations.

Henceforth, it is essential to trade cautiously for a time being. Keep stop-losses and target prices in mind, and follow them religiously.

FII View
FII in cash segment have made net purchases of 33 crores, which indicates the readiness to buy at current levels as well. In the derivatives segment though, figures are a bit disturbing.

In the Index futures segment, FII made net purchases of 380 crores, but they have closed ou almost 7% of their open positions (approx 37000 contracts). It indicates that the institutions have closed their long positions, anticipating limited or no further upside from the current levels.

In the Index Options segment, FII made net sell of around 40 crores, with addition of 60000 new contracts. While analyzing the Nifty Call and Put options, it is observed that they might be selling far call and put options, as premiums have reduced for both of them. It is done with a view that upside / downside is limited from the current levels.

In the stock futures, FII were net sellers of 300 crores with addition of 7000 new contracts. Here also, the view is of limited upside.

Overall, the cues indicate limited upside in the markets from the current levels. As recommended yesterday as well, one can sell the Nifty index at around 4600 levels, with stop-loss of 4660 and targets of 4500 levels.

For today, one may sell Nifty at around 4560 with a target of 4500 and stop-loss of 4620.

Stocks Views
We are not seeing any sector-specific action for last few days and selected stocks on the basis of speculation are seeing make sharp moves. This is due to lack of clear direction in the overall index from hereon.

Few stock ideas that I would like to share are as follows:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Welspun Gujarat - Sell - 235 - 205 - 254
Glenmark Pharma - Buy - 244 - 263 - 220
United Phosphorous - Buy - 175 - 195 - 160
India Infoline - Buy - 153 - 175 - 145
3iinfotech - Sell - 87 - 73 - 102

Wishing you a great day ahead!!

Equity and Options Ideas for 3rd June 2009

2009-06-02T17:18:00.000-07:00

Yesterday's Highlights

It has been a choppy session for the Indian stock markets. The benchmark indices - Nifty and Sensex moved within a range and finally closing the day almost flat. Among the top gainers were Tata Steel, HCL Tech, HDFC and Tata Motors. Among the losers were ACC, Ranbaxy, REL and Tata Power. There has been no sector specific action during the day, as reflected in Top gainers and losers. It indicates that markets are now finding cues for the next move.

Overnight, Dow Jones has also closed flat. Though, the Home Sales data is encouraging, but concerns about valuations of financia stocks, put the index in check.

Hence, we might see a lacklustre session for Indian stock markets today. There could be some stock-specific action taking place, on the backdrop of budget which is scheduled in first week of the next month. There has been some rally going on in fertilizer space, on the anticipation of some positive announcements in the budget. One can trade in these stocks with strict stop-losses and target prices.

FII View

FII on Tuesday, were seen booking their profits and hedging their open positions. In the cash segment, FIIs were net sellers of around 233 crores.

In the Index futures segment, FIIs were net sellers of 427 crores, adding around 6000 new contracts. This indicates fresh build-up on the short side. In the Inde Options segment, FIIs were net sellers of 250 crores. On analyzing the Nifty Options, it is observed that premium for both Calls and Puts have reduced. It indicates that FIIs may be viewing a range-bound sessions in the days ahead.

In the stocks futures segment, FIIs were again net sellers of 80 crores, adding 7000 new contracts. It again indicates fresh build-up on short side. In the stocks options, we have seen unusually high activity. In this segment, FII were net buyers of 110 crores with addition of 4000 new contracts. This might be done to hedge their short derivative positions in the futures side.

Note! One good quality that every trader must learn from the institutions is to adopt a habit of hedging. If such big institutions, despite having huge chunks of funds to support their positions, do hedge their positions, in order to avoid heavy losses, then why can't traders like us do the same. It is a statement of introspection that we all must think about.

In the trading world, there are two ways to limit your losses. Either put a stop-loss or hedge your positions. Your stop-losses might trigger a few times, but soon you will realize the importance of it when you see same stocks moving in either of the directions sharply.

