Market Outlook 15th Dec 2009

Intraday calls for 15th Dec 2009
Buy Wipro-658 above 665 for 674-684 with sl 660
Buy Indiacem-120 for 125-127 with sl 118
Buy BajajAuto-1783 for 1800-1811 with sl 1777
Buy ABAN-1243 for 1265-1273 with sl 1230

 

NIFTY FUTURE LEVELS

5120

5151

5170

5179

5199

SUPPORT

5097

5080

5069

5050

5040

5021

 

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

Ranbaxy, Bajaj Auto, Orchid Chem, Hotel Leela, ACC, Chambal Fert, Idea, Sail Ltd, India Cement & Ambuja Cement.

And this is list of 10 Weak futures:

Orient Bank, Tata Comm, Ivrcl Infra, Renuka, Lic house, IOB, Aban Off shore, Allahabad Bank, Andhra Bank & RNRL.
 Nifty is in Up trend   

 

NIFTY FUTURES (F & O):  
Above 5120 level, expect short covering up to 5149-5151 zone and thereafter expect a jump up to 5168-5170 zone by non-stop.

Support at 5080 & 5097 levels. Below these levels, selling may continue up to 5069-5071 zone and thereafter slide may continue up to 5050-5052 zone by non-stop.

Below 5040-5042 zone, expect panic up to 5021-5023 zone by non-stop.

On Positive Side, cross above 5177-5179 zone can take it up to 5197-5199 zone by non-stop. Supply expected at around this zone and have caution.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
CNX BANK INDEX:  
Above 9039 level, expect short covering up to 9099-9101 zone and thereafter expect a jump up to 9158-9160 zone by non-stop.

Support at 8997-8999 zone. Below this zone, selling may continue up to 8979 level and thereafter slide may continue up to 8938-8940 zone by non-stop.

Below 8918-8920 zone, expect panic up to 8859-8861 zone by non-stop.

On Positive Side, cross above 9178-9180 zone can take it up to 9237-9239 zone by non-stop. Supply expected at around this zone and have caution.

 
Short-Term Investors:  
Bullish Trend. Stop Loss at 8550.00
Up Side Target at 9996.00.
 
Equity:  
HOUSING DEV & INFRA (NSE Cash)

No trigger & Range bound trading expected.

Above 351 level, rally may continue up to 362 level by non-stop.

Support at 345 level. Below this level, expect profit booking up to 333 & 337 levels by non-stop.
 
 
RANBAXY LABS (NSE Cash)

Explosive scrip. Negative factor is that, Stop Loss is too far on down side.

Above 520 & 522 levels, it can zoom up to 541 level and thereafter expect a jump up to 544-546 zone by non-stop.

Support at 512 level. Below this level, expect profit booking up to 497 level. Stop Loss can be placed at 495 level & too far on down side.
 
BHARTI AIRTEL (NSE Cash)

This scrip can go down further & your risk is high. 

Below 317 & 318 levels, selling may continue up to 300 & 301 levels and thereafter it can tumble up to 281-283 zone by non-stop.

Hurdle at 323 level. Above this level, there is a chance of short covering up to 336 level also possible. Stop Loss can be kept at 337 level & too far on upper side.
 
BATA (I) (NSE Cash)

No trigger & Range bound trading expected.

If crosses & sustains at above 201 & 202 levels, then rally may continue up to 208 level by non-stop.

Below 196 & 197 levels, expect profit booking up to 191 level by non-stop.
 
Will you take risk of Rs.2.55? (From Yesterday's closing price). 

Then Sell UNITECH (NSE Cash) with a Stop Loss of 89.00 level. 

Target at 79.60-80.60 zone.
 
 
Will you take risk of Rs.48.70? (From Yesterday's closing price). 

Then Buy INFOSYS TECHNOLO (NSE Cash) with a Stop Loss of 2450.05. 

Target at 2585.95-2587.95 zone.
 
 
Will you take risk of Rs.51.55? (From Yesterday's closing price).

Then Buy BHEL (NSE Cash) with a Stop Loss of 2358.00. 

Target at 2501.70-2503.70 zone.
 
OPTIONS (NSE): 
 NIFTY 5000 PUT OPTION

Expected to fall. Negative factor is that, up side risk is more.

Up side may be limited up to 77-79 zone. If crosses & sustains, then it can zoom up to 93 level by non-stop.

Below 63-65 zone, unwinding may continue up to 42 & 52 levels and thereafter it can tumble up to 35-37 zone by non-stop.
 
TATASTEEL 540 PUT OPTION

No trigger & Range bound trading expected.

Below 14-16 zone, unwinding may continue up to 11 level by non-stop.

20 & 21 levels will continue to resist up move. If crosses & sustains, then it can zoom up to 25 level by non-stop.
 
STOCK FUTURES (NSE):  
ICICI BANK FUTURES

Expect volatility.

Below 844 & 849 levels, selling may continue up to 835 level and thereafter it can tumble up to 825-827 zone by non-stop.

Hurdle at 860 level. Above this level, expect short covering up to 874 level and thereafter expect a jump up to 879-881 zone by non-stop.
 
 
SBI FUTURES 

Expect volatility.

Up side rally up to 2251 level is possible. Below 2226 & 2242 levels, selling may continue up to 2202 level and thereafter it can tumble up to 2194-2196 zone by non-stop.

On Positive Side, cross above 2270 level can take it up to 2287 level and thereafter expect a jump up to 2297-2299 zone by non-stop.
 
INVESTMENT BUYS:
STEEL AUTHORITY (NSE Cash)  

Good looking scrip for 1 Month Holding. Target at 232 level (or) even up to 247-249 zone.

Negative Factors:

1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 
BAJAJ AUTO (NSE Cash)

Good looking scrip for 1 Month Holding. Target at 1996 level (or) even up to 2000-2002 zone.

Negative Factors:

1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 
SPOT LEVELS TODAY

	5105.70	( -0.23 %)	-11.60
		1	2	3
Resistance		5144.88	5184.07	5211.43
Support		5078.33	5050.97	5011.78

	17097.55		( -0.13 %)	-21.48
			1	2	3
Resistance			17232.44	17367.32	17459.46
Support			17005.42	16913.28	16778.40

Q3 Advance Tax numbers ((All YoY except where mentioned QoQ))
-Tata Motors pays Rs 100 crore versus Nil (YoY)
-M&M pays Rs 195 crore versus Rs 4.5 crore (YoY)
-Tata Steel pays Rs 650 crore versus Rs 260 crore (YoY)
-Hindalco pays Rs 100 crore versus Rs 40 crore
-HUL pays Rs 200 crore versus Rs 155 crore: Sources
-L&T pays Rs 270 crore versus Rs 312 crore (YoY)
-Grasim Q3 advance tax at Rs 150 crore versus Rs 75 crore: Sources
-UltraTech pays Rs 90 crore versus Rs 65 crore (YoY)
-HDFC Q3 advance tax at Rs 320 crore versus Rs 280 crore: Sources
-Dena Bank pays Rs 65 crore versus Rs 60 crore (YoY)
-IndusInd Bank pays Rs 65 crore versus Rs 22 crore (YoY)
-Bank Of Baroda pays Rs 330 crore versus Rs 220 crore (YoY)
-Bank Of India pays Rs 102 crore versus Rs 370 crore (YoY)

-Central Bank pays Rs 138 crore versus Rs 163 crore (YoY)
-Tata Power pays Rs 81 crore versus Rs 29 crore (YoY)
-Tata Chem pays Rs 40 crore versus Rs 83 crore (YoY)
-Indian Oil Q3 advance tax nil versus Rs 1,100 crore (QoQ)
-BPCL Q3 advance tax at nil 
-Bajaj Auto pays Rs 320 crore versus Rs 105 crore

 

 stocks that are in news today:
-Sources indicate RIL yet to decide on the final bid for Lyondell-basel
-JSW Energy sets issue price of Rs 100/share (Rs 5 discount to retail investors)

