Dated: August 5, 2008
TATA MOTORS (397)
Indian Automakers are now ranked12th among top auto makers in the world. Tata Motors is India's largest automobile company and with crude prices cooling off and govt urging steel coes to curb prices, auto stocks should see a decent appreciation in the coming days.
Buy for a target of 470 with a stop loss of 372
Time Tenor: 1 Month
Risk Reward Ratio = 1:2.9
Probable Profit % -- 18%
Probable Loss % -- 7%
Gold, Crude Test Support
Gold
Spot gold broke through medium-term support at $910 and is headed for a test of primary support at $850. Recovery above $910 is unlikely — and would warn of a bear trap.
In the long term, gold remains in a strong primary up-trend. Failure of support at $850 is not expected — and would signal a primary down-trend.
Source: Netdania
The truth is rarely pure and never simple.
GMDC, Neyveli Lignite: Turning Lignite Into High Grade Coal
Lignite may have found an unexpected benefactor-Tata Power. TPL has recently tied up with the Australian Exergen, to fund technology creation which would lead to a conversion of Lignite (High Ash Content, Low Energy Co-efficient Brown coal) into low ash high energy co-efficient Black Coal.
If the technology succeeds not only will it open up enormous prospects for the use of Lignite resources, so abundantly available within the country, to fire up new Thermal plants, but it would be an enormous success for Neyveli Lignite and Gujarat Mineral Development which not only own the largest resources of Lignite in the country but are also running power plants on Brown coal.
Conservative estimates indicate that India would need to import close to 550 mn tonnes per annum of Thermal Coal to run its UMPP coat based plants commencing 2012-2013. Nearly $ 30 bn would be invested in just 7 ultra mega power projects with a capacity of 4000 MW each, over the next 5-7 years.
Such a huge requirement of Coal cannot be met from within the country, and while Coal imports from Australia and Indonesia will continue to burgeon, it will help if Lignite too played its own role.
VICTORIA'S brown coal industry will benefit from a multimillion-dollar investment flowing into clean-coal technology company Exergen. Indian multinational company Tata Power and Australian engineering services company Sedgman yesterday announced their investment at Beaconsfield, Tasmania, the site of Exergen's pilot plant. They join foundation investor Thiess.
The size and conditions of the investment are being kept confidential, but the money will help fund a $20 million engineering study to be conducted over the next eight to nine months.
Exergen is developing technology to remove 80% of the moisture from brown coal, effectively upgrading it to the equivalent of sub-bituminous black coal.
"The beauty of the technology is that it's so elegantly simple that it's highly efficient," Exergen general manager Greg Kukla said. "It uses very little energy, it's almost energy neutral."
Mr Kukla praised Resources and Energy Minister Martin Ferguson for helping broker the deal with Tata Power.
"If Exergen's brown coal drying technology succeeds, it will be a huge breakthrough in reducing greenhouse emissions, not only guaranteeing energy security for Victoria, but also creating export opportunities for brown coal in the future," Mr Ferguson said.
Tata Power has extensive holdings of brown coal in Indonesia and is interested in using the technology to upgrade coal for export to its Indian power stations. Exergen's engineering study will include testing the suitability of the process for Indonesian "mulia" coal.
Once the engineering study is completed, it is anticipated building will begin on a demonstration-scale plant, lasting between 12 and 18 months, at a site in the Latrobe Valley.
"The same site will then be expanded into a commercial-scale facility," Mr Kukla said. "Once we get to that stage, we're talking about a $600 million facility." It is anticipated that the plant will supply coal to Latrobe Valley power stations and to export markets.
Exergen will be competing with other companies, such as HRL, which are also developing brown coal technologies.
But Mark Wakeham, from Environment Victoria, said using coal in any form to generate electricity was no longer viable. "It may bring the rate of pollution down a fraction, but we need to move to zero or low-emissions energy," Mr Wakeham said.
JAYASWAL NEC (522285) - 4 Aug. Price: 46.55
JAYASWAL NEC is within a rising trend. Continued positive development within the trend channel is indicated. Has also broken a resistance level in the short term and given a positive signal for the short-term trading range. The stock has marginally broken up through the resistance at 46.00. An established break predicts a further rise. Volume tops and volume bottoms correspond well with tops and bottoms in the price. Volume balance is also positive, which strengthens the trend. The stock is overall assessed as technically positive for the medium long term.
