Market Outlook 9th Feb 2010

	5124.00	( 0.69 %)	35.30
		1	2	3
Resistance		5150.02	5176.03	5204.97
Support		5095.07	5066.13	5040.12

	17102.60		( 0.64 %)	108.11
			1	2	3
Resistance			17181.79	17260.99	17334.42
Support			17029.16	16955.73	16876.53

Strong & Weak Stocks

This is list of 10 strong stocks:  

Sterling Biotech, Sesa Goa, Hero Honda, JSW Steel, Siemens, Mcdowell-N, Purva, Allahabad Bank, Orient Bank & Triveni. 

And this is list of 10 Weak Stocks: 

Bajaj Hind, Mphasis, Chambal Fert, BPCL, Tech Mahindra, Tulip, Tata Comm, ICSA, Nagarjuna Fertil & Balrampur Chini.

Nifty is in Up trend  

NIFTY FUTURES (F & O): 

Below 5105 level, expect profit booking up to 5098-5100 zone and thereafter slide may

continue up to 5083-5085 zone by non-stop. 

Hurdle at 5120-5122 zone. Above this zone, rally may continue up to 5127 level and thereafter expect a jump up to 5135-5137 zone by non-stop. 

Cross above 5160-5162 zone, can take it up to 5175-5177 zone by non-stop. Supply expected at around this zone and have caution. 

On Negative Side, rebound expected at around 5058-5060 zone. Stop Loss at 5043-5045 zone.

Short-Term Investors:

Bullish Trend. 

Up Side Target at 5239.70. 

Stop Loss at 5050.30.

Equity:

ICICIBANK (NSE Cash) 

This scrip went up on Yesterday. Narrowly missed the target. Uptrend should continue today also. 

Buy for Intra-Day Gains with a Target of 959 level. 

Stop Loss at 907 level.

ABAN (NSE Cash) 

This scrip should have been gone down on yesterday. Instead, gained & It was a surprise. Uptrend should continue today also. 

Buy for Intra-Day Gains with a Target of 1375 level. 

Stop Loss at 1251 level.

ARSSINFRA (NSE Cash) 

This scrip should have been gone down on yesterday. Instead, gained & It was a surprise. Uptrend should continue today also. 

Buy for Intra-Day Gains with a Target of 829 level. 

Stop Loss at 778 level.

 

RECLTD (NSE Cash): 

 Bulls may get trapped at higher levels during intra-day trades today. Expect Positive News within 2 days. 

AXISBANK (NSE Cash):  

Bulls may get trapped at higher levels during intra-day trades today. Expect Negative News within 2 days.  

JAGRAN (NSE Cash): 

Bulls may get trapped at higher levels during intra-day trades today. Expect Negative News within 2 days.  

ABGSHIP (NSE Cash): 

Bulls may get trapped at higher levels during intra-day trades today. Expect Positive News within 10 days. 

CANBK (NSE Cash):  

Bulls may get trapped at higher levels during intra-day trades today. Expect Positive News within 2 days.

OPTIONS (NSE):

NIFTY 5100  CALL OPTION 

Should have been closed negatively on Yesterday. Positive Closing too. Uptrend should continue. 

If buying continues, then it can zoom up to 105 level by non-stop. 

If profit booking starts, then expect a slide up to 61.20 level by non-stop.

AMBUJACEM 115 CALL OPTION 

Rally expected on Yesterday & Bulls beaten expectations. Uptrend should continue today also. 

If Rally continues, then it may continue up to 5.65 level. 

If Profit Booking starts, then it can tumble up to 0.85 level by non-stop and have caution.

STOCK FUTURES (NSE):

LITL FUTURES 

Should have been fallen yesterday. Gained & Bulls dominated. Uptrend should continue today. 

 

Buy with a Stop Loss of 49.40 level for Intra-Day Gains. Target at 55.80 level.

ESSAROIL FUTURES 

Uptrend expected on Yesterday & Bulls fell short of expectations. Uptrend may continue today also & even up to 12.03.2010. 

Buy with a Stop Loss of 141 level with a Target of 169 level. It may zoom even up to 185 level on (or) before 12.03.2010. 

Stop Loss on (or) before 12.03.2010 should be at 133 level.

INVESTMENT VIEW

Hitachi Home-25 Glorious Years In India; Attaining Next Stage Of Growth 

BSE: 523398

Hitachi Home: Inspire The Next 

-Shares in issue 2.3 crore

-Market Cap-Rs 437 crore

-Ownership: 70 per cent Hitachi Japan

-Revenues (9M to December 2009)-Rs 483 crore

-PAT (9M to December 2009)-Rs 36 crore

-EPS (9M Non Annualised)-Rs 16

-PE on FY10 earnings-10

-A new plant set up near Ahmedabad raises manufacturing capacities for Air conditioners to 4.0 lakh per annum. 

-New plant at Kadi to produce large chillers used for Cold Chains, Industrial Refrigeration, Airports, Metro Stations taking out the seasonality from earnings. 

-New Range of Window and Split A/Cs and Refrigerations with lesser tonnage target India's rural belt, bringing in green technology and 5 star rated products to capture mass demand for energy saving refrigeration and cooling products. 

-Hitachi Japan enters it's Centennial Year, 25 years in India with a further resolve to expand and grow.

Among the first investors of Vibrant Gujarat Global Investors' Summit 2009 to open the plant.

The first Japanese company to set up a manufacturing facility post the Vibrant Gujarat initiative.

Enhancing production capacity by setting up a mega manufacturing facility.

Plans to manufacture large capacity Air conditioners (chillers) in it's new plant.

Expanding even during global slowdown.

Hitachi Home & Life Solutions (India) Ltd (HHLI), a subsidiary of Hitachi Appliance Inc, Japan, inaugurated its new air-conditioner manufacturing plant at Kadi (Gujarat) near Ahmedabad earlier in FY10.

