Market may open up. Market may up between 10.22 and 10.41 Market may steady or up side between 13.00 and 13.19. Market may close at up to previous closing.
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Opening Bell Call
Buy
RELIANCE - Reliance Industries Ltd
SUNPHARMA - Sun Pharmaceuticals Industries Ltd
PUNJLLOYD - Punj Lloyd Limited
CAIRN - Cairn India Limited
IDEA - Idea Cellular Limited
HINDUNILVR - Hindustan Unilever Limited
On 27th August 2008 - The BSE Sensex closed at 14,296 (down 185 points) while the NSE Nifty closed at 4,292 (down 45 points).
Opening Bell Call
Sell
SBIN - State Bank of India
MARUTI - Maruti Suzuki India Limited
ISPATIND - Ispat Industries Limited
SESAGOA - Sesa Goa Ltd.
RNRL - Reliance Natural Resources Limited
TATASTEEL - Tata Steel Limited
Technical Analysis for 28th August 2008
BSE-SENSEX - Major Support - 14373, 14278, 14183, 14127, 14071, 13920, 13769
BSE-SENSEX - Major Resistance - 14429, 14485, 14580, 14675, 14826, 14977, 15128
NSE-NIFTY - Major Support - 4312, 4287, 4261, 4246, 4230, 4189, 4148, 4107
NSE-NIFTY - Major Resistance - 4328, 4343, 4369, 4394, 4435, 4476, 4517, 4558
Nifty (4292) Sup 4250 Res 4360
Buy Punj Lloyd (284) SL 279 Target 292, 295
Buy M&M (576) SL 571
Target 586, 590
Buy Crompton Greaves (270) SL 265 Target 280, 282
Sell RNRL (93) SL 96
Target 88, 87
Sell Karnataka Bank (134) SL 138 Target 126, 124
Although equities, commodities have lot of considerations like yield, value, cash flow, crop, inflation, demand etc etc but in the end equity is a piece of paper and commodities is a contract but all these have a value if somebody is ready to pay a price ! for it ! . So in the end its all about MONEY.
The curiosity about money influence on equities urges me to find some co- relation of money with markets and especially Indian capital markets. Its a known thing FII money governs India indirectly . This is how a brief observation comes into the blog today comparing INR/USD with Sensex.
Views below can be termed logical or HIGHY Fictional and Stupid :) !!------Comments Invited!
INR/USD and Sensex :
FIIs convert Dollars to Rupees to invest in Indian Markets. Worldover a major concern is investment in Dollars is risky over a period of time as the currency can detoriate !
Ideally FII money should come in India at high Dollar rates !!!!
FII money would go out when Dollar dips to low values. !!
LETs term this FII dollars to be SMART MONEY which finds more money.
Now lets c some major points on Sensex from 2003 with peaks of dollar as that could trigger money push into India ideally !
Jan -May 2003 - USD/INR roughly 47-48.
Sensex moved from 3000 to 6000 and dollar dipped till 43 by May. mkts corrected to 4200 after that.
July - Sept 2005 - USD/INR 46
Sensex again moved from 5k to 12k and dollar dipped to 44-43.5 . mkts corrected to 8800 after that.
July - Sept 2006 - USD /INR 46 -47
Sensex moved from 9k to 21k and dollar dipped to 39. mkts corrected to 13k.
Maybe this is confusing but from the data it seems FII dollars starts entering into India when Dollar is quoting at a price of 45-47 or tops out and this money creates the next bull run !!! .
Lets try understand this flow of money with an example of how SMART MONEY has made more Money.
1) 1 Lakh Dollars of FII - SMART MONEY .
USD/INR - 46-47 in Aug 2006 .
This money is put into Sensex at 9-10k . So money put in is 46 lakh rupees.
Now Sensex comes till 20-21k in Oct 07-Mar 08 .
46 lakh rupees is now double or more at 90 lakh rupees and this money is now pulled out.
Now USD /INR 39-40 .
So 90 lakh rupees can now buy 2.25 lakh Dollars.
So DUMB MONEY if would have stayed in Dollars then it would have lost 15 % in value !!!