The medium long term: Positive candidate
Market may open Down . Market may up between 10.35 and 10.55. Market may steady or up side between 13.07 and 13.30. Market may close at down to previous closing.
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Opening Bell Call
Buy
NTPC - NTPC Limited
GRASIM - Grasim Industries Ltd.
SELAN - Selan Exploration Technology Limited
CAIRN - Cairn India Limited
RNRL - Reliance Natural Resources Limited
POWERGRID - Power Grid Corporation of India Limited
On 4th August 2008 - The BSE Sensex closed at 14,577 (down 78 points) while the NSE Nifty closed at 4,395 (down 18 points).
Opening Bell Call
Sell
RELIANCE - Reliance Industries Ltd
HINDUNILVR - Hindustan Unilever Limited
TCS - Tata Consultancy Services Limited
GLENMARK - Glenmark Pharmaceuticals Ltd.
ABIRLANUVO - Aditya Birla Nuvo Limited
Technical Analysis for 5th August 2008
BSE-SENSEX - Major Support - 14601, 14540, 14478, 14429, 14379, 14268, 14157, 14046
BSE-SENSEX - Major Resistance - 14651, 14700, 14762, 14823, 14934, 15045, 15156, 15267
NSE-NIFTY - Major Support - 4397, 4378, 4359, 4341, 4323, 4286, 4249, 4212
NSE-NIFTY - Major Resistance - 4415, 4433, 4452, 4417, 4508, 4545, 4582
Sensex Technical View :
Well its difficult to write on sluggish sensex moves these days ! .. The levels to watch are 14200 on support and 15100 on resistance.
Although index has not moved much lot of the discussed stocks have moved up 30-40 % in short term so its important to be focussed !!! And as being mentioned that do homework and those who did have been making good gains in past few weeks :)
Stocks to watchout for :
Andhra Sugars ( client pick ) moves up smartly 98 to 118 , Sakthi inches up almost 35% frm reco all other sugars running as suggested few days back .
.Titan rocks does 1270 + , Gmr infra continues, First leasing safe bet hold ...All the long term picks for investment are giving returns in short term -- Tata Chemicals 250 to 330 , Rohit ferro , Sakthi Sugars etc etc ...
Century Textiles buy above 525 for a tgt of 560 + .Indus Ind above 63 could move 10 -15 % .Quick traders can buy Welspun arnd 345-350 with 10 rs stop for tgt of 375.
Lupin has crossed 760 and closing above it for few days can give a move to 850 + .
RPL is on the verge of a breakout. Traders can buy for a short term tgt of 190+
Good reports seen in the caustic soda related companies .. ( tata chemicals over ran tgts coz of that ) .... Bihar Caustic is firming up on charts buy on dips to 68 -70 for a tgt of 90 in medium term
High risk short term pick :
GHCL ltd cmp 80
The stock has given a good breakout on charts today above 74-76 and hit a 20 % freeze today. But there are rumours of a possible takeover since last many months and an open offer after that. Risky traders can buy for short term tgt of 100 + .
long term bet :
Indsil Electro Smelt :
The company is getting into a mining foray into manganese mining and has got into a JV etc etc. Details of all these can be searched on the net :) .... Check bse announcements . Will put up a detailed view on this alternate power and minin pick as lil late tonight to write more !
Long term investors can take partial exposures at dips or current levels
crossing 4450 nifty can hit 4480-4501 levels.
however as u ll have seen the resistence around 4440 levels, so i would advise longs only above 4450 levels.
for positional traders, today's low(4362) is gonna be an important SL
Intraday Pick :: (Buy) DIVIS LABS
Pivot Levels for NIFTY 50 Stocks (05 Aug 2008)
Sensex / Nifty Outlook for 05 Aug 2008
Nifty Trading Near Major Resistance : Is the Party OVER?
One and only chance of recovery is Drastic decrease in Crude Oil.
But Right Now Crude is having buy signal so worry in shor term
if we close below the 20 Day EMA 4261. Any close below the 20 Day
EMA we are heading down.. Down
But Remeber One thing Still Nifty is in buy zone and can do any
sort of magic. Closing below 20 Day EMA is a worry
Till Then We are going to move in accordance with the global markets
morning thoughts..
The markets reacted and remained highest volatile as expected and gave wild swings.
On the 30 hema and 60 hema the charting doji is still in an undecisive mood .