This facility of Hitachi is the largest AC manufacturing facility in India and is the outcome of the Vibrant Gujarat Global Investors' Summit 2009 where HHLI signed an MOU to invest in Gujarat and is now amongst the first ones to accomplish the plant.

The new manufacturing facility is situated adjacent to the company's current plant at Kadi, 40 km. from Ahmedabad. The new plant would manufacture commercial air-conditioners including large air-conditioner Chiller plants, Ductable air-conditioners and Telecom Air conditioners. Currently Hitachi Chillers are being imported from Hitachi's factories outside India.

The new facility is spread on a plot of 85000 Sq. Mtr. with approximately 35000 Sq. Mtr. of Industrial shed, built in a record time of only 7 months. The total investment amounted to approx Rs. 50 cr. The plant is state of art and equipped with advanced machinery and testing labs. With its new plant the production capacity will increase to 4.0 lakh units per annum and company aims at minimum 10% increase in turnover.

In the financial year 2008-2009 HHLI had a turnover of Rs. 520 crore. It has two production units in India, Kadi,Gujarat & Jammu. Company's manufacturing facilities in India are among the ten Hitachi air-conditioner facilities worldwide. The total installed capacity is 250,000 units in a year.

Mr. Shinichi Iizuka, Managing Director says "Today, the Air Conditioning industry in India is witnessing increased expectations by the customers. Technology, designs, cooling capacity, energy efficiency & Service levels are seeing new highs. Our global experience helps us marry best of international standards and local needs to have excellence in products and services. Industry is progressing from premium product image to a diversified market due to changes in lifestyle and rapid economic growth.

Present on the occasion, Mr. Amit Doshi, Director, Corporate Affairs, HHLI shared "HHLI has recognized consumer behavioral changes and is now directing all the activities to meet their demands and create a distinctive Hitachi brand image. Last year when we took the decision to invest in a new manufacturing facility, the commercial air-conditioner market was de-growing due to global economic slowdown, but we have always believed in the Indian market and want to serve it with products made in India and more importantly, made for India, hence we will continue investing in expanding our manufacturing base in India."

HHLI operates in mass premium segment. It currently holds 7 % market share in room air-conditioner segment however it is No. 1 in premium segment category. In ductable commercial air-conditioner HHLI has 17% market share and in telecom tower air-conditioners category it enjoys leadership post ion with 28% market share. 

Hitachi was the first Japanese company to set up any manufacturing unit in India and is now the only company who is expanding its production facilities.

Hitachi is celebrating 25th year of cooling India and over the last year it has been able to achieve a significant growth. With encouraging growth prospects in Air Conditioner market and increasing demand of quality products, Hitachi Home & Life Solutions (India) Ltd. planned this investment in new manufacturing facility to move closer to its growing customer base, even during global economic slowdown.

 2010 will mark a significant milestone in Hitachi's worldwide history as centennial, 100 years of trust & appreciation. 

 

(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.)

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	08-Mar-2010	3284.26	2152.25	1132.01

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	08-Mar-2010	1309.36	1877.99	-568.63

Disclosure: I don't have any positions in the above said scrips & NIFTY FUTURES.

Disclaimer:

"I do not make any warranties, express or implied, as to results to be obtained from using the information in this e-letter.  Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report."

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 8th March 2010

8th MARCH derivatives EOD report on http://www.indiabulls.com/securities/mailermis/derivative-strategy/derivative-EOD-08-Mar-2010.htm

NIFTY FUTURES (F & O):

Above 5101 level, rally may continue up to 5120-5122 zone and thereafter expect a jump up to 5133-5135 zone by non-stop.

Support at 5068 & 5078 levels. Below these levels, expect profit booking up to 5060-5062 zone and thereafter slide may continue up to 5047-5049 zone by non-stop.

Buy if touches 5040-5042 zone. Stop Loss at 5028-5030 zone.

On Positive Side, cross above 5140-5142 zone can take it up to 5153-5155 zone by non-stop. If crosses & sustains this zone then uptrend may continue.

Short-Term Investors:

Bullish Trend.

Up Side Target at 5174.80.

Stop Loss at 4830.00.

Equity:

SUZLON (NSE Cash)

This scrip went up on Friday. It should have been gone up more & below expectations. Uptrend should continue today also.

Buy for Intra-Day Gains with a Target of 81.65 level.

Stop Loss at 77.65 level.

TATASTEEL (NSE Cash)

This scrip went up on Friday. It should have been gone up more & below expectations. Uptrend should continue today also.

Buy for Intra-Day Gains with a Target of 633 level.

Stop Loss at 602 level.

SBIN (NSE Cash)

This scrip went up on Friday. It should have been gone up more & below expectations. Uptrend should continue today also.

Buy for Intra-Day Gains with a Target of 2100 level.

Stop Loss at 2005 level.

BEL (NSE Cash):

Bulls may get trapped at higher levels during intra-day trades today. Expect Positive News within 7 days.

INFINITE (NSE Cash):

Bulls may get trapped at higher levels during intra-day trades today. Expect Negative News within 2 days.

RAYMOND (NSE Cash):

Bulls may get trapped at higher levels during intra-day trades today. Expect Positive News within 9 days.

APTECHT (NSE Cash):

Bulls may get trapped at higher levels during intra-day trades today. Expect Positive News within 3 days.

AREVAT&D (NSE Cash):

Bulls may get trapped at higher levels during intra-day trades today. Expect Negative News within 9 days.

OPTIONS (NSE):

NIFTY 5100 CALL OPTION

Should have been closed positively on Friday. Shockingly Bulls failed & closed negatively. Fall should continue.

If fall continues, then fall may continue up to 46.20 level by non-stop.