SMART MONEY is now 125 % up in 1.5 years or more instead of being 15 % down !!!
WELL now people would ask Where did the Smart Money go between Jan to August ! . For the record Crude was 90-100 in Jan and 145 + by July. !!!
In simple words FII money has been very smart with India !!
Conclusion -
Yet again Dollar is about to peak out at 44/45/46 . Doesnt this tell us SMART MONEY and all those dollars all set to come back to India and Asia in next few months to start the next BULL RUN in emerging markets!!!!
Truth is stranger than fiction.
In the next similar post in coming days we will see two camps - Optimistic /Pessimistic Indian Investor. Too late to write a whole article on it.
Sensex Technical View :
Sensex made a dip but still is above 14136 the recent low . The range is small and break below 14136 could see it go till 13700!. On the upside above 14800 can go again till 15500 . So its a tight situation as markets seem to be indecisive on the next move and traders might be bored but its better to be bored then lose a bit coz of compulsive trading. Wait for a trigger below 14100 or 14700 to watch for trading gains.
Market Observations and Thoughts :( Few lines would be there in this section now onwards which is not a recommendation but a view which is speculative , take your own call )
Inflation worries seems to have crept in again with a possibility of a CRR hike in coming weeks as per market men. Inflation may peak out around 13.5 % by Sept but as all know inflation is 2 weeks delayed can markets would be early in deciding ! . Would it be logical to buy on CRR hikes , Inflation highs .. Yes Yes :)
High Dollar prices are supporting large cap IT stocks but will Dollar stay higher ! . Good opportunity to book or reduce exposure it seems as IT as a business or growth is a concern more then the dollar or pricing now. Layoffs in mid sized cos !
Stocks to watchout for :
Castrol has given a breakout . Risky traders can buy for a 10 % move in short term.
SAIL is consolidating arnd 145-155 . A move above 156 could see it touch 170 . Traders can wait n watch for momentum. Tata Steel below 550 weak if continues to stay above then a bounce to 650 is possible.
Nifty trading below 4325 is weak and can fall to 4248 today.
one can go long above 4325 only and be cautious around 4341 as nifty might not cross 4341 for the day. closing below 4286 will be very weak for nifty for comming days
India’s largest provider of micro-irrigation systems Jain Irrigation Systems Limited (JISL) is now trading at reasonable potential and company will announce robust performance in the upcoming quarters due to recent strategic acquisitions. This niche company’s strategic acquisitions will help the company to post robust earnings in the coming quarters. As drip irrigation and food processing are priority sectors for Government, Jain Irrigation will benefit from Government spending.
Jain Irrigation stock price analysis:
CMP: 439.3
P/E: 22.4
1 year high-low: 767-410.
Jain Irrigation target price:
18-20 month target: 750-800 (conservative estimates). It is currently trading at a forward P/E of 11 for FY2010.
Ideal investment duration: 2 years.
Chart courtesy: Business Week.
Why Jain Irrigation is a good long term pick:
1. Government will promote micro-irrigation and food processing in a big way as agriculture is a priority sector. Jain Irrigation is the stock to watch out in agriculture sector.
2. Despite bad economic conditions and rising crude oil prices, company announced robust performance in Q1 FY09.
3. The International Finance Corporation (IFC) is betting big on Jain Irrigation Systems.
4. BSE moved Jain Irrigation from group B to Group A. This decision will change investors sentiment in positive manner.
5. Falling crude oil prices will raise margins due to decrease in raw material costs.
6. Company is expecting around 35% growth in U.S irrigation market despite slow down in American economy.
7. Its recent acquisitions will help the company to post very good results in the coming quarters. It acquired companies in United States, Greece, Israel and Switzerland. It made 5 acquisitions in the last 5 years.
8. It is the only listed company in the drip irrigation business.
9. Good results in Q1 FY09 but Forex losses spoilt the sentiment. 45% increase in revenues.
10. Many mutual funds are betting big on this stock due to its long term potential.
What are the negative points?