Technically the nerve and the internal of the market still looks weak and nervous.
However the structure of the market depicts another round of volatility and wild swings.
Moreover as said the strategy remains to buy dips, and not sell rises.
The supports for the nifty is at 4355 levels and resistance at 4625 levels
The supports for the sensex is at 14355 levels and resistance at 15355 levels
Stocks to watch
Ghcl
Torrent power
Titan
Positional calls
August series
Option drum
Following call options in holding
Nagarjuna 40 ca – moving above targets ,still holding
Gmr 105 ca – near targets
Mrpl 75 ca – has doubled in a day , still holding
Rnrl 105 ca – moving above targets
Idbi 85 ca – near targets
Nifty :: As we say in our yesterday post 4445 work as strong resistance and Nifty unable to cross this level.. Now for 5th Aug. watch breakout level and strong resistance at 4432/4449.. Mid term momentum is still up.. Any corrective down move give us buying opportunity.. Our strategy for 5th Aug. up to 4450 sell at high (S.L 4450) Buy on dip (S.L 4286) above 4450 change strategy as buy on dip (S.L 4360) Sell at high (S.L 4540).. Resistance for up move at 4432/4449/4496/4540/4620.. Supports at 4377/4360/4309/4286.
Our friend K.Rao has sent me an interesting chart with his annotations. My view on this - there is still more down side in terms of price but a time wise correction will be more frustrating - I can stick my neck out and say that we won't see the highs again for the next 18 months.
The Indian market opened on flat note and traded sideway and narrow range ,it was volatile trading session .For the coming session if nifty break 4340 levels we can see more selling pressure and breakout above 4450 we can test 4560-4583 levels.STOCK OF THE DAY :
NAME:DENA BANK (AROUND 48.8-49)
SL : 48
TRGT: 49.6-50.5-51
REVISED SL TO : 48.8 IF 49.5 IS ACHVD
Everest Kanto Cylinder (EKC) is a leader in the industrial and CNG cylinders manufacturing business in India. It commands an overall market share of 85% in CNG cylinder industry & is well placed to tap the growing market for environment-friendly Compressed Natural Gas (CNG) applications.
Compressed Natural Gas (CNG) offers a feasible alternative to petroleum fuels in vehicles. CNG is a source of mobile-energy, which can be easily supplied on a mass scale at affordable prices. Due to its inherent clean properties, the substitution of petrol & diesel by CNG is advantageous in not only enhancing energy security but also in cutting harmful GHG emissions.
Roughly 800,000 vehicles in Pakistan run on compressed natural gas (CNG). Each needs a specialised cylinder where the CNG is stored under high pressure. And, an Indian company — Everest Kanto Cylinders — is controlling 65 per cent of this market.The company makes CNG cylinders in India and Dubai and sells them in Malaysia, Thailand, several Gulf countries and CIS nations, besides Pakistan.
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Bombay Paints Ltd - Recommendation
Everest Kanto's story turned out differently because its founder chairman and managing director P.K. Khurana spotted a good opportunity in South America. Here, Brazil and Argentina were using CNG as a low-cost, environment-friendly fuel for automobiles, and had approximately 10,00,000 CNG vehicles on their roads. Wondering whether CNG would catch on in India as well, Khurana sent study teams to South America and the US. Initial research convinced him that this would be a good business opportunity in India.
Leading cylinder manufacturer Everest Kanto (plans to invest Rs 1.5-1.75 billion on capacity expansion across its plants in US, Dubai and India.The company expects to clock 35% increase in volumes and 50% increase in earnings in the current fiscal. Also company`s wholly owned subsidiary in China has successfully completed the trial production phase and commercial production has been already started.
EKC is ramping up its capacity to enhance its market share and is also planning to exploit other markets such as Iran and China, where a well timed capacity expansion would drive a ~36.8% EPS CAGR over FY08-FY10E.Point to Watch: 4418
Support: 4395, 4340, 4324, 4318, 4227, 4254, 4176, 4168, 4101(05), 4089, 4049, 4031, 4017, 4009, 3996, 3932, 3855, 3738
Resistance: 4400, 4460(68), 4493, 4504
- Halts just above Support 4395
AIRDECCAN : Up only above 82.65 – Resistance 86
BHARATFORG : Up only above 258
HINDCONS : Up only above 88.5
IDFC : Watch 98.2
IRB : Up only above 137.55
ITC : Up only above 186
NTPC : Up only above 172.45 Resistance 183-184
POWERGRID : Up only above 93.75
RCOM : Up only above 423.15
RELCAPITAL : Up only above 1342
RELIANCE IND: Up only above 2305
RPL : Up only above 169.5
SAIL : Up only above 145
TATA STEEL : Up only above 682
ZEE EL: Up only above 194.05
MOODY MAY DOWNGRADE INDIA , NIFTY REMAIN SUBDUED.