If short covering starts, then it can zoom up to 113.10 level by non-stop and have caution.

PETRONET 80 CALL OPTION

Should have fallen on Friday & Surprisingly it closed Positively. Uptrend should continue today also.

If Rally continues, then it may continue up to 4.35 level.

If Profit Booking starts, then it can tumble up to 0.85 level by non-stop and have caution.

STOCK FUTURES (NSE):

UNIPHOS FUTURES

Uptrend expected on Friday & Bulls beaten expectations. Uptrend should continue today.

Buy with a Stop Loss of 156 level for Intra-Day Gains. Target at 183 level.

DLF FUTURES

Bulls beaten expectations on Friday & Uptrend should continue today. Weekly Chart also indicates rally & But

Bulls may fell short of expectations later this week.

Buy with a Stop Loss of 307 level with a Target of 333 level. It may zoom even up to 354 level on (or) before 12.03.2010.

Stop Loss on (or) before 12.03.2010 should be at 287 level.

INDEX SPOT LEVELS FOR MONDAY 8th March

	5088.70	( 0.17 %)	8.45
		1	2	3
Resistance		5115.55	5142.40	5166.15
Support		5064.95	5041.20	5014.35

	16994.49		( 0.13 %)	22.79
			1	2	3
Resistance			17082.76	17171.03	17244.35
Support			16921.17	16847.85	16759.58

Strong & Weak Stocks for 8th March

This is list of 10 strong stocks :

Sesa Goa, Orient Bank , Purva, JSW Steel, Mcdowell-N, Sun TV, DCHL, Hero Honda, Canara Bank & Sterling Biotech.

And this is list of 10 Weak stocks:

Bajaj Hind, Chambal Fert, BPCL, Mphasis, ICSA, Tata Comm, Hind Petro, Tulip, Renuka & Pantaloon Retail.

Nifty is in Up trend

Gold: The Curse Of The Incas (Byron King)

It starts like this...

"Seven tons of gold, he gave them. And 13 tons of silver. But it came too late. He was about to die.

And of course, his mistake would cost more than his life. It would also cost him his entire empire…"

Like America today, the young Inca empire had it all — brilliant engineers and beautiful palaces, a massive well-trained army, thousands of miles of rich, fertile terrace farms, and even a 14,000-mile network of roads and highways. They were the richest civilization in the New World.

And like us, they had no reason to think it could come crashing down.

Over all this, the government had total control. Taxes were high. You paid not with money, but hours of work. For 2/3rds of the year, you dedicated your skills to supporting the state. Fail to "pay" your hours and you risked getting hung, stoned, or tossed off a cliff for your "laziness."

It was harsh, but it seemed to work. Faith in the Incan royalty was total. And the idea that the Incan empire could last forever was widely accepted.

History is chock full of turning points where the flow of fortune reverses, where wealth gets redirected, and where every individual's survival — financial or otherwise — can hang on a single decision.

But here's the thing…

Very few can see those changes happening while it still matters. Atahualpa missed it. Before he knew it, the Spaniards had grabbed him and wrapped him in chains. When they demanded a ransom, the Incan nobles paid it. But the Spanish killed Atahualpa anyway.And that was the beginning of the end of that empire.

My point is that radical change is something most people never see coming. But it happens regardless. You and I are living in one of those moments right now.

Is there something "magical" about gold? No, not at all. In fact, when you hear the rest of our untold story, you might start to think gold comes with a curse.

Soon after the Spanish slaughtered Atahualpa, they went looking for even more gold and silver to send back to Spain. And they found plenty.

The Incas thought of gold as the "tears of the gods." They had so much precious metal wealth, it piled up in the corners of their palaces. Incan statues and idols, glimmering jewelry — even the royal baths had gold basins. And by some early accounts the Incans had water pipes lined with silver. There was so much gold in the Incan mines, they used it to make eyebrow tweezers, combs, and eating utensils!

The Spanish took everything they could pay their hands on. They melted down gold and silver work, loaded it on ships and sent the booty back to Spain

There were times when, within just a few weeks, the Spanish mined, melted and shipped off more gold and silver than Europe produced in a year. The Spaniards even found a whole "silver mountain."

Early in the 15th Century, there was a year in which the Spanish sent 154 ships back home, each holding 200 tons of metal. Within 50 years, Spain piled over five times more gold and silver than had ever been mined in Europe.

At first, people in Spain just got richer. And Spain got more powerful. Spanish industry froze as the whole country went shopping. They snapped up every luxury you can think of — Italian clothes, French art, and Asia spices. Massive villas, gorgeous churches, and imported firearms.

And for everything they bought, the countries around Spain got richer too. Until all that money chasing a limited supply of "stuff"… made the price of everything across Europe take off. Spain's prices soared 400%. In England, land prices exploded 700%. Inflation crippled all the surrounding countries, too.

That's when Spain did something like you might expect our Federal Reserve to do today. They threw even more money at the problem. Only instead of printing it, they had to go back to the New World mines to get some.

Now, you might not usually think of an OVER-supply of gold and silver as a crisis. But that's exactly what had happened. Which just goes to show you, it's NOT just the gold or silver by itself that makes the fortune.

It's something else. Something less mysterious. And something, that for the opposite reason, makes any gold you own now a LOT more reliable as a store of wealth today…

Why Gold Is Worth More Today

You see, the gold and silver then didn't have much value to the Incas because they had SO MUCH of it. And gold and silver ended up being less valuable to the Spanish, because they ended up holding SO MUCH of it too.

The bottom line is, too much of ANYTHING is worth less than too little. And that may be the simplest formula for building wealth you'll ever hear — that everything, even silver and gold, can't beat the natural cycle of demand and supply.

So what about right now?