1. Comparatively high valuations.
2. High interest rates.
3. Uncertain crude oil prices.
4. American economy is slowing down.
5. Frequent dilution of equity.
6. High foreign investor holding.
The Indian market opened on positive note but not able to sustain at higher level and saw sell off on last trading hour .Nifty trade in narrow range till noon trading session and sharp selling in final trading session .For the coming session if nifty break 4284 we can test 4245-4177 zone on the other side 4345 will act resistances zone
Seen above is the 30 minutes chart of the Nifty and shows the short term trend of the market. As seen above this narrow range that the Nifty was locked into during the last one week was in the form of a symmetrical triangle. The apex of the triangle was reached today and the Nifty saw a breakthrough on the downside. The target for this breakdown is close to 4160. It is quite possible that the Nifty may complete a pullback to 4370 again before falling further. That rise could be used to take short positions (or to exit longs) in the short term.
Sensex : (14296.79) Today Sensex face resistance at 14373, if cross 14373 then goes up to 14486 and 14676. Sensex find support at 14183, if break 14183 then panic selling started and Sensex falls up to 14070 and 13850.
Nifty : (4292.10) Today Nifty face resistance at 4313, if cross 4313 then goes up to 4347 which is a big hurdle , if cross 4347 then goes up to 4400. Nifty find a strong support at his 39DMA 4273 and 50DMA 4265, if these two crucial support are broken then Nifty freefall up to 4150 which is the medium term support.
Technical Buy Call: Bata India - Rs. 167.85 1st Target: Rs 192 (4-6 weeks) 2nd Target: Rs 201 (12 -14 weeks) Stoploss: Rs 156 Bata India bottomed out by posting an intra-week low of Rs 096.00 during the week ended August 5, 2005, and these levels have not been seen since. The scrip struggled a bit...
Counters in the +ve Bajaj-Auto, Aprind, Fortis, Gujfluoro, Mangalam
and Nelcast, Brigade, IBN18, NIITECH
Use Strict SL For All Trade
Short Renuka-120 below 119 for 116-114 with sl 120.50
Short Welguj-318 below 315 for 300 with sl 320
Buy Hindzinc-564 for 574 with sl 560
Short IFCI-44.30 below 44 for 42-40 with sl 45
Short ABB-875 below 870 for 857 with sl 880
India’s largest provider of micro-irrigation systems Jain Irrigation Systems Limited (JISL) is now trading at reasonable potential and company will announce robust performance in the upcoming quarters due to recent strategic acquisitions. This niche company’s strategic acquisitions will help the company to post robust earnings in the coming quarters. As drip irrigation and food processing are priority sectors for Government, Jain Irrigation will benefit from Government spending.
Jain Irrigation stock price analysis:
CMP: 439.3
P/E: 22.4
1 year high-low: 767-410.
Jain Irrigation target price:
18-20 month target: 750-800 (conservative estimates). It is currently trading at a forward P/E of 11 for FY2010.
Ideal investment duration: 2 years.
Chart courtesy: Business Week.
Why Jain Irrigation is a good long term pick:
1. Government will promote micro-irrigation and food processing in a big way as agriculture is a priority sector. Jain Irrigation is the stock to watch out in agriculture sector.
2. Despite bad economic conditions and rising crude oil prices, company announced robust performance in Q1 FY09.
3. The International Finance Corporation (IFC) is betting big on Jain Irrigation Systems.
4. BSE moved Jain Irrigation from group B to Group A. This decision will change investors sentiment in positive manner.
5. Falling crude oil prices will raise margins due to decrease in raw material costs.
6. Company is expecting around 35% growth in U.S irrigation market despite slow down in American economy.
7. Its recent acquisitions will help the company to post very good results in the coming quarters. It acquired companies in United States, Greece, Israel and Switzerland. It made 5 acquisitions in the last 5 years.
8. It is the only listed company in the drip irrigation business.
9. Good results in Q1 FY09 but Forex losses spoilt the sentiment. 45% increase in revenues.
10. Many mutual funds are betting big on this stock due to its long term potential.
What are the negative points?