 

 

-GMR to raise Rs 1,200 crore via stake sale in GMR Energy, in talks with Temasek – Agencies
-Kingfisher still in NSE F&O curb
-Golden Tobacco board meet on December 21 to consider development of properties
-Bajaj Hindusthan Q4 numbers today
-Godrej Consumer board meet today on fund raising
-Infra firms may get MAT relief – BS (Budget expectations)
-Gemini Communication close to bagging BSNL's Rs 1,000 crore Wimax deal – DNA
-Redington board approves investment of $29 million into its wholly owned subsidiary

 

 

FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	14-Dec-2009	1829.1	1766.83	62.27

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	14-Dec-2009	1212.42	1103.5	108.92

 

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 14th Dec & weekly update till 18th dec 2009

Strong Futures
This is list of 10 Strong Futures: Idea, BEL, Hotel Leela, Dena Bank, Chambal Fert, Ranbaxy, McDowell-N, Hind Zinc, Hind Petro & BPCL.
Weak Futures
This is the list of 10 Weak Futures: Nagarjuna Const, Aban Off shore, Bank of Baroda, Renuka, Lic house, Orient Bank, Punj Lloyd, RNRL, Ivrcl Infra & Voltas Ltd.

Nifty is in Up trend

 

NIFTY FUTURES (F & O):
 
Above 5145 level, expect short covering up to 5185 level and thereafter expect a jump up to 5225-5227 zone by non-stop.

Support at 5109-5111 zone. Below this zone, selling may continue up to 5098 & 5102 levels and thereafter slide may continue up to 5069-5071 zone by non-stop.

Below 5056-5058 zone, expect panic up to 5016-5018 zone.

On Positive Side, cross above 5238-5240 zone can take it up to 5278-5280 zone by non-stop. Supply expected at around this zone and have caution.
 
Short-Term Investors:
 
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
BSE SENSEX:
 
Above 17140 level, expect short covering up to 17251-17253 zone and thereafter expect a jump up to 17325-17327 zone by non-stop.

Support at 17046 & 17109 levels. Below these levels, selling may continue up to 17007-17009 zone and thereafter slide may continue up to 16933-16935 zone by non-stop.

Below 16896-16898 zone, expect panic up to 16822-16824 zone.

On Positive Side, cross above 17362-17364 zone can take it up to 17436-17438 zone by non-stop. Supply expected at around this zone and have caution.
 
Short-Term Investors:
 
Bullish Trend. Stop Loss at 16210.44.
Up Side Target at 18226.48.
 
Equity:
 
STEEL AUTHORITY (NSE Cash)

Explosive Stock & any time it may take off.

Down side risk up to 208 level also possible. Stop Loss at 205 level.

Will zoom up to 212 & 214 levels. Above these levels, rally may continue up to 217 level and thereafter expect a jump up to 219-221 zone by non-stop.
 
 
BAJAJ AUTO (NSE Cash)

Technically Explosive. Negative factor is that, Stop Loss is too far on down side.

Down side risk up to 1641 level also possible. Stop Loss at 1640 level.

Will zoom up to 1732 & 1733 levels. Above these levels, rally may continue up to 1817 level and thereafter expect a jump up to 1824-1826 zone by non-stop.
 
COX & KINGS (I) (NSE Cash)

Excellent debut. If you are willing to take high risk & expecting high returns then buy.

Down side risk up to 343 level also possible. Stop Loss is too far on down side at 335 level.

Above 434 level, rally may continue up to 516 level by non-stop.
 
SHR RENUKA SUGARS (NSE Cash)

Down side is limited. 

Down side risk may be limited up to 209 & 211 levels.

Resistance is too far at 220 level & Stop Loss for selling can be kept at 222 level. Too far on upper side.
 
OPTIONS (NSE):
NIFTY 5000 PUT OPTION

No trigger & Range bound trading expected.

Down side risk up to 61 level also possible. Stop Loss can be kept at 51 level.

Above 88 level, expect rally up to 98 level by non-stop.
 
SBIN 2280 PUT OPTION

Technically Bullish & Negative factor is that Stop Loss is too far on down side.

Down side risk up to 52 level also possible. Stop Loss can be kept at 49 level. Too far on down side.

Above 74 & 77 levels, expect rally up to 93 level and thereafter expect a jump up to 99-101 zone by non-stop.
 
STOCK FUTURES (NSE):
 
JINDAL STEEL & POWER FUTURES 

Technically Explosive. Negative factor is that, Stop Loss is too far on down side.

Down side risk up to 740 level also possible. Stop Loss at 733 level.

It will zoom up to 753 & 760 levels on upper side. Above 769 level, expect a jump up to 773-775 zone by non-stop.
 
 
TATA STEEL FUTURES 

No trigger & Range bound trading expected.

Selling may continue up to 536 level. Below this level, it can tumble up to 530 level by non-stop.

Above 553 level, expect short covering up to 560 level by non-stop.
 

 

INDEX SPOT LEVELS

	5117.30	( -0.34 %)	-17.35
		1	2	3
Resistance		5170.43	5223.57	5264.58
Support		5076.28	5035.27	4982.13

	17119.03		( -0.41 %)	-70.28
			1	2	3
Resistance			17295.12	17471.21	17590.71
Support			16999.53	16880.03	16703.94

FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	11-Dec-2009	2156.5	1818.04	338.46

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	11-Dec-2009	1523.92	1531.09	-7.17

 

 

Index Outlook — Awaiting the Santa Claus rally

Sensex (17,119)

The pause at the threshold is so long-drawn that the Sensex appears frozen around 17,000. With even a stunner such as the Dubai debt fiasco scarcely causing a ripple in the market's serene mood, the index appears set to finish this year with panache, close to or above the 17,000 mark.

Market is however slipping into a lackadaisical mood over the past month with tepid volumes and very low volatility. It is up to Santa Claus now to come jingling in his reindeer sleigh to take the Sensex to a new high.

FII inflows have also slowed down since the beginning of December. Open interest has again crept over 1,10,000 indicating that players are building positions in the hope of a break-out beyond this range soon.

Stock futures nearing one-third of the total open interest quantity is however a cause for concern.

Daily momentum indicators are trudging in a clueless fashion in the neutral region. Weekly oscillators are beginning to emulate this move since the Sensex has not done much over the last four weeks, vacillating between 16,200 and 17,400.

The two lines of Bollinger band in the daily chart have however drawn extremely close implying that a break-out is imminent.

The sideways move recorded last week has reinforced the positive medium term view and makes it likely that the index can make one more dash higher before 2009 draws to a close.

Medium term target for the move from July low is 17,970 and then 19,600. If we consider the entire intermediate term up-move from the March lows, next target for the index is at 17,866.

Thus we arrive at the potential target between 17,900 and 18,200 if it tries to break lose before the year end. Decline below 16,100 is needed to make the medium term negative again. But failure to make a new high next week will mean that the index will remain in the range between 16,000 and 17,500 for few more weeks.

It is likely that the bulls make one more attempt to drive the Sensex higher next week. Short-term targets for the index are 17,493 or 17,747. Short-term traders can book some profit if the index fails to move above 17,500.

Target above 17,747 is 18,170. Supports for the week would be at 16,900 and 16,640. Fresh purchases are to be avoided on a close below the second support.

Nifty (5,117.3)

Nifty seemed intimidated by the peak of 5,181.9 and recoiled again and again from this level last week. But the sideways move between 5,050 and 5,180 coming between the medium term uptrend appears to be consolidation before the index breaks out to a new 2009 peak. First target for the move from 3,918 is at 5,319.

Surprisingly, extrapolating the move from November 27 low also gives us the target of 5,319 followed by 5,462. Traders can therefore stay long with a stop at 5,030 to take advantage of this upward break-out. Subsequent supports are at 4,949 and 4,806. Fresh longs should be avoided only on a close below 4,949.