You only need to ask yourself, with everything else going on in the gold and silver markets… and with so many others speculating that we've already peaked on gold and silver prices… have we hit the same GLUT in the gold or silver supply?

And the answer is, we haven't. Not even close.

In fact, not only has demand for gold exploded — with the central banks and private investors hoarding like there's no tomorrow and new gold exchange-traded-funds (ETFs) stuffing their vaults like there's no tomorrow — but the new physical supplies of both gold and silver are running out!

Could We Soon See Permanent High-Priced Gold?

Fifty years ago, you would get about 12 grams of gold for every ton of rock you pulled out of a mine. Today? To get the same amount of gold — barely enough to make a thin tie clip — you need FOUR TIMES that amount of ore. Or four tons, the same weight as a large SUV truck.

Just to get enough to make a gold wedding band, miners process over 20 tons of ore!

Any way you add it up, gold is physically harder to get. And the same goes for silver, most of which comes up as a byproduct of gold mining. And this is an undeniable NEW driver behind the rising price of today's gold.

Tanking gold production means a huge gap between supply and demand. And that alone could mean another huge spike in wealth-making opportunity.

Think about this…

Once, the U.S. was the world's top gold producer. Not anymore — now China holds the title. Meanwhile, we're getting 100 FEWER metric tons of gold out of our mines than we did just 10 years ago, in the year 2000.

South Africa was also once the world's top gold producer in the world. Today, they get half as much out of the ground as they did back in 1970 — and they've just posted their weakest gold production year since 1956! One South African geologist explained it to me this way, "Our mines are getting too deep," he said. "It's too expensive to recover the ore. We could see a collapse of South African gold output, and I mean sooner rather than later."

Once, you could find glinting gold nuggets in mountain streams. Today you might have to dig as deep as 14,000 feet… and still you could come up with nothing!

NONE of this was on the radar screen, the last time around.

The Other Hidden Forces Behind a "Perfect Storm" in Metals

Last time around, when there was a bull market in gold in 1979, you didn't have the severe supply shortage I've just been showing you. But we didn't have a lot of the other factors creating a "perfect storm" in precious metals either.

Take demand from China and India. The economies of both countries were a fraction of their current size. Chinese and Indian central banks that amounted to next to nothing. It was even illegal for Chinese citizens to own gold then… just like it was illegal for Americans between 1933 and 1974.

You remember what happened when President Gerald Ford suddenly made it legal for Americans to hold gold again. The price took off, soaring 733% just from 1976 to 1980.

How much higher could it go now, four decades later, where it's not only legal again for 1.3 billion Chinese to own gold… but where their own government runs commercials on television urging them to buy?

Meanwhile, India is hoarding too — having snatched up 220 tons of IMF gold at over $1,000 per ounce in October 2009. And Russia also continues to hoard, as a hedge against holding U.S. dollars as a reserve currency.

Back in 1979, you also had no European Union. And no E.U. central bank, either. There were no gold-backed exchange-traded-funds. And back then, many central banks were selling gold into the surge. Today, many central banks are buying.

Even as you read this now, high-tech "urban miners" skim Japan's sewage system for gold and silver… because it leaches out of tossed cell phones and other high-tech gadgets. They've recovered thousands of pounds of the stuff already, and they're going back for more.

It all adds up to a MAJOR SUPPORT under the gold price that could easily overpower short-term pullbacks and corrections in today's otherwise raging bull market for both of these metals.

When Gold Will Stop Going Up

When will you see the gold price stop rising for good?

Just in 2009 alone, we had seven gold corrections. Each time, gold prices went back up. And overall, gold still finished the year hundreds of dollars above its low.

No doubt you'll see even more corrections for gold, silver, and other raw resources like oil and gas too. But the long term, from every angle, looks like it's going up.

When the trap sprang shut on Atahualpa, he felt it.

But a trap that closes slowly can be just as deadly, even if you don't feel or notice it happening… until it's too late! The devastation to your savings so far in America has been that kind of trap.

Is gold today still a "buy"… even now?

Yes. And as promised. I can show you why.

But first, soak in this surprising fact…

You have to wonder, how many thousands of hours did stock analysts slave away on Wall Street? How many hedge-fund toadies crunched numbers late into the night? And how many billions of dollars got blown on financial advisory fees… before somebody figured out that this one simple move could beat them all?

From 1999 until now, all you had to do was own gold — and without the help of a single hedge-fund manager or pricey advisor, you could have more than quadrupled your wealth.

Impressive? Go back over the last 25 years and you'll find something even more surprising…

…The single best year for stocks was just a 31% gain.

…while gold had a year with gains of 100.2%.

…and precious metal coins topped the charts at 198.8%!

You have to wonder… after such a run, is this already over?

And the answer is — not even close.

Why Gold's Going Still Higher

Look, during the 1970s and early '80s, the yellow metal soared 2,329%.

We're not even a fraction of that far today — at just 323% in gains so far.

Even though today's markets carry an even BIGGER surge of demand, much TIGHTER gold supplies, and the massive weight of more debt, fiat dollars, and inflation than at any other time in HISTORY!

If we close the "gold gap" between the last bull market's percentage gains in gold to the matching level gain today, you're talking an eye-popping gold spike to $23,450 per ounce!

Now, I'm not saying it will go anywhere near that high. Actually, I'm praying it won't. Because to see that happen, you'd need to be following the news from the safety of your bomb shelter, as all around you civilization just breaks down.

No, history doesn't have to repeat. All it needs to do is rhyme. And based on all the factors we've talked about already, it looks like it could still go much higher than it has so far.

"How High?"

If you translate the 1980 gold peak of $850 into today's dollars, you get a peak price of $2,230 still on the horizon. That's more than enough for you to make a fortune on the next gold move.

"We will not see less than the $1,000 level [for gold] again… Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold."