NIFTY FUT NOT ABLE TO SUSTAIN ABOVE 4444. BUT YET NOW NIFTY HAS NOT CONFIRMED THE WEAKNESS. TO SEE A GOOD UP MOVE NIFTY-FUT SHOULD TRADE ABOVE 4444.
Alert :-- Please do not hold any long position and go home, any time bears will attack. So please be alert now.
As we are writing continuously that there is no strength in the market & selling pressure goes to start on the upper level. When Nifty Spot do not give the continuously closing for 2 days after cross the level of 4429 till then please do not hope for any bull run. If Market trades below this level then it will the very big fault that if any body makes long position.
Today if Nifty Future cross the level of 4428 then it can go up to the level of 4463, 4506 to 4525 but if Nifty Future goes to break the level of 4382 then it can go below the level of 4362, 4305 to 4204.
Daily Target:-
1) Sell ASIANPAINT Below @ 1223 Target 1187-1149 to 1130.
2) Sell BOB Below @ 275 Target 262-248 to 240.
3) Sell BPCL Below @ 326 Target 317-306 to 301.
4) Sell CMC Below @ 506 Target 487-466 to 456.
5) Sell GAIL Below @ 385 Target 373-361 to 355.
6) Sell HDFCBANK Below @ 1105 Target 1065-1022 to 1000.
7) Sell ICICIBANK Below @ 637 Target 608-576 to 560.
8) Sell IFCI Below @ 50 Target 47-43 to 42.
9) Sell ONGC Below @ 979 Target 945-909 to 891.
10) Sell RCOM Below @ 436 Target 421-405 to 396.
11) Sell Wipro Below @ 429 Target 410-390 to 379.
12) Buy TISCO Above @ 693 Target 707-720 to 753.
13) Buy TATAMOTOR Above @ 399 Target 404-410 to 424.
14) Buy POLARIS Above @ 104 Target 107-110 to 118.
15) Buy BHARTIARTL Above @ 820 Target 828-838 to 860.
Note--- If market open green then buy our buying tips and If market open red then sell our sell tips.
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main Target level nifty--- 4033, 3484 & 2604 sensex-- 13538, 11727 & 9071.( date -21-03-2008)
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Critical period now...Aug 05, 2008
After a longtime am resuming my updates. NIFTY is in a very crucial zone now. It is near the long term reverse trendline from 6000 levels. (I am unable to upload charts today. For some reason, blogger is throwing errors when I try to upload it). Any break above 4440 will be very bullish. But market seems to be struggling now. The momentum is still sideways keeping us guessing whether it will break up or down. If it does not cross 4440 quickly and breaks down, the possibility of testing 3600 remains high. I have already picked up a 3800 put at 20 rs. If market breaks down, this should yield good returns. Else, I will simply use it to hedge my longs. But trust me its worth the risk and would recommend a similar strategy to others as well.
Exports comprise 50-80% of revenues of Indian pharma companies, and most of the invoices are US$ denominated. Rupee has depreciated by c.9% against the USD and c.7% against Euro in the quarter (17% against Euro YTD). Following forecasts of rupee depreciation by our economics team, we have changed our assumptions to Rs43/US$ in FY09 and Rs45/US$ in FY10. One percent depreciation in rupee results in c.1.33% upgrade in operating earnings (assuming exports comprise 50% of overall revenues).We have raised estimates for Cipla and Dr. Reddy's by 6-13% for FY09 and FY10. Translation losses on US$600m+ FCCB/ECB for Ranbaxy will have significant one time impact on 2QCY08 results. Sun Pharma would gain significantly with current earnings momentum being driven by limited competition in antaprazole (though non-recurring).
