Looks like the US markets dont want to take chances and are pressurising the law makers by dipping last evening , into passing the bailout package ASAP, so that Americans and the world goes about doing there business..The consenses remains that no one wants financial mayhem in this world..
Coming to our markets..the speed lines in the intraday 60 mins charts suggest a trading range for us..around 3800-3900-4050 app... the Fast DTI is reflecting the last 2 days upwards momentum but near zero cross over, which can reverse in opening only..
I would like to pointout here that one of the good tool to evaluate market /momentum/direction is MACD. Unfortunately in daily scale its still negative..long positions should be taken only when this starts displaying upwards momentum or positive divergence in DAILYCHARTS..I will post some charts for all to see and take/plan their investment/trading stratergy.... happy trading ..cheers.
Historically every major bull market run sees a lot of stocks or a particular sector which become multi-multi baggers and become a market fancy. Such a bull run leads to lot of excesses in the system which get totally cleaned of in the following bear phase. The over-optimism , market fancy, lofty valuations etc etc and many other reasons. Even the strongest of the companies may see a shave-off of 80-95 % from peak and may remain at lower levels for quite some time. But the strongest of the lot may come back and achieve similar highs in the next bull run and also give super returns in a span of 2-3 yrs but may remain highly sideways after the wreckage.
Lets have a few examples :
Please note all the prices used are adjusted to bonuses/splits till date and the extent of drop and run is more important.
2000 IT Boom
Infosys corrected from 1726 in 2000 to 269 in 2001 which is a correction of 84 % erosion !.
It recovered to 1700 again by 2006 .
Satyam corrected from 723 to 55 a correction of 92 % . Could only reach to 445 levels by 2006.
Wipro corrected from 1633 to 135 a correction of 88 % . Could only reach to 600 by 2006.
These were the top 3 stocks from the IT sector which could notch back comfortably in the next 5 years.
But the other small ones which caught market fancy and went to highly over-valued levels donot follow the same pattern. Although these companies may still be functioning well now but the bubble levels may never come !
GTL corrected from 2560 to 35 levels which is an erosion of 98 % . The stock could only cross 100 + levels by 2006.
ZEE corrected from 750 to 40 which is an erosion of 95 % . The stock touched 180 by 2006.
HFCL 2550 to 30 came down to almost 1 % of high. The stock is still in 2 digits till now. Pentamedia Group was another which came down to 1 % and r still in 2 digits or lower.
Investors stuck at the top of the rally lost 80-90 % of the money !!! coz of getting in late! and sticking to the mistake. And in some bad ones the total value got eroded.
Smart long term investors bought the biggies in 2001-2003 at the end of bear cycle got almost 5-10 times in next 3-5 years in strong companies with good visibility.
This was 2000-2003 now lets have a look in the excesses of the 2003-2008 bull run. The sector which saw a bubble can be termed to be real estate related stocks.
Lets have a look at the few strong ones.
DLF 1225 to 330 . Erosion of 73% .
Unitech 545 t0 98 . Erosion of 82 %
HDIL 1113 to 150. Erosion of 86 % .
These three are the stocks with high market cap compared to the rest of the gamut like orbit,ansal,parsvanath,omaxe etc etc and many more in the small cap segment. All these stocks have lost almost 80-95 % from the peak levels. I had been critical and made a specific avoid on these stocks in the last few months as one may not know where these stocks could stop although they may be good companies and may continue to function well but history says to avoid.
So what next , Ideally the calcualtions which i have seen over the data in lot of bubble stocks says that the lowest risk is to buy such stocks at 8-15 % from the peak and keep on hold for next 2 years. Although the major consideration is to make a thorough check of fundamentals and prefer to stick to companies with high visibility, earnings projection and may stay well in the business for next 3-5 years.
So in that scenario the low risk bets would be DLF , Unitech and HDIL if available at 85 % or lower and be bought in small lots in the next 3-6 mths closer to 80-90 % from peak if it comes to those levels but the holding period would be a minimum of 2 years. Accordingly one can tae only 25 % of quantity in Unitech at 90-100, HDIL at 150-165 and keep provisions to add further dips in small lots. Although this may be a risky bet now but 2 years down the line could be a different thing. Investors need to do adequate research and will have enough time as these stocks may remain sideways or down in the near term. This is just a stastistical viewpoint.
Nifty may open Around 3903, and charts shows next support around 3848-3802 levels only,
so dont stay long unless nifty is trading above 3903.
crossing 3920, nifty may move up to 3960 levels for intraday.
closing below 3903, dont dare to hold long positions
The Indian market opened on flat note and traded in red zone after touching low of 3860 nifty made attempt to pullback and managed to close in green zone .For coming session if nifty trade above 3977 it can test 4011 -4045 on the lower side 3905-3871 will act support zone .
Nifty :: Once again Nifty enter in strong resistance zone and correct exactly from our strong resistance zone 4000.. Now for 3rd Oct. in one level above 3954 momentum seems up below 3954 momentum down.. Watch strong resistance at higher level 4007/4034. Our strategy for 3rd Oct. Sell at high (Near 4007/4034 with S.L 4099, above 4099 momentum once again turn strong ) Buy on deep (Near 3858/3824 with S.L 3694).. Resistance for up move at 3970/4007/4034/4077/4099.. Supports 3908/3858/3824/3712/3694..