— Dr. Marc Faber

I say it could go still higher. And you don't have to take my word on that. Dr. Rusty McDougal of the Investor's Daily Edge says, "Gold will easily break $3,000."

Guru Jim Rogers says $3,500.

Famous bear Peter Schiff calls the U.S. dollar the "new peso" and says gold could soar to $5,000 before we're through. Mining maven and gold expert Doug Casey agrees — we'll see $5,000.

Even the reserved Wall Street Journal posted data that shows that if you could put the dollar back on the gold standard — gold right now would go for $7,648 per ounce.

You get that number by divvying up all the $2 trillion of new cash out there… by all 261.5 million ounces of gold the U.S. government claims to have in reserve.

And gold expert James Turk told Barron's that as early as 2013, we could easily see tomorrow's gold at $8,000 per ounce.

Keep in mind, every time the dollar drops 1%, gold's been going up about 4.7%. Another 15% drop in the dollar alone could easily put us over $1,990 gold — a spike of 70%

There's a very simple move you can make now… just as easily as moving on gold, but much cheaper… that can give you exactly that kind of wealth-multiplying "leverage."

In fact, I call this "slingshot gold option" strategy… because, like an option on gold, it lets you harness the power of the yellow metal, but for many times the gains.

And at a fraction of the gold price. What am I talking about?

See if you can guess…

Over the last 12 months, while gold spiked 38%, this "slingshot option" move soared twice that for gains of 86%.

Back when the U.S. government froze gold prices at $20.67, this "slingshot option" took the market tension and surged for gains of 168%.

When Franklin Roosevelt made it ILLEGAL to hold your own gold back in 1933, investors turned to this "slingshot option" and sent it soaring for gains of 488%.

When OPEC put the panic into petroleum in the 1970s, inflation sent gold — newly unleashed from the dollar — exploding upward by 150%. The "slingshot option" however soared 433%

Gold's last spectacular run of 2,429% returns got creamed by anyone holding the "slingshot option" position instead — which churned out eye-popping gains of 5,556%!

By now you've guessed — I'm talking about SILVER.

It's easy to get caught up in an explosive gold market… but don't overlook the 6,000 year history of silver as a powerful wealth-multiplier. And in modern times, silver is not just money, but it's a key industrial metal too.

Silver's been real money since 475 B.C. Meanwhile, it's the single best conductor of electricity and heat — and used in everything from iPods and cell phones to solar panels, mirrors, microscopes, and telescopes.

Silver kills bacteria. You can use it to seed clouds and make it rain. And, yes, about a third of all the silver in the world is still used in photography. In short, silver demand is HIGH — even while silver supplies have never been tighter.

Industry alone demands 156% of all new silver produced (yep, you read that right!) — and that's the way it's averaged out every year since 1990. Just in the last eight years, we've already dipped 1.5 billion ounces deep into our stockpiles, to cover the difference.

And that factors in zero of the surging silver investment demand.

In June 1940, Nazis marched into a Paris wine cellar and took 80,000 bottles of wine.

What else did they plunder from the countries they invaded? Not stock certificates and savings bonds…

They took oil, gasoline, and scrap iron to feed their war machine… collectible art and diamonds… and of course hundreds of millions of dollars worth of gold and silver, some of it still hidden all over Europe.

And after the Japanese slaughtered 350,000 in Nanking, what else did they do? They scoured the wasted city for gold, carting off over 6,000 metric tons of the yellow metal — a process they repeated all over Asia before and during World War II.

When U.S. Gen. Douglas MacArthur finally took back the Philippines, his troops found multi-billion dollar stashes of precious stones, gold, and silver. In all, some $100 billion of gold. Rumor has it that after the war it disappeared into 176 different secret bank accounts.

I hope you see my point.

(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.)

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	05-Mar-2010	2623.08	1709.74	913.34

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	05-Mar-2010	1049.16	1710.42	-661.26

Weekly Index Outlook: Post-Budget cheer in market

Sensex (16,994.4)

The long weekend following the Union Budget presentation helped market participants determine that there were no hidden demons in the Budget fine-print, helping stock prices to surge higher in the first two sessions of the week. Since the global environment is relatively benign despite the occasional rumble from Greece, it is the reception to NMDC's share offer that will determine the near term sentiment in our market.

Trading activity picked up last week and small and mid-cap stocks were back in the limelight. Volumes were brisk in both cash and derivative segment. FIIs contributed to the feeling of well-being by buying stocks worth nearly Rs 4,000 crore this month. Domestic institutions were more tentative and have net sold Rs 2,500 crore in the same period. Traders continued to build positions in the derivative segment and open interest has risen above Rs 1 lakh crore once again.

Sensex moved up to 17,012 on Wednesday before the mood turned cautious and the index vacillated around the 17,000 mark in the last two sessions of the week. That the index has managed a close above the 50-day moving average is a positive. Oscillators in the daily chart are, however, reaching overbought levels. Weekly oscillators are hovering in the neutral zone implying that the medium-term downtrend has not reversed yet.

The behaviour of the 10-month rate of change oscillator is very interesting. This oscillator, that had moved up vertically from March to September 2009 has reversed sharply and has given up half its gains implying that momentum has deteriorated significantly from a long-term perspective.

The Sensex is currently poised tantalisingly at the key short-term resistance at 17,000. As pointed in our previous columns, strong close above this level will turn the medium-term view neutral and pave the way for a rally towards the recent peak of 17,790. Conversely, reversal from here will drag the index down to 15,775 or 14,951.

Where does that leave the medium-term view? We have been reiterating that it is too soon to gauge the shape that the current correction can take, whether it will be sharp and swift one or a long-drawn sideways correction. We had also envisaged a "terminal corrective that makes the index move between 14,000 and 18,000 for a few months in the initial months" in our outlook for 2010 published on January 3. We had also then noted that "investors ought to stay on their guard as long as the 18,500 level is not surpassed strongly."