The medium term view for the index remains positive but we continue to advise caution in the zone between 5,300 and 5,400.

Global Cues

Global benchmarks closed the week slightly in the negative after trudging sideways for most part. Volumes declined in most markets as investors took off for year-end breaks. Volatility too moved to the lower end of its current trading range as the US markets rallied higher on Friday on better than expected retail sales number. Though Dow began the week on a shaky note, it recovered in the second half to close at a 14-month high. This index has been moving in an extremely narrow range between 10,250 and 10,500 over the last four weeks. Since the medium and intermediate term trend in the index continues to be up, we can expect one more spurt higher to 10,759 or 11,080 in the beginning of January. A close below 10,000 would be the first requisite to negate the positive short-term view for this index.

Asian indices too moved sideways but most of them are ruling at or close to 52-week highs. Some such as Straits Times Index and Taiwan Weighted Index recorded multi-month highs last week. —

Pivotals — Reliance Industries (Rs 1,068.9)

There was a steep plunge in RIL on Monday but the slide was stemmed at Rs 1,050 and the stock moved sideways thereafter. A spinning top candlestick pattern is apparent in the weekly chart denoting indecision. The medium-term up-trend that commenced at the Rs 903 trough continues to be in force and has the targets of Rs 1,140 and then Rs 1,221. As long as the stock does not record a close below Rs 1,030, these targets remain achievable.

The stock is, however, under duress from a short term perspective and a decline to Rs 1,050 or Rs 1,018 is possible in this time-frame. Key resistance for the week is at Rs 1,120 and fresh purchases are recommended only on a close above this level.

SBI (Rs 2,265.7)

SBI moved sideways with a negative bias last week finally closing with a loss of Rs 62. The stock has not been going anywhere for the past five weeks and has been shackled within the range between Rs 2,200 and Rs 2,400. It will continue to face strong resistance in the zone between Rs 2,340 and Rs 2,400 in the week ahead and support will be available at Rs 2,260 and Rs 2,200.

In other words, the narrow sideways move can continue for a few more sessions and traders can avoid trading on this counter while this trend lasts. The medium term view for this stock is also neutral and the range for this period is between Rs 2,050 and Rs 2,500.

Tata Steel (Rs 545.6)

Tata Steel moved in line with our expectation to reverse below the peak of Rs 600 to the intra-week low of Rs 536 and ended with 5 per cent weekly loss. The short-term trend has now reversed lower but the slide can halt at Rs 520 as indicated last week. Movement in the zone between Rs 520 and Rs 600 will be conducive to the continuation of the rally in near term to take the stock higher towards Rs 660. Subsequent supports are at Rs 506 and Rs 490. Near term trend will turn negative only on a decline below the second support.

Though the near-term trend has not deteriorated much, investors need to exercise caution at this juncture since the stock is reversing from the key medium-term resistance around Rs 600. Decline below Rs 490 can pull Tata Steel to Rs 430 over the medium term.

Infosys (Rs 2,454.7)

Infosys recorded a new life-time high of Rs 2,486 and closed the week on a positive note with 3 per cent gain. Short-term chart pattern is bullish and the stock can move higher to Rs 2,510 or Rs 2,637 in the near term. Traders holding long positions can continue to do so with a stop at Rs 2,360.

The stock appears to have begun yet another leg of the intermediate term up-trend that is in place since March. Medium term investors can hold the stock with a stop at Rs 2,120.

ONGC (Rs 1,189.9)

The rally in ONGC last week could not take it past the resistance at Rs 1,200 thus maintaining a neutral short-term view. The stock is expected to remain in the range between Rs 1,080 and Rs 1,270 in the near- term.

But this sideways move appears to be a halt before the stock breaks out higher to Rs 1,400 over the medium term. Traders can therefore accumulate the stock in declines with a stop at Rs 1,075.

Maruti Suzuki (Rs 1,586.9)

Maruti Suzuki paused half-way up its medium term range between Rs 1,360 and Rs 1,740. The doji in the weekly chart implies that the stock is struggling to move to a new high and can decline towards Rs 1,370 again in the near term. Strong close above Rs 1,620 is needed to signal that the short-term trend has turned favourable.

 

City Union Bank — Rights Offer: Subscribe

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The proceeds from the rights offer will enhance the capital adequacy base, allowing the bank to fund its future loan book growth.

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A very low offer price makes the 1:4 rights offering from City Union Bank a good investment proposition. The company expects to raise Rs 48 crore from the issue. At the rights offer at Rs 6 per share, which is at a 76 per cent discount to the current market price of Rs 25.15, the trailing one year price-earnings multiple (PEM) works out to just 1.4. In the market, the stock trades at a PEM of 6, which is at a discount to peers such as Lakshmi Vilas Bank, Dhanalakshmi Bank. The current price-adjusted book value of the bank stands at 1.2 times.

The proceeds from the rights offer will enhance the capital adequacy base, allowing the bank to fund its future loan book growth. Post-rights, the capital adequacy may improve to over 16 per cent from the current 14.08 per cent. The high capital adequacy will allow the bank to cushion itself, if the RBI chooses to reverse the risk weight reduction on loans, implemented during the previous fiscal.

City Union Bank has strong profitability ratios (return on average assets of 1.5 per cent and return on net worth of 19.7 per cent), good operating efficiencies (cost-income ratio of 37 per cent). Its asset quality too has improved with the net non-performing asset (NNPA)-to advances ratio falling significantly from 3.37 per cent to 1.16 per cent in September 2009 over four-and-a-half years.

Finance

City Union Bank is one of the smaller private banks with 222 branches and a predominant presence in Tamil Nadu. The bank has witnessed an annualised growth of 30 per cent in its loan book during the period 2005-09 while the net profit of the bank also grew at the same rate. A limited branch network has curtailed the low-cost deposit growth. The bank has a higher cost of funds compared to most peers, curtailing its net interest margin. However, given the short-term nature of these instruments, there is scope for the deposits to get re-priced, which reduces interest rate risk. Therefore, the cost of funds would moderate over the next few quarters.

On the assets side, the bank's secured loans as a proportion of advances stood at a high 95 per cent, shielding the bank from write-offs. The bank has a 30 per cent exposure to high-yielding micro, small and medium scale enterprises (MSME) loans. The bank's top industry exposures are textiles, construction and iron and steel.

During the first half of this fiscal, the bank's credit growth moderated to 18.8 per cent, mirroring industry wide trends. Net interest margins fell to 2.75 per cent from 3 per cent, putting pressure on the operating profits. Higher growth in deposits (29.5 per cent) compared to advances was the key reason for margin compression. However, the bank has done well to maintain its net profit growth at 21 per cent, mainly through lower provisioning.

Asset quality concerns surrounding the bank have waned in recent years with net NPAs, as a proportion of the bank's net worth, likely to stand at 8.5 per cent of (post-offer) net worth, down from 28 per cent four years ago. This gives bank adequate cushion against slippage in asset quality.

some concerns

A loan provision coverage of 41 per cent is one of the major concerns for this bank, as the RBI has recently mandated banks to increase their provision coverage to 70 per cent. Though this may dent near-term profitability, it may strengthen the bank's balance-sheet from any adversity, especially in the light of its high proportion of restructured loans (5.51 per cent at the end of March 2009).

Outlook

Though the risks outweigh the positives currently, the bank has huge scope for improvement in parameters such as credit-deposit ratio (64.3 per cent as of September, 30), low-cost deposits (20 per cent of the total deposits) and fee income. Net interest margin, NNPA ratio (from 1.45 per cent to 1.18 per cent) and 'other income' have already begun showing signs of improvement.

Over the long term, the maturity of the bank's loans may increase as it increasingly shifts to term loans from working-capital loans. If this is matched with longer-term deposits, earnings volatility may get minimised. In addition, the bank's core focus areas (retail and MSME) are likely to be margin accretive as the economy revives.

