Friday, December 4, 2009

Market Outlook 4th Dec 2009

INTRADAY calls for 04th Dec 2009
Buy Polaris-191 for 196-198+ with sl 186
Buy Indiacem-116 for 124-126+ with sl 112
Buy Hexaware-96 for 102-106+ with sl 93
Buy JKPaper-44 for 50-52+ with sl 41[positional]

Strong & Weak futures
This is list of 10 strong futures:

McDowell-N, Hind Zinc, Ranbaxy, Orchid Chem, Dena Bank, Jindal Saw, Recltd, Polaris, Indusind Bank & Tata Motors.
And this is list of 10 Weak futures:
Rel Infra, Punj Lloyd, EKC, India Info, Abb Ltd, Hind Uni Lvr, Purva, Great Offshore, Aban Off shore & Sterling Biotech.
Nifty is in Up trend

NIFTY FUTURES (F & O):
Below 5105 level, expect profit booking up to 5093-5095 zone and thereafter slide may continue up to 5074-5076 zone by non-stop.

Hurdles at 5142 & 5144 levels. Above these levels, rally may continue up to 5173-5175 zone and thereafter expect a jump up to 5192-5194 zone by non-stop.

Cross above 5202-5204 zone, can take it up to 5221-5223 zone by non-stop. Supply expected at around this zone and have caution.

On Negative Side, rebound expected at around 5065-5067 zone. Stop Loss at 5046-5048 zone.

Short-Term Investors:
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.

Today's Expectation:
SGX NIFTY trading at 5110.50 (08.17 AM) now.

This trend is surprising & Negative too. If this downtrend continues, then it may continue for 1 (or) 2 Days.

If short covering starts, then it may continue 1 Week, 1 Month, 3 Months (or) even 1 Year.

BSE SENSEX:
Below 17118 level, expect profit booking up to 17087-17089 zone and thereafter slide may continue up to 17029-17031 zone by non-stop.

Hurdles at 17196 & 17255 levels. Above these levels, rally may continue up to 17284-17286 zone and thereafter expect a jump up to 17342-17344 zone by non-stop.


Cross above 17371-17373 zone, can take it up to 17430-17432 zone by non-stop. Supply expected at around this zone and have caution.


On Negative Side, rebound expected at around 17000-17002 zone. Stop Loss at 16941-16943 zone.

Short-Term Investors:
Bullish Trend. Target at 18226.48.
Stop Loss at 16210.44.

CNX BANK INDEX (F&O):
Below 9315 level, expect profit booking up to 9254-9256 zone and thereafter slide may continue up to 9214-9216 zone by non-stop.
Hurdles at 9342 & 9375 levels. Above these levels, rally may continue up to 9395-9397 zone and thereafter expect a jump up to 9434-9436 zone by non-stop.

Cross above 9454-9456 zone, can take it up to 9494-9496 zone by non-stop. Supply expected at around this zone and have caution.

On Negative Side, rebound expected at around 9194-9196 zone. Stop Loss at 9155-9157 zone.

Short-Term Investors:
Bullish Trend. Stop Loss at 8550.00.
Up Side Target at 9996.00.

POSITIONAL BUY:
MPHASIS (NSE Cash)

Explosive scrip & any time it will take off.

If crosses & sustains above 706 & 710 levels, then rally may continue up to 740 level and thereafter expect a jump up to 746-748 zone by non-stop.

Support is too far at down side and at around 670 level. Below 670 level, expect profit booking up to 665 level.


MARUTI SUZUKI (NSE Cash)
Explosive scrip & it will take off any time.


If crosses & sustains above 1652 & 1662 levels, then rally may continue up to 1682 level and thereafter expect a jump up to 1691-1693 zone by non-stop.


Support is too far at down side and at around 1623 level. Below 1623 level, expect profit booking up to 1612 level.


JET AIRWAYS (NSE Cash)
Technically Bullish Scrip. Recommended to Book Profits.


If crosses & sustains above 606 level, then rally may continue up to 618 level by non-stop.