Anyways, the outlook for the day seems like a range-bound market with a bit of negative bias. We might see Sensex attempting to touch 15000 mark during the day. My experience says that we might see selling pressure coming at 15000-15200 levels or around 4600 on Nifty. Hence, the advise is to short Nifty at around 4600 levels with a target price of 4500 and stop-loss of 4660.

Stocks Views

Among the stocks, none of them hit their target price or stop loss yesterday. Few new ideas are given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price

Jindal Holdings - Long term Buy - 610 - 780 - 520

FDC - Long Term Buy - 41.5 - 53 - 34

Orbit Corp - Sell - 211 - 180 - 240

Wishing you a great trading day ahead!!

Equity and Options Ideas for 2nd June 2009

2009-06-01T09:30:00.000-07:00

Today's Snapshot

Today was a range-bound day for the Indian stock markets. Though, the markets remained in green, but some selling pressure was seen in various stocks. Again, the gainers of the day include Suzlon, Unitech and othe beaten down stocks. For these stocks, it has been a great 2-3 months where the stocks have appreciated by more than 2-3 times.

Mid-cap stocks again stole the limelight, gaining more than 3% during the current day's trading. Several stocks, especially in Hotel space like Hotel leela, Taj GVk hotel, etc have gained a lot during today's trading.

In the nutshell, the heroes of the day are the mid-cap stocks which keep the current rally going. But will these euphoria last or sustain itself, is yet to be seen in the coming days. My experience suggest a correction around 15000 levels in Sensex and 4600 levels in Nifty.

FII View

FII View has been a largely muted one. In the futures segment, they have again be a net buyers of around 400 crores with no major change in Open positions. In the Index options segment, the institutions were net buyers of 200 crores with an addition of around 22000 contracts. Nifty 4400 and 4500 Puts have seen good build-up in Open Interest.

In the stocks futures segment, FIIs were net sellers of 300 crores, with addition of 5000 contracts. No major action was seen in Stocks Options segment.

FIIs data indicates they have been going hedge on their short-term positions. Build-up in near Put options, indicate some correction coming into the Indian markets. Hence, the advise is to book profits on Open positions. The risk-takers can sell 4700 Nifty call and 4300 Nifty Put, with a view that markets may remaing in range-boun territory.

Stocks Ideas

With markets in such wild swing, no major stock ideas are seen. Two ideas that I have gathered till now include:

Scrip Name - Buy/Sell - Recommended Price - target price - stop loss price

3iInfotech - Sell - 87 -72-102

Amtek Auto - Sell - 162 - 142 - 175

Wishing you a great trading day tomorrow!!

Equity and Options Ideas for 27th May 2009

2009-05-26T18:09:00.000-07:00

Day's Highlights
As discussed in yesterday's blog, markets looked in an overbought situation and likely correction was imminent. The markets ended the day in red with benchmark indices - Nifty and Sensex closed down 3% each. Mid-cap space which has seen a great bull rally till now, went down by 4.5% on account of profit booking, before expiry.

The major losers were the very same stocks that were among the top gainers on Monday. RCOM, Ranbaxy, Tata Communications were down by more than 7-8% on Tuesday. In the mid-cap space, momentum stocks like HDIL, IFCI, RNRL took severe beating down between 7-10%.

FII View
FII were again net sellers on Tuesday. They have sold stocks worth 200 crores in the cash segment, which indicates some kind of profit booking ahead of the May expiry.

F&O segment presents a worry picture. In the Index futures segment, FIIs were net sellers of more than 1200 crores, adding around 90000 new contracts. This indicates the massive selling from FIIs side in the futures market. Nifty June has seen maximum Open Interest build-up.

In the Index options, FIIs were net buyers of around 120 crores, adding 25000 new contracts. Traders who had sold Nifty 4000 Put for June were seen covering their positions, anticipating further downside in the market.

The overall trend indicates volaility in the market in the month of June. Nifty is likely to face strong support around 4100 level. If it is broken, then we might see the index finding strong support at 3980-4025 range which could be crucial. If this level is broken on closing basis, then we might see a trend reversal.

On the upside, Nifty is likely to face moderate resistance at 4200. Nifty around 4280 can provide a strong resistance. Hence, the traders are advised to go long on Nifty around 4080-4100 with a stop-loss of 3980.