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 11th Dec 2009

  

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

Dena Bank, Idea, Hotel Leela, Orchid Chem, McDowell-N, Indusind Bank, Hind Petro, Bharti Airtel, India Hotels & Ranbaxy. 

And this is list of 10 Weak futures:

Nagarjuna Const, Tata Comm, Aban Off shore, Bank of Baroda, IOB, Rel Infra, Voltas Ltd, BRFL, Purva & Punj Lloyd.
 Nifty is in Up trend  

 

INDEX SPOT LEVELS TODAY

	5134.65	( 0.44 %)	22.65
		1	2	3
Resistance		5142.90	5173.80	5199.95
Support		5085.85	5059.70	5028.80

	17189.31		( 0.37 %)	64.09
			1	2	3
Resistance			17216.33	17307.44	17386.92
Support			17045.74	16966.26	16875.15

FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	10-Dec-2009	2556.62	2262.58	294.04

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	10-Dec-2009	1255.92	1186.69	69.23

 

 

--

Arvind Parekh

+ 91 98432 32381

 

 

Market Outlook 10th Dec 2009

 

NIFTY FUTURE LEVELS
RESISTANCE
5146
5155
5178
5201
5224
SUPPORT
5116
5111
5093
5070
5048

 

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

Orchid Chem, Ranbaxy, BPCL, McDowell-N, BEL, Hind Petro, Ansal Infra, KFA, Hotel Leela & Dena Bank. 

And this is list of 10 Weak futures:

Tata Comm, Aban Off shore, IOB, Bank of Baroda, Rel Infra, Bajaj Hind, ICICI Bank, Nagarjuna Const, Punj Lloyd & BRFL. 
Nifty is in Up trend  

 

NIFTY FUTURES (F & O):  
Above 5146 level, expect short covering up to 5153-5155 zone and thereafter expect a jump up to 5176-5178 zone by non-stop.

Support at 5116-5118 zone. Below this zone, selling may continue up to 5111 & 5112 levels and thereafter slide may continue up to 5093-5095 zone by non-stop.

Below 5070-5072 zone, expect panic up to 5048-5050 zone.

On Positive Side, cross above 5199-5201 zone can take it up to 5222-5224 zone and supply expected at around this zone and have caution.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
CNX BANK INDEX (F&O):
Above 9205 level, expect short covering up to 9268-9270 zone and thereafter expect a jump up to 9331-9333 zone by non-stop.

Support at 9161 level. Below this level, selling may continue up to 9142-9144 zone.

Below 9079-9081 zone, expect panic up to 9016-9018 zone.

On Positive Side, cross above 9393-9395 zone can take it up to 9456-9458 zone and supply expected at around this zone and have caution.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 8550.00.
Up Side Target at 9996.00.
 
Equity:  
HCL TECHNOLOGIES (NSE Cash)

Looks interesting. Both Bulls & Bears will have a chance. Sharp movements expected.

Above 358 level, it will race up to 366 & 367 levels and thereafter expect a jump up to 370-372 zone by non-stop.

Below 354 level, expect profit booking up to 344 & 346 levels and thereafter it can tumble up to 340-342 zone by non-stop.
 
TATA STEEL (NSE Cash)

Weak & Selling recommended. Negative factor is that Stop Loss is too far on upper side.

Below 542 level, selling may continue up to 519 & 522 levels and thereafter it can tumble up to 498-500 zone by non-stop.

Up side risk up to 564 level also possible. Stop Loss at 567 level & too far on upper side.
 

IVRCL INFRASTR & PROJECTS (NSE Cash)

Explosive scrip & Stop Loss is too far on down side. 

Above 384 & 386 levels, it will race up to 399 level and thereafter expect a jump up to 403-405 zone by non-stop.

Down side risk up to 368 level also possible. Stop Loss is far on down side at 365 level.
 
BANK OF BARODA (NSE Cash)

Weak & Selling recommended. Negative factor is that Stop Loss is too far on upper side.

Below 508 level, selling may continue up to 489 & 500 levels and thereafter it can tumble up to 486-488 zone by non-stop.

Up side risk up to 520 level also possible. Stop Loss at 528 level & too far on upper side.
 
OPTIONS (NSE): 
 NIFTY 5100 PUT OPTION

Upside may be limited.

Above 112 level, rally may continue up to 127 level by non-stop.

Down side risk up to 100 level also possible. Risk is that, Stop Loss is too far at 85 level.
 
BHARTIARTL 330 CALL OPTION

Upside may be limited & risk is too high.

Above 17 level, rally may continue up to 18 level by non-stop.

Below 11 & 12 levels, expect unwinding up to 7 level and thereafter slide may continue up to

3-5 zone by non-stop.
 
STOCK FUTURES (NSE):  
ICICI BANK FUTURES

Looks interesting. Both Bulls & Bears will have a chance. Sharp movements expected.

Below 854 level, selling may continue up to 839 & 846 levels and thereafter it can tumble up to 833-835 zone by non-stop.

Above 865 level, it will race up to 873 & 877 levels and thereafter expect a jump up to 884-886 zone by non-stop.
 
DLF FUTURES 

Upside may be limited & selling may continue.

Upside may be limited up to 389 & 390 levels.

Below 378 & 379 levels, selling may continue up to 371 level and thereafter it can tumble up to 366-368 zone by non-stop.
 
INVESTMENT BUYS:  
AARTI DRUGS (BSE Code: 524348)

Good looking scrip for 1 Week Holding. Target at 138-140 zone.

Negative Factors:
1 Day: Choppy Trading expected & will rebound from lower levels.
  
WIPRO (NSE Cash)

Good looking scrip for 1 Month Holding. Target at 684 level (or) even up to 688-690 zone.

Negative Factors:
1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 
FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	09-Dec-2009	2055.83	2433.15	-377.32

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	09-Dec-2009	1347.98	1329.11	18.87

 

SPOT INDEX LEVELS TODAY

	5112.00	( -0.70 %)	-35.95
		1	2	3
Resistance		5180.70	5213.45	5274.35
Support		5087.05	5026.15	4993.40

	17125.22		( -0.59 %)	-102.46
			1	2	3
Resistance			17322.28	17416.87	17595.96
Support			17048.60	16869.51	16774.92

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 9th Dec 2009

Intraday calls for 9th Dec 2009

Global cues will drag nifty towards TDL trading support [Buy on dip is advisable]

Buy Infy-2446 @ 2419-2415 for 2485 with sl 2405

Buy AnsalInfra-73 @ 69-68 for 85 with sl 64 [positional]

Buy PNB-938 @ 930-925 for 1000 with sl 900 [positional] 

 

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

Orchid Chem, McDowell-N, Ranbaxy, BPCL, Jindal Saw, Hind Petro, India Hotels, Hind Zinc, Suzlon & Indusind Bank. 

And this is list of 10 Weak futures:

Tata Comm, Aban Off shore, IOB, Rel Infra, Punj Lloyd, Great Offshore, Sterling Biotech, Bajaj Hind, Bhel & Ivrcl Infra.
 Nifty is in Up trend  

 

NIFTY FUTURES (F & O): 
 \Below 5126 level, expect profit booking up to 5085-5087 zone and thereafter slide
may continue up to 5045-5047 zone by non-stop.

Hurdle at 5168 level. Above this level, rally may continue up to 5173-5175 zone by non-stop.

Sell if touches 5212-5214 zone. Stop Loss at 5252-5254 zone.

On Negative Side, break below 4979-4981 zone can create panic up to 4939-4941 zone by non-stop. If breaks & sustains this zone then downtrend may continue and have caution.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
BSE SENSEX: 
Below 17159 level, expect profit booking up to 17055-17057 zone and thereafter slide
may continue up to 16952-16954 zone by non-stop.