A move beyond 17,000 can take the Sensex towards the key intermediate term resistance band between 17,800 and 18,200 once more. It is however doubtful if this level can be cleared just yet. What can follow is another bout of choppy movement in the aforesaid range between 14,000 and 18,000.

For the week ahead, the short-term trend in the Sensex is up. But caution needs to be exercised since the index is poised at critical short-term resistance level. Short-term investors can buy in declines as long as the index holds above 16,545. If this level is not breached, then the Sensex can rally to 17,509 or 17,790 in the days ahead. Short-term view will turn negative again on a decline below 16,200.

Nifty (5,088.7)

The Nifty moved contrary to our expectation last week and rallied to the intra-week peak of Rs 5,118.6. Despite the strong 166-point weekly gain, this index has lost its way slightly in the last couple of sessions. The short-term trend however continues to be up and traders can hold their long positions with stop at 4,990.

Since the 50-day moving average is also positioned at 5,000, the band between 4,980 and 5,000 will be an important support zone for the near-term. If this support holds, the index can rally to 5,247 or 5,310 in the days ahead.

Subsequent support is at 4,845. Traders should avoid fresh long positions on a decline below this level.

The medium-term trend in this index will turn neutral on a strong close above 5,067 and will imply an impending rally towards a new yearly high. However, the index continues to have strong intermediate term resistance around 5,300 and a sideways move between 4,500 and 5,300 is likely for few more months.

Global equity had a strong week and most benchmarks closed 3 to four per cent higher helping many of them to close at fresh yearly highs. CBOE volatility index closed at 17.4, close to the low at 16.8 recorded on January 8 implying that investor sentiment is once more getting too complacent for comfort.

The sharp up-move of Friday has helped European benchmarks such as the DAX, CAC and DJ Euro STOXX 50 retrace 61.8 per cent of the current correction. If the rally continues next week, the medium term trend in these indices would turn neutral. Commodities were relatively subdued and CRB index closed on a flat note.

US equities soared Friday as employers cut fewer jobs than expected helping the Dow scale the critical resistance at 10,400. As pointed out in our previous columns, move above 10,400 will make the medium term trend neutral and pave the way for a new 2010 high in this index. There are two trajectories that this index can then take over the medium term, a)a sideways move between 9,800 and 10,800 for a few more months or b) a rally to 11,300 before it reverses lower. —

Budget-day impact on stocks is short-lived

Reacting euphorically to Budget 2010, the stock market has singled out non-banking finance companies (NBFCs) and public sector banks as the key sector 'beneficiaries' .

In the week since the Budget, stocks of NBFCs such as Reliance Capital, Bajaj Auto Finance and Shriram Transport Finance are up 7-12 per cent, on the prospect of the Reserve Bank of India (RBI) handing out more banking licences.

Similarly, the promise of a fresh recapitalisation package saw Allahabad Bank, Dena Bank and Corporation Bank gaining 9-11 per cent. Will gains for these sectors last? Probably not, if the past is anything to go by.

A study of price movements following the last four Budgets clearly shows that sectors that received Budget-day largesse in the form of 'favourable' policy announcements often did not hold on to gains in the year that followed. Nor did sectors that were battered due to an 'unfriendly' Budget continue in the same vein thereafter.

Moves don't last

Consider these cases. An unexpected excise duty cut on small cars saw the stock of Maruti Suzuki jump 12 per cent in the week following the February 2008 Budget. But a year down the line, the stock had lost nearly 30 per cent in value. In the 2006 Budget, textile companies reaped a bounty on Budget Day with moves such as duty cuts and a higher allocation to the Textile Upgradation Fund. However, a year later, stocks such as Indo Rama Synthetics, Vardhman Textiles and Century Enka were trading 25-35 per cent lower even while Sensex had soared 31 per cent. The textile sector was in fact a regular recipient of positive announcements in three Budgets – in 2005, 2006 and 2007. Yet, the stocks did no better than the Sensex in any of these years.

In 2007, realty companies were battered 5 per cent on Budget Day itself after a proposal to levy service tax on residential/commercial property rentals. But it was realty stocks that outpaced the Sensex with a 66-per-cent gain in the year that followed.

Remain on paper

One reason why sectors that are at the receiving end of Budget proposals don't seem to hold on to the initial gains, is that policy announcements made in the Budget do not always translate into action on the ground. Do phrases such as "nutrient-based subsidy for fertilisers", "people's participation in the divestment programme" and "viable pricing mechanism for petroleum products" sound familiar? Well, these phrases were mentioned not only in the 2010 Budget, but also in the previous one. Yet, the nutrient-based subsidy for fertilisers is only now being taken up, oil price deregulation remains on paper and the divestment programme is only now gathering steam. The proposal for direct subsidy to farmers was set in motion in 2007, but is yet to see the light of the day.

Broader trends

The other key reason why investors should not read too much into the market's Budget reactions is that broader markets quickly shift focus to other factors, once D-Day is over. If the broader market is in a bearish trend, even a much-feted Budget may not keep the markets upbeat for very long.

Conversely, if the market is on an uptrend, a 'market-unfriendly' Budget is quickly forgotten. Do you remember that the Sensex tanked 5.8 per cent intra-day after the previous Budget was unveiled on July 6, 2009? You probably don't, because the Sensex went on to gain 24 per cent by the end of 2009.

Stock Strategy: Short straddle on Cairn

Cairn India (Rs 269): Despite the broader markets witnessing a sharp turnaround, the stock of Cairn India has been moving within a tight band.

The trend is likely to continue for some more time as it faces strong resistance near Rs 305-309 levels. It however has a support around Rs 207-215.