Alternatively, traders can short Nifty around 4210 with a stop-loss of 4260.

Stocks Views
India Infoline yesterday hit its target price of 128 Rs on the downside. Some new stock ideas are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Edelweiss - Buy - 380 - 435 - 330
PFC - Buy - 181 - 195 - 170
Jindal Steel - Buy - 1940 - 2170 - 1880
Renuka Sugars - Sell - 129 - 121 - 136.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 26th May 2009

2009-05-25T18:26:00.000-07:00

Yesterday Recap
The nice bull run continues in the market on Monday as well. although, the index would not reflect the same, but if we see some individual stocks making a run, I am sure even it can beat an 100 meter sprint runner.

Mid-cap and small-cap have been performing exceptionally well over the last few days. It seems these stocks have been catching up with the large cap space, in terms of valuations and returns. Both Mid-cap and small-cap index was up more than 2% yesterday. The retail participation in these stocks have also increased, which is ably supported by the institutional activity in these stocks.

Though, the concerns still remain strong. If we closely analyze some of the bulk deals that have happened in the last few days, we may realize that Foreign Institutional Investors have been making lot many sell deals, with domestic institutions or selling the shares in the open market. (You may view bulk deals in www.nseindia.com --> Equity --> Bulk Deals)

Henceforth, concerns on the current valuations are strong in the mid-cap space. We must not forget that we haven't even seen one quarter of strong earnings in the mid-cap companies and yet we are optimistic that everything would become normal now.

FII View
FII on Monday have been net buyers of Rs. 450 crores in the cash segment. In Index Futures segment, they are net sellers by 750 crores, adding 3000 new contracts. This might be done to hedge their positions in the cash segment. Similarly in Options segment, they were net sellers by 70 crores, adding 35000 new contracts. One has seen maximum Open Interest build-up in 4000 Nifty Puts and 4500 Nifty Calls for June. It indicates a range-bound for the markets in the coming month.

Henceforth, we may see a range-bound market for a while. Markets may see making a volatile movement on either side after the expiry on Thursday. Hence, the traders who are willing to take risks can sell Nifty 4500 Calls and 4000 Puts for June. This will fetch them the premium of around 200 Rs. The traders who trade in the cash segment can pick selected blue-chip stocks from IT, Infrastructure and Finance segments.

Stocks Views
The stocks discussed yesterday remain intact and can be carried forward for today as well. Another stock that can be purchased with a long-term perspective is Godrej Consumer Products (GCP) at around 150 Rs. It is currently trading at 160 Rs. This is with a long-term perspective.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 25th May2009

2009-05-24T17:03:00.000-07:00

Weekly Highlights
It has been a memorable week for the Indian Stock markets. We have seen indices hitting their first upper circuit on Monday, and finally closing the day with tremendous gains of 17%. Since then, markets have been trying to build a new base for themselves around the current levels.

All the major stocks went up, especially related to finance and infrastructure. Several PSU stocks have also gone up in an anticipation that the government will now allow them to disinvest to raise the money, much needed for the expansion. Infrastructure sector too, is hoping to get some kind of commitment from the government to help them tide over the current recession.

It is now remain to see whether Dr. Manmohan Singh will be able to justify its pro-reform image. Last 5 years have been no show for Mr. Singh due to Left hardcore stance on various reforms. Now, when he has got the complete majority without Left in its stride, markets are hoping that Prime Minister will be able to bring reforms into the various sectors and help them sustain and grow, amidst the current slowdown.

FII View
On friday, FIIs were suprise net sellers in the cash segment by 750 crores. Despite this negative statistics, the markets closed strong on Friday with gains of around 3 quarters of a percent. DIIs, which were sitting on the sidelines till now, bought the stocks worth 400 crores on Friday.

In the derivatives segment too, FIIs looked bearish. They have sold Index futures worth Rs. 350 crores and increased their open positions by 30000 contracts. In the Index Options side, FIIs were net sellers of Rs. 35 crores and increased their open positions by 45000 contracts. These high numbers are due to rollover being done from May to June contracts. Also, the premium on Puts were reduced to almost half for some contracts, which also indicates that their view on the downside is also limited.