Hurdle at 17238 level. Above this level, rally may continue up to 17248-17250 zone by non-stop.

Sell if touches 17350-17352 zone. Stop Loss at 17453-17455 zone.

On Negative Side, break below 16849-16851 zone can create panic up to 16747-16749 zone by non-stop. If breaks & sustains this zone then downtrend may continue and have caution.
 
Short-Term Investors: 
Bullish Trend. Stop Loss at 16210.44.
Up Side Target at 18226.48.
 
Equity: 
 TATA MOTORS (NSE Cash)

Explosive scrip & Stop Loss is too far on down side. 

Above 725 level, it will race up to 753 & 755 levels and thereafter expect a jump up to 783-785 zone by non-stop.

Down side risk up to 695 level also possible. Stop Loss is far on down side at 694 level.
 
 
ORCHID CHEM (NSE Cash)

Too much risk is there for buyers. If clicks, then expect good profit too.

Down side risk up to 210 level also possible. Stop Loss is too far on down side at 206 level.

Above 222 level, it can zoom up to 230 level by non-stop.
 
CENTURY TEXTILES (NSE Cash)

Explosive scrip & Stop Loss is too far on down side. 

Above 507 & 509 levels, it can zoom up to 529 level and thereafter expect a jump up to 532-534 zone by non-stop.

Down side risk up to 484 level also possible. Stop Loss is too far on down side at 482 level.
 
RAIN COMMODITIES (NSE Cash)

Too much risk is there for buyers. If clicks, then expect good profit too.

Down side risk up to 177 level also possible. Stop Loss is too far on down side at 166 level.

Above 208 level, it can zoom up to 228 level by non-stop.
 
OPTIONS (NSE):  
ICICIBANK CALL OPTION (900 Strike Price)

Explosive & rally may continue.

Down side risk up to 18 level also possible. Stop Loss is too far at 14 level.

Above 22 & 25 levels, it can zoom up to 28 level and thereafter expect a jump up to

29-31 zone by non-stop.
 
SBIN CALL OPTION (2400 Strike Price)

Upside is limited.

Recovery may be limited up to 42 & 43 levels.

Down side risk up to 28 level also possible and thereafter expect unwinding up to 27 level

by non-stop.
 
STOCK FUTURES (NSE):  
RELIANCE INDS FUTURES 

Explosive scrip & Stop Loss is too far on down side. 

Above 1088 & 1091 levels, it can zoom up to 1116 level and thereafter expect a jump up to 1120-1122 zone by non-stop.

Down side risk up to 1060 level also possible. Stop Loss is too far on down side at 1057 level.
 
 
RELIANCE CAPITAL FUTURES 

Explosive scrip & Stop Loss is too far on down side. 

Above 859 & 862 levels, it can zoom up to 879 level and thereafter expect a jump up to 882-884 zone by non-stop.

Down side risk up to 838 level also possible. Stop Loss is too far on down side at 835 level.
 
INVESTMENT BUYS:  
TATA ELXSI (NSE Cash)

Good looking scrip for 1 Month Holding. Target at 352 level (or) even up to 354-356 zone.

Negative Factors:
1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 
AXIS BANK (NSE Cash)

Good looking scrip for 1 Month Holding. Target at 1064 level (or) even up to 1074 level.

Negative Factors:

1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 
 
FII DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	08-Dec-2009	2809.96	1966.78	843.18

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	08-Dec-2009	1087.3	1591.28	-503.98

 

 

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 8th Dec 2009

Intraday calls for 8th Dec 2009

Buy BataIndia-188 for 193-195+ with sl 184

Buy Suzlon-83 for 89-91+ with sl 81

Buy IOC-315 for 329+ with sl 310

 

NIFTY FUTURE LEVELS

RESISTANCE

5082

5115

5147

5199

5231

SUPPORT

5060

5039

5008

4976

 

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

Ranbaxy, Orchid Chem, McDowell-N, BPCL, Divi'S Lab, Dena Bank, Hind Zinc, Cipla, Suzlon & PFC.

And this is list of 10 Weak futures:

Aban Off shore, Tata Comm, Rel Infra, Purva, Bajaj Hind, Ansal Infra, Punj Lloyd, Triveni, Sterling Biotech & Brfl.
 Nifty is in Up trend   

NIFTY FUTURES (F & O):  
Above 5082 level, expect short covering up to 5113-5115 zone and thereafter expect a jump up to 5145-5147 zone by non-stop.

Support at 5060 level. Below this zone, selling may continue up to 5039-5041 zone by non-stop.

Below 5008-5010 zone, expect panic up to 4976-4978 zone by non-stop.

On Positive Side, short rallies up to 5197-5199 zone can be used to sell. Stop Loss at 5229-5231 zone.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
Today's Expectation:
SGX NIFTY is now trading at 5050.00. (08.31 AM IST)

This trend is on expected lines.

If this downtrend continues, then it may continue for 1 (or) 2 Days.

If short covering starts, then it may continue for 1 Day, 1 Month (or) even 1 Year.
 
CNX BANK INDEX (F&O):  
Above 9182 level, expect short covering up to 9245-9247 zone and thereafter expect a jump up to 9309-9311 zone by non-stop.
Support at 9139-9141 zone & at 9152 level. Below these levels, selling may continue up to 9120 level and thereafter it can tumble up to 9076-9078 zone by non-stop.

Below 9055-9057 zone, expect panic up to 8991-8993 zone by non-stop.

On Positive Side, short rallies up to 9330-9332 zone can be used to sell. Stop Loss at 9393-9395 zone.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 8550.00.
Up Side Target at 9996.00.
 
Equity: 
 ABAN OFFSHORE (NSE Cash)

Bears got a chance to dominate.

If breaks & sustains at below 1197 & 1225 levels, then selling may continue up to 1190 level and thereafter slide may continue up to 1160-1162 zone.

Risk is that, up side risk up to 1260 level also possible. SL at 1267 level.
 
 
HIND OIL EXPLORA (NSE Cash)

Not much upside, as per my calculations.

Will zoom up to 293 & 294 levels on upper side.

Downside risk up to 270 level also possible. Buy with a Stop Loss of 269 level.
 
BHARTI AIRTEL (NSE Cash)

Technically Bullish. 

Downside risk up to 309 level also possible. Buy with a Stop Loss of 304 level.

Target at 321 level & thereafter it can touch 328 level by non-stop.
 
OPTIONS (NSE):  
TATASTEEL CALL OPTION (580 Strike Price)

Expect further selling. Risk is too high.

If breaks & sustains at below 12 & 13 levels, then selling may continue up to 6 level and thereafter slide may continue up to 3-5 zone.

Risk is that, up side risk up to 20 & 21 levels also possible.
 
STOCK FUTURES (NSE):
JSWSTEEL FUTURES:

Expect further selling. But Stop Loss is too far on upper side & risk is too high.

If breaks & sustains at below 925 & 941 levels, then selling may continue up to 861 level and thereafter slide may continue up to 852-854 zone.

Risk is that, up side risk up to 1011 level also possible. SL at 1027 level.
 
DLF FUTURES:

Expect further selling. But Stop Loss is too far on upper side & risk is too high.

If breaks & sustains at below 362 & 366 levels, then selling may continue up to 351 level and thereafter slide may continue up to 346-348 zone.

Risk is that, up side risk up to 380 level also possible. SL at 384 level.
 
INVESTMENT BUYS:  
BOMBAY DYEING (NSE Cash)

Good looking scrip for 1 Month Holding. Target at 424 level (or) even up to 427-429 zone.

Negative Factors:
1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 
HOTEL LEELA VENT (NSE Cash)

Good looking scrip for 1 Month Holding. 