1. Comparatively high valuations.
2. High interest rates.
3. Uncertain crude oil prices.
4. American economy is slowing down.
5. Frequent dilution of equity.
6. High foreign investor holding.
Nifty As we say in yesterday post higher level works as strong resistance.. And Nifty came down once again .Side way momentum seems in all indices with negative bias.. Watch supports 4282 and 4268, below 4268 last support at 4248.. And strong resistance at 4363/4400/4435.. Our strategy for 28th Aug. above 4282 buy on deep sell at high and below 4268 sell at high buy on deep. Resistance for up move at.4330/4362/4391/ 4400/ 4435.Supports at 4282/4268/4248/4219/4118..
The Indian market opened on positive note but not able to sustain at higher level and saw sell off on last trading hour .Nifty trade in narrow range till noon trading session and sharp selling in final trading session .For the coming session if nifty break 4284 we can test 4245-4177 zone on the other side 4345 will act resistances zoneThe Nifty opened with a small upwards gap today and almost immediately started losing ground. It then went into a very narrow range of about 20 points and kept trading in those levels for the better part of the day. The bears, finally, took the index below that narrow range of 20 points when only an hour of trading was left and the index ended the day about 45 points in the red. The result is still the same, the Nifty locked inside a range of 4200-4650. As mentioned in earlier posts, a clear trend would come about if this range is broken on one of the sides. Or when the ADX indicator line starts rising again. This line was showing a value of 15 yesterday and today it has fallen further to 14. Such extremes are rare in the ADX and this clearly shows that a trending should now come about soon enough.
If we look at the charts in the posts written yesterday and the day before that, we would notice that the Nifty first made a gravestone doji (a bearish signal), and the next day it formed a dragonfly doji (a bullish sign) and today it fell down. A number of days before those dojis too it had been making red and blue candles on alternating days. A clear signal that the markets are confused and do not know which direction to take. That explains the narrow range that we are locked into.
If we look at the charts in the posts written yesterday and the day before that, we would notice that the Nifty first made a gravestone doji (a bearish signal), and the next day it formed a dragonfly doji (a bullish sign) and today it fell down. A number of days before those dojis too it had been making red and blue candles on alternating days. A clear signal that the markets are confused and do not know which direction to take. That explains the narrow range that we are locked into.
Seen above is the 30 minutes chart of the Nifty and shows the short term trend of the market. As seen above this narrow range that the Nifty was locked into during the last one week was in the form of a symmetrical triangle. The apex of the triangle was reached today and the Nifty saw a breakthrough on the downside. The target for this breakdown is close to 4160. It is quite possible that the Nifty may complete a pullback to 4370 again before falling further. That rise could be used to take short positions (or to exit longs) in the short term.
Sensex : (14296.79) Today Sensex face resistance at 14373, if cross 14373 then goes up to 14486 and 14676. Sensex find support at 14183, if break 14183 then panic selling started and Sensex falls up to 14070 and 13850.
Nifty : (4292.10) Today Nifty face resistance at 4313, if cross 4313 then goes up to 4347 which is a big hurdle , if cross 4347 then goes up to 4400. Nifty find a strong support at his 39DMA 4273 and 50DMA 4265, if these two crucial support are broken then Nifty freefall up to 4150 which is the medium term support.
Technical Buy Call: Bata India - Rs. 167.85 1st Target: Rs 192 (4-6 weeks) 2nd Target: Rs 201 (12 -14 weeks) Stoploss: Rs 156 Bata India bottomed out by posting an intra-week low of Rs 096.00 during the week ended August 5, 2005, and these levels have not been seen since. The scrip struggled a bit...
Counters in the +ve Bajaj-Auto, Aprind, Fortis, Gujfluoro, Mangalam
and Nelcast, Brigade, IBN18, NIITECH
Use Strict SL For All Trade
Short Renuka-120 below 119 for 116-114 with sl 120.50
Short Welguj-318 below 315 for 300 with sl 320
Buy Hindzinc-564 for 574 with sl 560
Short IFCI-44.30 below 44 for 42-40 with sl 45
Short ABB-875 below 870 for 857 with sl 880
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