Betapharm likely to revive led by significantly beneficial currency movement, site transfers for a number of products and dismissal of national AOK contracts. Longer term concerns related to German pharma market remain. Significant portion of DrReddy's earnings (15%+) are contributed by Allegra. While the competition might not increase in near term, we remain concerned on dependence of earnings from this product. Losses on forex hedges would impact DrReddy's significantly with US$380m outstanding hedges at average Rs41/US$. Our economics team forecasts Euro to substantially weaken against US$ and in turn against rupee as well (US$/Euro average 1.3 in FY09 and average 1.2 in FY10) – this potentially can lead to further impact on earnings of DrReddy's. Other income in case of Cipla would decline as they had forex gains in FY08.
Rupee has depreciated by c.9% against the USD and c.7% against Euro in the quarter (17% against Euro YTD). Following forecasts of rupee depreciation by our economics team, we have changed our assumptions to average Rs43/US$ in FY09 and average Rs45/US$ in FY10. One percent depreciation in rupee results in c.1.33% upgrade in operating earnings (assuming exports comprise 50% of overall revenues). Our economics team forecasts Euro to substantially weaken against US$ and in turn against rupee as well (US$/Euro average 1.3 in FY09 and average 1.2 in FY10) – this potentially can lead to downward impact on earnings of DrReddy's as it has the highest Euro exposure.
Market Technicals for the week ending 08th Aug
Indian Markets Technicals
Both Nifty & Sensex has become a bit strong at these levels. The trend for fresh buying positions will continue if the markets continue to trade beyond 4331 & 14355. There are chances that Nifty may move 182 - 183 points up & Sensex may move 653 - 654 points up. There are chances of a weekly movement of around 525 points & 1910 points in Nifty & Sensex respectively.
If the markets sustain above 4504 & 14983 levels, then they will try to touch 4595 & 15310 levels.
On the other hand, market has a weak support at 4240 & 14028 because the markets may further fall down to 4068 & 13400 levels from this point due to panic selling & profit booking which can act as a strong support.
US Markets Technicals
Both Nasdaq & Dow has become a bit weak at these levels. The trend for fresh buying positions will continue if the markets continue to trade beyond 2307 & 11346. There are chances that Nasdaq may move 91 - 92 points up & Dow may move 481 - 482 points up. There are chances of a weekly movement of around 185 points & 920 points in Nasdaq & Dow respectively.
If the markets sustain above 2356 & 11566 levels, then they will try to touch 2402 & 11807 levels.
On the other hand, market has a weak support at 2261 & 11105 because the markets may further fall down to 2212 & 10884 levels from this point due to panic selling & profit booking which can act as a strong support.
Intraday Market Technicals for 05th August
Both Nifty & Sensex has become a bit strong at these levels. The trend for fresh buying positions will continue if the markets continue to trade beyond 4398 & 14602. There are chances that Nifty & Sensex may open 11 - 12 points down & 44 - 45 points down. There are chances of an intraday movement of around 75 points & 245 points in Nifty & Sensex respectively.
If the markets sustain above 4433 & 14701 levels, then they will try to touch 4471 & 14824 levels.
On the other hand, market has a weak support at 4360 & 14478 because the markets may further fall down to 4324 & 14380 levels from this point due to panic selling & profit booking which can act as a strong support.
Derivatives Calls
Futures
Buy Nifty Aug' 08 Futures above 4450.00 levels with a target of 4516.00 & with a stoploss/ average below 4417.00.
Buy HDIL Aug' 08 Futures above 488.00 levels with a target of 519.00 & with a stoploss/ average below 472.00.
Options
Buy Nifty 4600.00 CE Aug' 08 with a target of 129.00 & with a strict stoploss below 53.00.
Buy IDFC 100.00 CA Aug' 08 with a target of 10.50 & with a strict stoploss below 4.25.
Long Term Delivery Calls
We strongly recommend a buy on Repro India at current levels with a long-term target of 183.00.
We strongly recommend a buy on Guj. NRE Coke at current levels with a long-term target of 259.00.
Medium Term Delivery Calls
Buy BGR Energy if it sustains above 320.00 levels with a medium-term target of 373.00 & with a stoploss/ average below 293.00.
Short Term Delivery Calls
Buy Aarvee Denim if it sustains above 66.00 levels with a short-term target of 72.00 & with a stoploss/ average below 63.00.
Buy Adhunik Metaliks if it sustains above 123.00 levels with a short-term target of 139.00 & with a stoploss/ average below 115.00.
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