Negative Factors:

1 Day: Choppy Trading expected & will rebound from lower levels.

1 Week: Choppy Trading expected & will rebound from lower levels.
 

--
Arvind Parekh
+ 91 98432 32381

Market Outlook 7th Dec 2009

INTRADAY calls for 07th Dec 2009
+ve Sector, Scripts : Oil&Ref, Pharma, Neclife, Indiainfo, IOC, LITL,
NDTV, NTPC, Tatatea, TV18
Buy Jindalstel-724 for 737-744+ with sl 715
Buy Finantech-1418 for 1437-1440+ with sl 1410
Buy Optocircuit-221 for 228-230+ with sl 219

Positional
Buy EssorOil-145 for 165-169+ with sl 134
Buy 3I Info-84 for 98-105+ with sl 80

Breakout
Buy MRPL-81 for 94-98+ with sl 77
Buy HPCL-380 for 388-408+ with sl 375

 

NIFTY FUTURE LEVELS

RESISTANCE

5134

5148

5182

5193

5228

SUPPORT

5106

5091

5078

5043

5032

4998

JINDALSTEEL;RANBAXY;UNITEDSPRIT;ESSAROIL

 

NIFTY FUTURES (F & O):  
Above 5134 level, expect short covering up to 5146-5148 zone and thereafter expect a jump up to 5180-5182 zone by non-stop.

Support at 5091 & 5106 levels. Below these levels, selling may continue up to 5078-5080 zone and thereafter slide may continue up to 5043-5045 zone by non-stop.

Below 5032-5034 zone, expect panic up to 4998-5000 zone by non-stop.

On Positive Side, short rallies up to 5191-5193 zone can be used to sell. Stop Loss at 5226-5228 zone.
 
Short-Term Investors:  
Bullish Trend. Stop Loss at 4801.00.
Up Side Target at 5477.00.
 
Today's Expectation:
SGX NIFTY now trading at 5127.50.(08.36 AM IST)

This trend is surprising & Positive too.

If this uptrend continues, then it may continue for 1 (or) 2 Days, 1 Week, 1 Month, 3Months & even 1 Year.

If Profit Booking starts, then it may continue for 1 Day.
 
BSE SENSEX:  
Above 17172 level, expect short covering up to 17269-17271 zone and thereafter expect a jump up to 17334-17336 zone by non-stop.

Support at 17088 & 17092 levels. Below these levels, selling may continue up to 17053-17055 zone and thereafter slide may continue up to 16988-16990 zone by non-stop.

Below 16956-16958 zone, expect panic up to 16891-16893 zone by non-stop.

On Positive Side, short rallies 17367-17369 zone can be used to sell. Stop Loss at 17431-17433 zone.
 
Short-Term Investors:
 
Bullish Trend. Target at 18226.48.
Stop Loss at 16210.44.
 
CNX BANK INDEX (F&O):  
Above 9272 level, expect short covering up to 9330-9332 zone and thereafter expect a jump up to 9387-9389 zone by non-stop.
Support at 9231-9233 zone & 9235 levels. Below these levels, selling may continue up to 9214 level and thereafter slide may continue up to 9174-9176 zone by non-stop.

Below 9155-9157 zone, expect panic up to 9097-9099 zone by non-stop.

On Positive Side, short rallies up to 9406-9408 zone can be used to sell. Stop Loss at 9464-9466 zone.
 
Short-Term Investors:
 
Bullish Trend. Stop Loss at 8550.00.
Up Side Target at 9996.00.
 
INVESTMENT BUY:  
JINDAL STEEL POW (NSE Cash)

Buy. Buy.. Buy...

If crosses & sustains at above 731 & 733 levels, then it can zoom up to 753 level and thereafter expect a jump up to 759-761 zone by non-stop.

Risk is that, down side risk up to 705 level also possible. Stop Loss at 702 level.
 
 
RANBAXY (NSE Cash)

Sell. Sell.. Sell...

If breaks & sustains at below 496 & 502 levels, then it can fall up to 493 level and thereafter expect a slide up to 487-489 zone by non-stop.

Risk is that, up side risk up to 510 & 516 levels also possible. Above 520 level, expect a short covering up to 524-526 zone by non-stop.
 
UNITED SPIRITS (NSE Cash)

Technically Bearish. But down side is limited.

If breaks & sustains at below 1330 level, then it can fall up to 1312 level by non-stop. 

Risk is that, up side risk up to 1399 level also possible. Above 1399 level, expect a short covering up to 1417 level by non-stop.
 
ESSAR OIL (NSE Cash)

Buy. Buy.. Buy...

If crosses & sustains at above 146 & 147 levels, then it can zoom up to 158 level and thereafter expect a jump up to 159-161 zone by non-stop.

Risk is that, down side risk up to 134 level also possible. Stop Loss at 133 level.
 
OPTIONS (NSE):
RELIANCE PUT OPTION (1050 Strike Price)

Technically Bullish.

Above 21 level, it can zoom up to 25 level by non-stop. 

Support at 15 level. Below 15 level, expect unwinding up to 13 level by non-stop.
 
NIFTY CALL OPTION (5200 Strike Price)

Too much risk is there. If clicks, then unexpected gains also there.

Above 109 level, it can zoom up to 118 level by non-stop. 

If breaks & sustains at below 70 & 80 levels, then it can fall up to 46 level and thereafter expect a slide up to 39-41 zone by non-stop.
 
STOCK FUTURES (NSE):
TATAMOTORS FUTURES (NSE)
 

Technically Bullish. Too much risk also there.

Above 716 level, it can zoom up to 725 level by non-stop. 

If breaks & sustains at below 695 & 704 levels, then it can fall up to 686 level and thereafter expect a slide up to 681-683 zone by non-stop.

 
 
HDIL FUTURES (NSE)

Technically Bullish.

Above 360 level, it can zoom up to 363 level by non-stop. 

Support at 349 level. Below 349 level, expect unwinding up to 345 level by non-stop.
 

_____________________________________________________________ __
Strong Futures
This is list of 10 Strong Futures: Hind Zinc, Ranbaxy, Orchid Chem, Divi'S Lab, Jindal Saw, McDowell-N, Cipla, Dena Bank, Recltd & BPCL.
Weak Futures
This is the list of 10 Weak Futures: Punj Lloyd, Aban Off shore, EKC, Ivrcl Infra, Rel Infra, Balrampur Chini, Sterling Biotech, Purva, Great Offshore & Abb Ltd..
_________________________________________________________________

Daily trend of the market is up.
Market has strong resistance at current levels, so the uncertainty is still continuing. But as nifty is still in uptrend so the readers who are holding their longs in Nifty (bought on 26th November) may go on holding till the trend of nifty is in uptrend.

 

FUNDS DATA

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
FII	04-Dec-2009	2029.41	1831.27	198.14

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sell Value	Net Value
DII	04-Dec-2009	1036.44	1093.08	-56.64

 

SPOT INDEX LEVELS 7TH DEC

	5108.90	( -0.44 %)	-22.80
		1	2	3
Resistance		5153.18	5197.47	5233.13
Support		5073.23	5037.57	4993.28

	17101.54		( -0.49 %)	-84.14
			1	2	3
Resistance			17251.31	17401.08	17510.33
Support			16992.29	16883.04	16733.27

Index Outlook: Pausing at the threshold

Sensex (17,101.5)

Markets vroomed higher last week on strong November auto sales and a very bullish second quarter GDP reading. The spectre of another credit crisis following in the wake of Dubai debt trouble dissolved in the slew of positive data from economies across the globe.

Nifty stopped less that one point short of its previous 52-week high while Sensex closed with strong 470 points weekly gain.

Traders were, however, edgy and this air of caution is reflected in the low turnover especially in the derivatives segment.

According to data released by the BSE, FIIs were net buyers through the week while the domestic institutional investors were booking profits.

The series of one negative monthly close followed by a positive monthly close has been continued with Sensex ending 6 per cent higher in November.