We expect the stock to continue moving in a narrow band of Rs 250-280 and only a conclusive break from this range would set a clear trend for the stock.

But if the stock manages to breach past Rs 310, it can move above its all-time high level of Rs 342.

On the other hand, a drop below Rs 207 could weaken it to as low as Rs 160.

Cairn India futures (market lot 1,250) has seen a steady accumulation in open interest in the last couple of days; though there was some pressure on the open interest front post budget. The Cairn India futures ended at a premium to the spot close of Rs 267, suggesting that there may have been accumulation of long positions.

Among the options, the 270-strike of calls and puts saw a moderate accumulation, while the 280 call witnessed a slightly higher accumulation. This indicates that the stock could move around the Rs 270 range, but may have only a limited upsnide potential.

Strategy: Consider short straddle on Cairn India. This can be initiated by selling 270 strike call and put, which ended Friday at a premium of Rs 7 and Rs 8.1 respectively. Note that short straddle gives only a limited profit but has an unlimited risk. This strategy is best used when one thinks that the underlying securities will experience only little volatility in the near-term. Maximum profit for the short straddle is achieved when the underlying stock price on expiration date is trading at the strike price of the options sold.

Consider holding this strategy for at least two weeks.

Disclosure: I don't have any positions in the above said scrips & NIFTY FUTURES.

Disclaimer:

"I do not make any warranties, express or implied, as to results to be obtained from using the information in this e-letter. Investors should obtain individual financial advice based on their own particular circumstances before making any investment decisions based upon information in this report."

--
Arvind Parekh
+ 91 98432 32381

Weekly Market Outlook 8th-12th March 2010

INDEX SPOT LEVELS FOR MONDAY 8th March

	5088.70	( 0.17 %)	8.45
		1	2	3
Resistance		5115.55	5142.40	5166.15
Support		5064.95	5041.20	5014.35

	16994.49		( 0.13 %)	22.79
			1	2	3
Resistance			17082.76	17171.03	17244.35
Support			16921.17	16847.85	16759.58

Strong & Weak Stocks for 8th March 

This is list of 10 strong stocks :

Sesa Goa, Orient Bank , Purva, JSW Steel, Mcdowell-N, Sun TV, DCHL, Hero Honda, Canara Bank & Sterling Biotech.  

And this is list of 10 Weak stocks: 

Bajaj Hind, Chambal Fert, BPCL, Mphasis, ICSA, Tata Comm, Hind Petro, Tulip, Renuka & Pantaloon Retail.

Nifty is in Up trend  

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	05-Mar-2010	2623.08	1709.74	913.34

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	05-Mar-2010	1049.16	1710.42	-661.26

Weekly Index Outlook: Post-Budget cheer in market

Sensex (16,994.4)

The long weekend following the Union Budget presentation helped market participants determine that there were no hidden demons in the Budget fine-print, helping stock prices to surge higher in the first two sessions of the week. Since the global environment is relatively benign despite the occasional rumble from Greece, it is the reception to NMDC's share offer that will determine the near term sentiment in our market.

Trading activity picked up last week and small and mid-cap stocks were back in the limelight. Volumes were brisk in both cash and derivative segment. FIIs contributed to the feeling of well-being by buying stocks worth nearly Rs 4,000 crore this month. Domestic institutions were more tentative and have net sold Rs 2,500 crore in the same period. Traders continued to build positions in the derivative segment and open interest has risen above Rs 1 lakh crore once again.

Sensex moved up to 17,012 on Wednesday before the mood turned cautious and the index vacillated around the 17,000 mark in the last two sessions of the week. That the index has managed a close above the 50-day moving average is a positive. Oscillators in the daily chart are, however, reaching overbought levels. Weekly oscillators are hovering in the neutral zone implying that the medium-term downtrend has not reversed yet.

The behaviour of the 10-month rate of change oscillator is very interesting. This oscillator, that had moved up vertically from March to September 2009 has reversed sharply and has given up half its gains implying that momentum has deteriorated significantly from a long-term perspective.

The Sensex is currently poised tantalisingly at the key short-term resistance at 17,000. As pointed in our previous columns, strong close above this level will turn the medium-term view neutral and pave the way for a rally towards the recent peak of 17,790. Conversely, reversal from here will drag the index down to 15,775 or 14,951.

Where does that leave the medium-term view? We have been reiterating that it is too soon to gauge the shape that the current correction can take, whether it will be sharp and swift one or a long-drawn sideways correction. We had also envisaged a "terminal corrective that makes the index move between 14,000 and 18,000 for a few months in the initial months" in our outlook for 2010 published on January 3. We had also then noted that "investors ought to stay on their guard as long as the 18,500 level is not surpassed strongly."

A move beyond 17,000 can take the Sensex towards the key intermediate term resistance band between 17,800 and 18,200 once more. It is however doubtful if this level can be cleared just yet. What can follow is another bout of choppy movement in the aforesaid range between 14,000 and 18,000.

For the week ahead, the short-term trend in the Sensex is up. But caution needs to be exercised since the index is poised at critical short-term resistance level. Short-term investors can buy in declines as long as the index holds above 16,545. If this level is not breached, then the Sensex can rally to 17,509 or 17,790 in the days ahead. Short-term view will turn negative again on a decline below 16,200.

Nifty (5,088.7)

The Nifty moved contrary to our expectation last week and rallied to the intra-week peak of Rs 5,118.6. Despite the strong 166-point weekly gain, this index has lost its way slightly in the last couple of sessions. The short-term trend however continues to be up and traders can hold their long positions with stop at 4,990.

Since the 50-day moving average is also positioned at 5,000, the band between 4,980 and 5,000 will be an important support zone for the near-term. If this support holds, the index can rally to 5,247 or 5,310 in the days ahead.

Subsequent support is at 4,845. Traders should avoid fresh long positions on a decline below this level.