Support is too far at down side and at around 551 level. Below 551 level, expect profit booking up to 539 level.

EDUCOMP SOLUTIONS (NSE Cash)
Weak scrip & any time it wil fall any time.


If breaks & sustains below 737 & 740 levels, then fall may continue up to 727 level and thereafter expect a slide up to 720-722 zone by non-stop.


Hurdle is too far at upper side and at around 755 level. Above 755 level, expect short covering up to 758 level.

STOCK OPTIONS (NSE):
TATASTEEL CALL OPTION (580 Strike Price).

Technically Bullish. But bulls may lose control.


Above 32 level, it can zoom up to 33 level by non-stop.


Support at 24 level. Below 24 level, expect unwinding up to 18 level and thereafter panic may continue up to 14-16 zone by non-stop.

DLF CALL OPTION (400 Strike Price).
Technically Bullish. But bulls may lose control.


Above 16 level, it can zoom up to 18 level by non-stop.


Support at 13 level. Below 13 level, expect unwinding up to 11 level and thereafter panic may continue up to 7-9 zone by non-stop.

STOCK FUTURES (NSE):
SESAGOA FUTURES:

Technically Bullish.
Above 383 level, it can zoom up to 396 level by non-stop.

Support at 365 level. Below 365 level, expect unwinding up to 359 level.

HDIL FUTURES:
Technically Bullish.


Above 355 level, it can zoom up to 360 level by non-stop.


Support at 345 level. Below 345 level, expect unwinding up to 344 level.


Aban Offshore-Buy with a price objective of Rs 1740


With a forecast earnings of Rs 300 per share for FY11, Aban Offshore trades at 4.4 times just one year forward. Some of the most respected names in the industry are ready to give the stock another chance, and yet it is down 74 per cent from it's peak. So if we assume all research is a hoax, then why don't the shorts move in for the kill?

Here are some of the reasons:

Recovery in Crude
In dynamic conditions it is difficult to visualise crude will stick to $ 78 a bbl forever. If it can move to $ 30 this March, it had also moved to $ 147 in May 2008. Either possibility still exists, but if the World at large grows then higher crude will automatically translate into higher rig rates and higher fleet utilisation for Aban.

Visible Revenues

Aban is in that sweet spot of the crude industry where oil find or no oil-find, the rig owner draws in his rental. During Q2 FY10 Aban contracted 6 vessels on long term leases, leaving a mere 3 rigs that seek drillers. This implies strong revenue visibility for the near term. 100 per cent of H2FY10 and 75 per cent of FY11 projected revenues are from the existing contracts. More importantly, better business conditions will imply close to 95 per cent fleet utilisation in FY11.

A Part of the Funding is in place, more may come from a listing of Aban Singapore

Aban recently raised $ 150 mn through a QIP at Rs 1225 a share. In addition, it will earn close to Rs 2000 crore in cash profits for FY10. Add to this, the planned inflow of $ 400 mn through a listing of Aban Offshore's Singapore subsidiary. Cash inflows of roughly $ 1 bn will take care of operational needs as well as substantially lower the roughly $ 2 bn of debt that Aban carries.

Valuations are way off-benchmarks

Global deep sea drillers like Transocean Global fetch near term PEs of 10. Aban fetches near term PE of 4. If Aban begins to fetch even median PEs of 6 the stock will trade over Rs 1800 in no time and possibly regain it's previous high of Rs 5000 per share by early CY11.

The call for the shorts and conversely for the longs is what to believe. After all Aban had Sell reports at Rs 200 in March 2009 and has a huge number of BUY reports at Rs 1200-Rs 1300. If we trust the bulls, the bears in the Aban stock are likely to get crushed rather dramatically, if even for speculation sake, the remaining 3 Rigs get hired by Ongc, Cairn, Oil India or Reliance for NELP VIII blocks.

It is not inconceivable, but what we need to go long is simple conviction.

(Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.)

--
Arvind Parekh
+ 91 98432 32381