Open interest has once again crossed Rs 1-lakh-crore mark with puts outnumbering calls. The 10-week rate of change oscillator has been moving just above the zero line and the 14-week relative strength index has been hovering between 55 and 70 since August implying that though the bias has been positive, the benchmark has been in a corrective mode over the past three months.

Though the Sensex crossed above the key Fibonacci retracement resistance of 16,200 two months ago, the BSE 500 has only just reached this level at 6,700. It needs to be seen if the broader index is able to climb above this significant hurdle.

The mid- and small-cap stocks are still under-performing their large-cap peers. While the BSE Midcap index has retraced only 50 per cent of last year's decline small-cap index has retraced only 43 per cent.

The mood among the investing fraternity is buoyant as is wont near the upper end of trading ranges. But the Sensex has been drooping over the last three trading sessions resulting in weakness in daily momentum indicators.

The index is likely to face stiff resistance between 17,400 and 17,500 that can result in a sideways move between 16,100 and 17,500 for a few more sessions.

But the medium and intermediate term trends stay positive. Formation of a higher trough at 16,210 on November 27 reinforces this view and short-term investors can buy in declines as long as this level holds.

If we extrapolate the move from the July trough, the first target occurs around 17,970.

Minor count of the up-move from the recent trough at 15,330 gives us the targets of 17,421 and 18,170.

In other words, the index has the potential to rally a little further to the zone between 17,800 and 18,200 over the medium-term. However, the confluence of targets in this region makes it a potent reversal point. We stick with the 16,000 level as the medium-term trend deciding point.

Sensex can attempt to rally to 17,421 or 17,493 in the days ahead. If the rally halts around 17,500, a decline to 16,820, 16,640 or 16,200 can ensue. Presence of both the 21 and 50 day moving averages around 16,800 makes it a very important short term support. Target above 17,500 is 17,723.

Nifty (5,108.9)

Nifty recorded an intra-week peak of 5,181 before meandering sideways.

This index is clearly facing resistance near the recent peak formed on October 17 but the short-term chart pattern is bullish and portends a break-out to 5,312 or 5,319 shortly. The positive short-term view will change only on a decline below 4,950.

Short term traders can therefore buy in declines as long as this level holds. Subsequent support is at 4,806.

The medium-term view for the index is also positive but convergence of many intermediate term count targets between 5,300 and 5,400 makes it a potential reversal point for the current intermediate term uptrend.

Close below 4,400 is needed to turn the medium term view negative.

Global Cues

The year-end mood appears to have set in already in global equity markets. They meandered sideways without any conclusive break in either direction. This lethargic move was reflected in the CBOE volatility index that declined from 25.5 to a low of 20.6 during the week.

The Dow moved between 10,200 and 10,500 last week and closed on a flat note. Strong rally beyond 10,500 will give the next target at 11,280 for the index. But as noted last week, the index might bide some time in a sideways range before attempting the next leg of the up-move. Medium term outlook will be roiled only on a close below 9,640. Asian benchmarks recouped almost all the ground they had lost in the previous week while some such as Philippines' PSE Composite and Straits Times Index recorded new 2009 highs.

Pivotals: Reliance Industries (Rs 1,089.1)

RIL moved past our second short-term resistance to an intra-week peak of Rs 1,120 and closed the week on a positive note, up Rs 40. Short-term trend in the stock is up since the November 3 trough of Rs 903. But the stock faces strong resistance in the region between Rs 1,100 and Rs 1,120. Inability to move above this region can result in the stock moving in a range between Rs 1,030 and Rs 1,120 for a few weeks before rallying higher. Subsequent short-term supports are at Rs 1,010 and Rs 985. As we have been reiterating, the area around Rs 1,100 is also a key medium-term resistance for the stock and unless it makes a strong move above it, it is expected to vacillate in the band between Rs 900 and Rs 1,100 for few more weeks. Medium term target above Rs 1,100 is Rs 1,200 and the stock could yet struggle to move above this level .

SBI (Rs 2,327.6)

SBI did a volte-face and moved contrary to our expectation to nullify the bearish evening star pattern that was beginning to develop in the weekly candlestick chart. The stock continues to face strong short-term hurdle at Rs 2,350. Fresh purchases are advised only on a decisive close above this level with the target of Rs 2,394 and Rs 2,479. Short-term supports for the stock are at Rs 2,273 and Rs 2,174. We change our medium-term view on the stock to neutral. Movement in the range between Rs 2,050 and Rs 2,500 would be conducive to the long-term outlook and could be a precursor to a break-out above Rs 2,500. Weekly close below Rs 1,900 is needed to turn the medium-term view negative.

Tata Steel (Rs 575.7)

Tata Steel did not challenge the support at Rs 490 and moved higher towards our first short-term target of Rs 572 instead. The stock will face strong resistance at the October 17 peak of Rs 600. A reversal from here can result in a sideways move between Rs 520 and Rs 600 for a few more sessions. However a break-out above Rs 600 will take the stock to Rs 660.

Investors with a short-term perspective can hold the stock with a stop at Rs 515. It however needs to be borne in mind that Tata Steel faces strong intermediate term resistance at Rs 660 and it is doubtful if the stock will be able to clear this level in the near future.

Infosys (Rs 2,382.5)

Infosys too was surprisingly resilient last week and ended with over 1 per cent gain. The stock is once more testing the resistance zone between Rs 2,400 and Rs 2,450. Inability to surpass this zone will result in the stock oscillating between Rs 2,100 and Rs 2,450 for a few more weeks. Such a move will be deemed positive from a medium-term view point and can usher in a rally to Rs 2,510 or Rs 2,637 over the medium term. Short-term investors can hold the stock with a stop at Rs 2,300. Medium term view for the stock also stays positive and a close below Rs 1,900 is required to negate this view.

ONGC (Rs 1,181)

ONGC moved in a very narrow range between Rs 1,170 and Rs 1,220 last week. The short-term quandary is unresolved by this move and the stock needs to record a sharp move above Rs 1,200 to signal an impending move higher towards the October high of Rs 1,273. Failure to move above this level can result in a decline to Rs 1,101 or Rs 1,039.

Maruti Suzuki (Rs 1,595.2)

Maruti too moved higher towards the intra-week peak of Rs 1,658 before giving up some ground on Friday. Short-term trend in the stock is up since the October 29 trough of Rs 1,368. But the stock needs to move past the key short-term resistance at Rs 1,620 to signal its intention to move towards a new peak.

NTPC, Maruti Suzuki outlook appears weak

NTPC (210): The outlook for this stock appears negative as long as it stays below 216. However, it finds immediate support at 205. A drop below that level (on a closing day basis) could weaken it to 190. On the other hand, only a close above 217 would negate the downtrend. In that event, it could reach 228-230.

F&O outlook

The 210 put saw unwinding of open position, while 210 call saw accumulation. This signals the emergence of call writers, expecting a further fall. The unwinding also suggests that put writers are covering their position.

The NTPC futures also shed open interest consistently during the week, pointing to lack of confidence among traders.

Strategy: Traders could consider going short on NTPC futures keeping the stop-loss at 216 and can book profits at 205 and 190 levels. Alternatively, they can also consider writing 215 call, which ended at 2.90 on Friday. Market lot is 1,625 per contract. This strategy is only for traders willing to take risk as loss could be heavy if the position turns against our expectation. One has to shell out higher margin also.

Maruti Suzuki (1,594): After recording its new high at 1,737, the stock has been on a downtrend. The downtrend persists in the stock as long it stays below 1,685. If the current trend sustains, the stock could reach 1,420 and even to 1,340. However, in between it finds strong support at 1,525.

Options are not active in Maruti Suzuki. Consider shorting Maruti keeping the stop-loss at 1,685. The stop-loss has been given high, as it could swing wildly. Traders with high risk appetite could consider this strategy. Market lot is 200/contract

Follow-up

We had advised traders to go short on L&T with a stop-loss 1,630. The stop-loss would have been triggered. However, the short strangle (using 1,560 put and 1,650 call) on L&T is slightly in the money,

We had also presented a short-straddle strategy on IFCI using 50-strike. The position currently rules at neutral. Consider holding it for a week.