In the stock futures side, FIIs were again net sellers of Rs. 350 crores with addition of about 2500 new contracts. This could again be done to hedge their open positions in the stocks segment.

Overall, the view for the markets is of a range-bound with a negative bias. The volatility in the markets are likely to increase as markets would like to speculate on various policies that this government is likely to build before the budget.

Also, the markets are likely to follow the global cues from now on where we have seen Dow Jones facing a stiff resistance around the current levels. If any negative news come from US, we might see our markets are too facing a downtrend.

Another crucial factor for this week is the announcement of Annual GDP data by RBI on Tuesday / Wednesday. If GDP comes below 5%, we might see a sentimental hit on the bourses.

Stocks Views
Out of stocks discussed on Thursday, both of them hit their stop-losses and then came down to their target levels. This is due to the high volatility prevalant in the markets at the moment.

The new stock ideas are as follows:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
SCI - Long Term Buy - 115 - 160 - 90
Federal Bank - Sell - 234 - 204 - 246
India Infoline - Sell - 141 - 128 - 148
LIC Housing Finance - Sell - 438 - 405 - 460

Wishing you a great week ahead!!

Equity and Options Ideas for the week

2009-05-20T17:31:00.000-07:00

Elections Impact
Last one week has been unprecedented for the Indian stock markets. We are now in entirely new range, in terms of stock prices and indices levels. Nobody knows how realistic these levels are, especially when the base of current rise is a political one.

The markets are hoping of a faster turnaround in the economy due to pro-reform view of Congress. Manmohan Singh, being an elite economist, himself is likely to push the reform process on a faster track, which marks the basis of the current rise.

The current rise is likely to continue till the interim budget / vote on account, when we see first real test of the new government to actually bring back the reform process on track.

Though, we should not forget the bargains that allies would be wanting. Mamta Banerjee is already talking about Minimum Common Program and fear do exists that she may ask to bring some legislation on the land takeover policies of the government for SEZ, since, her rise in Bengal was more on account of her pro-poor image shown at the time of Tata plant in Singur. So, tussle would still be there, albeit with less pressure.

Yesterday's Highlights
Yesterday was a volatile day for the Indian stock markets. Mid-cap space which was struggling on Tuesday, made a tremendous comeback yesterday. Nifty mid-cap index was up by 8% on Wednesday, which is good, but also a sense of worry.

In the large cap, we have seen unwinding happening in various stocks, especially ADAG stocks (Reliance Capital and RCOM). DLF which rose by 22% on Tuesday corrected a bit yesterday.

FII View
FIIs sold heavily in both cash and F&O market on Wednesday. In the cash segment, FIIs sold stocks worth 900 crores, booking the gains. In the index futures too, they booked profits, by selling the contracts worth 900 crores again. The number of open contracts also decreased by 27000 (approx 4% of their open positions) which indicates the profit booking in futures side by them.

In the index options segment, FIIs have again been net sellers by 850 crores, with approx 5000 contracts adding in their kitty. We have seen some serious selling happening in out-of-the-money calls with their premium shrinking by 50%.

In the stock futures side, FIIs have been net sellers of more than 1700 crores (quite a large figure) adding 25000 contracts (approx 5%). This is an area of concern and looks more than a hedging activity.

Overall, we might see a day or two of unwinding happening into the Indian markets, even though with a limited downside. We may see some support coming in around 4150-4200 in the Nifty. If this level breaches, the next level could be 4020-4000 which is again a sentimental level for the bourses.

On the upside, 4300-4320 provides a moderate resistance. The next support level is a strong one at 4400 where we might see strong selling pressure coming in the markets.

Hence, the advice to the traders is to book profits, if they have any outstanding position. Those who wish to speculate can go short on Nifty around 4280-4300 with a target levels of 4200 and stop loss of 4360.

Stock View
Quite Simple, all the buy recommendations were hit during the last week run while sell positions hit the stop-loss levels :)

The new stock ideas are as follows:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Federal Bank - Sell - 245 - 223 - 255
RCOM - Sell - 312 - 289 - 326

Wishing you a great trading day ahead!!