The medium-term trend in this index will turn neutral on a strong close above 5,067 and will imply an impending rally towards a new yearly high. However, the index continues to have strong intermediate term resistance around 5,300 and a sideways move between 4,500 and 5,300 is likely for few more months.

Global equity had a strong week and most benchmarks closed 3 to four per cent higher helping many of them to close at fresh yearly highs. CBOE volatility index closed at 17.4, close to the low at 16.8 recorded on January 8 implying that investor sentiment is once more getting too complacent for comfort.

The sharp up-move of Friday has helped European benchmarks such as the DAX, CAC and DJ Euro STOXX 50 retrace 61.8 per cent of the current correction. If the rally continues next week, the medium term trend in these indices would turn neutral. Commodities were relatively subdued and CRB index closed on a flat note.

US equities soared Friday as employers cut fewer jobs than expected helping the Dow scale the critical resistance at 10,400. As pointed out in our previous columns, move above 10,400 will make the medium term trend neutral and pave the way for a new 2010 high in this index. There are two trajectories that this index can then take over the medium term, a)a sideways move between 9,800 and 10,800 for a few more months or b) a rally to 11,300 before it reverses lower. —

Budget-day impact on stocks is short-lived

Reacting euphorically to Budget 2010, the stock market has singled out non-banking finance companies (NBFCs) and public sector banks as the key sector 'beneficiaries' .

In the week since the Budget, stocks of NBFCs such as Reliance Capital, Bajaj Auto Finance and Shriram Transport Finance are up 7-12 per cent, on the prospect of the Reserve Bank of India (RBI) handing out more banking licences.

Similarly, the promise of a fresh recapitalisation package saw Allahabad Bank, Dena Bank and Corporation Bank gaining 9-11 per cent. Will gains for these sectors last? Probably not, if the past is anything to go by.

A study of price movements following the last four Budgets clearly shows that sectors that received Budget-day largesse in the form of 'favourable' policy announcements often did not hold on to gains in the year that followed. Nor did sectors that were battered due to an 'unfriendly' Budget continue in the same vein thereafter.

Moves don't last

Consider these cases. An unexpected excise duty cut on small cars saw the stock of Maruti Suzuki jump 12 per cent in the week following the February 2008 Budget. But a year down the line, the stock had lost nearly 30 per cent in value. In the 2006 Budget, textile companies reaped a bounty on Budget Day with moves such as duty cuts and a higher allocation to the Textile Upgradation Fund. However, a year later, stocks such as Indo Rama Synthetics, Vardhman Textiles and Century Enka were trading 25-35 per cent lower even while Sensex had soared 31 per cent. The textile sector was in fact a regular recipient of positive announcements in three Budgets – in 2005, 2006 and 2007. Yet, the stocks did no better than the Sensex in any of these years.

In 2007, realty companies were battered 5 per cent on Budget Day itself after a proposal to levy service tax on residential/commercial property rentals. But it was realty stocks that outpaced the Sensex with a 66-per-cent gain in the year that followed.

Remain on paper

One reason why sectors that are at the receiving end of Budget proposals don't seem to hold on to the initial gains, is that policy announcements made in the Budget do not always translate into action on the ground. Do phrases such as "nutrient-based subsidy for fertilisers", "people's participation in the divestment programme" and "viable pricing mechanism for petroleum products" sound familiar? Well, these phrases were mentioned not only in the 2010 Budget, but also in the previous one. Yet, the nutrient-based subsidy for fertilisers is only now being taken up, oil price deregulation remains on paper and the divestment programme is only now gathering steam. The proposal for direct subsidy to farmers was set in motion in 2007, but is yet to see the light of the day.

Broader trends

The other key reason why investors should not read too much into the market's Budget reactions is that broader markets quickly shift focus to other factors, once D-Day is over. If the broader market is in a bearish trend, even a much-feted Budget may not keep the markets upbeat for very long.

Conversely, if the market is on an uptrend, a 'market-unfriendly' Budget is quickly forgotten. Do you remember that the Sensex tanked 5.8 per cent intra-day after the previous Budget was unveiled on July 6, 2009? You probably don't, because the Sensex went on to gain 24 per cent by the end of 2009.

Stock Strategy: Short straddle on Cairn

Cairn India (Rs 269): Despite the broader markets witnessing a sharp turnaround, the stock of Cairn India has been moving within a tight band.

The trend is likely to continue for some more time as it faces strong resistance near Rs 305-309 levels. It however has a support around Rs 207-215.

We expect the stock to continue moving in a narrow band of Rs 250-280 and only a conclusive break from this range would set a clear trend for the stock.

But if the stock manages to breach past Rs 310, it can move above its all-time high level of Rs 342.

On the other hand, a drop below Rs 207 could weaken it to as low as Rs 160.

Cairn India futures (market lot 1,250) has seen a steady accumulation in open interest in the last couple of days; though there was some pressure on the open interest front post budget. The Cairn India futures ended at a premium to the spot close of Rs 267, suggesting that there may have been accumulation of long positions.

Among the options, the 270-strike of calls and puts saw a moderate accumulation, while the 280 call witnessed a slightly higher accumulation. This indicates that the stock could move around the Rs 270 range, but may have only a limited upsnide potential.

Strategy: Consider short straddle on Cairn India. This can be initiated by selling 270 strike call and put, which ended Friday at a premium of Rs 7 and Rs 8.1 respectively. Note that short straddle gives only a limited profit but has an unlimited risk. This strategy is best used when one thinks that the underlying securities will experience only little volatility in the near-term. Maximum profit for the short straddle is achieved when the underlying stock price on expiration date is trading at the strike price of the options sold.

Consider holding this strategy for at least two weeks.

--
Arvind Parekh
+ 91 98432 32381