Feedback or queries (on positions) may be sent to f&o@thehindu.co.in. Replies will be published in the Monday edition.

 

JSW Energy — IPO: Invest at cut-off

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Investors seeking a good power exposure in their portfolios over the medium-term can invest.

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The experience of running the 260 MW generating station at Vijayanagar, Karnataka,will be useful as the company commissions ongoing projects.

JSW Energy's initial public offer is for investors willing to wait for returns in the medium term. The company has been operating a small capacity generating station for the last few years but the bulk of its new projects will be commissioned in stages over the next one year and more. These projects, which will be part-funded from the proceeds of this public offer, will start contributing to the earnings in full measure from 2011-12.

In the near term, especially in the immediate period post-listing, the stock may not deliver major returns mainly because of the market's saturation with power IPOs in the last few months; the price performance of some these recent listings tell the tale.

Therefore, while investors looking for listing gains may not find this offer attractive, those seeking a good power exposure in their portfolios over the medium-term can invest.

Valuation

By conventional valuation parameters based on historical earnings such as price-earnings multiple (33 on fully diluted equity at Rs 115) or price-to-book-value (4.3 at Rs 115, compared to industry average of less than 3), the offer does appear expensive. Yet, it is important to note that earnings from almost the entire generating capacity to be part-funded by this offer will kick in only in the medium-term.

Current earnings are based on a capacity of 260 MW; against this, the company will have a generating capacity of 3,140 MW by 2011. By the end of this fiscal, JSW's capacity will have risen to 1,295 MW. What is important is that fuel supply and offtake of power have been fully tied up for the entire capacity that will go on stream by 2011 and the projects will be commissioned in stages gradually, adding to earnings.

The finances for the projects under implementation have been fully secured, including debt from banks. Transmission infrastructure for one of the major projects in Ratnagiri is being implemented by a joint venture with the State utility. With all major aspects of the projects taken care of, the uncertainties in implementation appear limited.

Project profile

JSW owns a 260 MW plant at Vijayanagar, Karnataka, part of whose generation is sold to group company, JSW Steel, and the remaining on short-term basis to other buyers. To this was added 600 MW in two stages in June and September this year. While half the power produced here is again being sold to JSW Steel, the other half, save a small 6 MW, will be sold on short-term basis through the power-trading subsidiary, JSW Power Trading Company.

The two big generation projects that are under construction now are the 1,200 MW plant at Ratnagiri, Maharashtra, and the 1,080 MW station at Barmer in Rajasthan. Both of these are being executed by wholly-owned subsidiaries.

The Ratnagiri project is based on imported coal for which JSW has signed contracts with an Indonesian company, PT Sungai Belati and an affiliate company of JSW Steel in Mozambique to supply coal. In fact, coal from the 25-year supply deal with the two companies will fuel some of JSW's other projects on the drawing board now.

The Rajasthan project will use lignite mined by a joint venture with a State government company and will also supply its entire electricity to the state utility. The first 135 MW unit of this project will be commercialised shortly with the remaining seven units to be commissioned in stages over the next one year.

The first of four units at Ratnagiri will be commissioned by January 2010 with the remaining ones scheduled to go on stream in stages over the next one year. Half the power produced here will be sold on long-term PPAs to the Maharashtra state utility (300 MW) and Adani Enterprises (270 MW); the other half will be sold on short-term basis through the power trading subsidiary.

Eventually when all the projects are commissioned by 2011, JSW's sales will be shared equally between long-term PPAs with State utilities and short-term merchant buyers. Even in the unlikely event of merchant power prices falling, as some fear, JSW's balanced exposure to that market will help the company.

JSW is also planning a 240 MW hydroelectric plant in Himachal Pradesh but several approvals are yet to be received for this project including the crucial environmental approval. The company has included this project among those that will be part-financed by the public offer though it is not set for commissioning till the end of 2015.

We have not considered this project, as also others adding up to 7,740 MW on the drawing board, while valuing the offer. These projects, all of them coal-based, are projected for commissioning in 2014-15.

Risks to our recommendation

All the projects under construction now will be equipped with Chinese boilers and turbines. There have been misgivings on Chinese equipment following the failure of a turbine installed by a state utility. Yet, a number of private power projects under implementation in the country now use Chinese equipment to save on cost and time.

Indeed, JSW's original 260 MW plant uses Chinese equipment and the company appears to have been encouraged by the experience to follow suit with its other projects. However, group company JSW Steel is in the process of setting up a boiler and turbine manufacturing plant in joint venture with Toshiba Corporation near Chennai. This venture should be able to supply to JSW's future projects.

With the company adopting a 75:25 debt:equity ratio for funding its projects, as much as Rs 9,979 crore of the total Rs 14,055 crore capital outlay for the ongoing projects will have to be funded by bank loans. While these have been tied up, they have not been fully disbursed yet. Some of these loans are also contracted on a variable rate basis. These, along with the undisbursed part of the loans which will take prevailing higher rates, could exert some pressure on the internal accruals of the company. A lot will depend on realisations from short-term power sales to cover up for higher debt servicing costs.

FAQs on new platform

Suresh Parthasarathy

The National Stock Exchange (NSE) has implemented a new system called Mutual Fund Service System (MFSS); the BSE has also launched a similar platform. Under the new set-up, investors wishing to buy and sell mutual fund units can do so through their share-brokers. At present though, investors can buy only 30 UTI schemes. But the NSE has said that many other fund houses, such as Reliance, Tata, Birla and ICICI, are in talks with them for participating in the new platform.

There are, of course, existing online systems for trading in MF schemes; investors can log in to the fund house Web site or can execute through online portals such as ICICIDirect.com, Funds India and Fundsupermart. Where the NSE system scores is that investors can hold their units in dematerialised form rather than as statements of account.

Here are the answers to some frequently asked questions on the new trading platform.

How does one buy units through share-brokers?

If you have a trading account and a demat account with any broker, then it is similar to buying shares through your broker. If you don't have trading and demat accounts, you must get one opened to buy and sell MF units.

Under the new platform am I allowed to buy only equity schemes?

No. You can also buy debt schemes, balanced funds, monthly income plans, income schemes and even gilt funds.

What is the advantage of the new system?

The process of buying is more simplified, with 1.5 lakh share broker terminals and the penetration of share-broking offices even in rural areas. Investors need not fill application forms for buying different schemes; all you have to do is to call your broker or log in to your online trading platform.

Will my NAV vary during the day, depending upon my purchase time?

No. Any order placed before the cut-off time of 3 p.m will have same NAV that is likely to be declared later in the day. Any order(s) placed after the cut-off time will have the next trading day's NAV.

How are payments settled?

You will have to issue a cheque to your broker. He, in turn, will settle the amount with the fund houses.

When are the units likely to be credited to my account?

In all probability, it would happen the morning after you put through your trade.

If I have demat account with CDSL and a trading account with a BSE member, is it possible to sell in the NSE?

It is only possible to deliver the units to the same exchange. Therefore, it is not possible to sell in the NSE without an NSDL account. However, the BSE allows both CDSL and NSDL members to trade on the BSE.

Will the broker charge a fee for the transaction?

Currently, the NSE has said it will not charge a transaction fee, but it could be introduced at a later date. For the transaction, your broker may receive upfront commission if that is allowed by the scheme and he may also receive the trial fees.

I am trader in the equity market. Is it possible to trade on the new platform?

In the new platform traders can take advantage of the market volatility and buy and sell mutual fund units at short intervals . But one has to pay exit load based on the terms and conditions of the scheme.

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Arvind Parekh
+ 91 98432 32381

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Arvind Parekh
+ 91 98432 32381