Equity and Options Ideas for 15th May

2009-05-14T17:57:00.000-07:00

Highlights of the day
One of the characteristics of Thursday trading in Indian equity markets have been the volatility. After opening 2% lower, markets seem to recovered during early trades, before selling pressure took them back to the lows of the day. Later during afternoon trades, markets finally recovered a bit to close the day 1% down.

The reason behind this uncertainty are the elections results, due to be announced on Saturday. Though, the encouraging factor for the markets are the strong buying support of the FIIs, despite uncertain political scenario. This indicates that somewhere down the line, FIIs are optimistic about continuation of reforms process with both NDA and UPA. Hence, till the time, we don't get the major shock on Saturday, things look really optimistic at the fundamental level.

Another speculation going around in the market is the possible crash of the markets post-elections. This speculation has risen from the past records which indicate that markets have usually fallen after the elections.

While we may see some profit-booking happening in the markets, but complete meltdown of the markets is unlikely post-elections. This is because of the fact that markets this time, have risen on the backdrop of global factors, rather than domestic cues. Thus, chances of complete wash-out are minimal.

FII View
FII on Thursday, traded on the sell side largely. In the cash segment, they were net sellers of 350 crores, mostly in large-caps. Not much pressure was seen in the mid-cap space. Mid-cap index in NSE has risen by 1% on Thursday, indicating the continuation of bull rally in the mid-cap space till now.

In the futures segment, FIIs were net sellers of around 500 crores with addition of about 10000 contracts. This might be done to hedge their open positions lying in the cash segment.

Similarly, in the Index Options segment, FIIs were net buyers of 300 crores with addition of 80000 contracts. We have seen some call writing happening in the higher Nifty calls of 3800, 3900 and 4000. This is usually done with a view of limited upside in the markets.

Stock Futures and Options didn't see much action on Thursday.

Hence, traders are advised to hedge their open positions, as markets may show some irrational excuberance in the coming 2-3 days. Those who are willing to take risks can go long on the index at around 3550 with a target of around 3700. One may put out a stop-loss @ 3490 for the same as well.

Stock Ideas
In this fluid market conditions, the stocks are showing irrational behavior and hence, one is advised to maintain strict targets and stop-losses. Few stock ideas that look interesting are given below:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss Price
Cairns India - Sell - 197 - 183.5 - 205
DCB - Buy - 25.5 - 28 - 22.5
Great Offshore - Buy - 276 - 323 - 258

All the options strategies discussed earlier are in profit and hence, are advised to close them by today itself.

Wishing you a great trading day ahead!!

Equity and Options Ideas for 13th May 2009

2009-05-12T18:22:00.000-07:00

Highlights of the day
Indian stock markets had have a great run on Tuesday, outperforming virtually every benchmark index globally. This phenomenal rise attributes to the buying done by FIIs and DIIs who have together mopped up more than 600 crores of equities. In the derivatives segment too, FIIs seem covered their short positions, indicating further upside in the bourses.

The major sectors that have gained in yesterday's trading include IT and Banking space, both gaining more than 4.5% each. Though, the word of caution is the IIP numbers which have shown weakness coming in the Indian economy.

Today's Outlook
Markets are likely to make a renewed attempt to cross major resistance levels of 3800 on Nifty and 12500 on Sensex, though, cues globally are muted and cautious. Dow Jones dwindled around 8500 mark overnight, finally closing 0.5% up, while Asia opened weak today morning.

Hence, markets are likely to remain volatile. It may try to create a base around 3700-3800 before latching to 4000 mark on Nifty post-election results. This is the best time to play strangle strategy in Options by buying 4000 Call and 3600 Put at the same time. One may expected to get some returns on this strategy, post-election.

Stocks Views
Yesterday, alok Textiles hit its stop-loss level. Rest remain intact. Stock Ideas for today are:

Scrip Name - Buy/Sell - Recommended Price - Target Price - Stop Loss
Aditya Birla Nuvo - Buy - 511 - 540 - 480
Aurbindo Pharma - Sell - 295 - 280 - 305
NIIT Limited - Buy - 30.5 - 32 - 29

Wishing you a great trading day ahead!!