The Indian market opened on flat note and traded in red zone after touching low of 3860 nifty made attempt to pullback and managed to close in green zone .For coming session if nifty trade above 3977 it can test 4011 -4045 on the lower side 3905-3871 will act support zone .
***Technicals
Nifty is in terminal phase of downtrend and is correcting upwards.
Downside supports are at 3930, 3880.
Resistance will be at 4010, 4080.
Above 4120 downtrend will be terminated.
***Derivatives (October 1)
-Nifty (October) future premium increased to 16 points and around 3 lakh shares were added in open interest with increase in the cost of carry, indicating new long position at lower levels.
-Nifty call option add 12 lakh shares in open interest, whereas put option add 23 lakh shares in open interest. Thus open interest put-call ratio increased to 0.96.
-Implied volatility has decreased by 100-200 points which indicate stability in the coming days.
Nifty is in terminal phase of downtrend and is correcting upwards.
Downside supports are at 3930, 3880.
Resistance will be at 4010, 4080.
Above 4120 downtrend will be terminated.
***Derivatives (October 1)
-Nifty (October) future premium increased to 16 points and around 3 lakh shares were added in open interest with increase in the cost of carry, indicating new long position at lower levels.
-Nifty call option add 12 lakh shares in open interest, whereas put option add 23 lakh shares in open interest. Thus open interest put-call ratio increased to 0.96.
-Implied volatility has decreased by 100-200 points which indicate stability in the coming days.
***Fund flow (September 30)
~FIIs net in Index fut. + 427 cr
~FIIs net in Stock Fut. + 230 cr
~FIIs in Cash Market + 84 cr
~Mut Funds in Cash Market + 402 cr (prov.)
***total fund flow + 1143 cr today & nifty was up by 71 points.
*** So far net fund flow of + 151 cr in October series. (But nifty is down in October series).
~FIIs net in Index fut. + 427 cr
~FIIs net in Stock Fut. + 230 cr
~FIIs in Cash Market + 84 cr
~Mut Funds in Cash Market + 402 cr (prov.)
***total fund flow + 1143 cr today & nifty was up by 71 points.
*** So far net fund flow of + 151 cr in October series. (But nifty is down in October series).
***Past fund flow
-8071 cr in June series (-520), closed at 4315.
+6474 cr in July series (+18), closed at 4333.
-6641 cr in August series (-119), closed at 4214.
-6903 cr in September series (-104), closed at 4110.
-8071 cr in June series (-520), closed at 4315.
+6474 cr in July series (+18), closed at 4333.
-6641 cr in August series (-119), closed at 4214.
-6903 cr in September series (-104), closed at 4110.
Happy trading and investing.
Seen above is the daily chart of Nifty. Just like it was seen a few days back, the Nifty again displayed long lower shadows on its candles, which happens to be a short term bullish sign. The 5,3 stochastics oscillator, too, slowed down by 3 days has given a buy signal. The Nifty seems all set for a short rise from here. Possible resistance levels for this short spurt seem to be near the two green trendlines drawn. For tomorrow, one of the resistances lies near 4043 and the other lies at 4075. The Nifty, on Wednesday, after touching a high of 4000.50 dropped and finally closed at 3950.75.
Well, the Nifty is displaying short term bullishness, as the charts suggests, but also, as is evident from the charts, we still happen to be in an intermediate term downtrend with the Nifty clearly showing a pattern of lower highs and lower lows since early August. Now, which of these trends will prevail in the short term is difficult to say. It could be a downtrend since there is bearishness all across the world. But that has been there since quite a few days now, yet our Nifty is displaying strength. The Nifty may decide to go up first, touch one of the trendlines, and then fall back. And finally, the Nifty may even decide to slip from where we currently are. What will be its final decision, will be seen tomorrow. Till then be careful at 4043, 4075 and 4100 on the upperside and 3800-3850 on the downside.
After the US bailout package was defeated in the House of Representatives on Sep 29 228-205, the Senate approved the same last night with a thumping majority 74-25, says Bloomberg. The package would be sent to the ‘House’ again Friday afternoon for reconsideration. Many republicans who voted against the package last time may reconsider and switch their votes in favour of the bailout package. Despite the Senate’s approval US stocks remain down today with the Dow Jones trading with a loss of 330 points. European markets also remained weak losing between 2 and 3%. Gold has lost a few dollars while crude has slipped to $94 a barrel. The only thing that remains strong in this kind of a market is the dollar, and who can forget our very own Nifty.
Seen above is the daily chart of Nifty. Just like it was seen a few days back, the Nifty again displayed long lower shadows on its candles, which happens to be a short term bullish sign. The 5,3 stochastics oscillator, too, slowed down by 3 days has given a buy signal. The Nifty seems all set for a short rise from here. Possible resistance levels for this short spurt seem to be near the two green trendlines drawn. For tomorrow, one of the resistances lies near 4043 and the other lies at 4075. The Nifty, on Wednesday, after touching a high of 4000.50 dropped and finally closed at 3950.75.Well, the Nifty is displaying short term bullishness, as the charts suggests, but also, as is evident from the charts, we still happen to be in an intermediate term downtrend with the Nifty clearly showing a pattern of lower highs and lower lows since early August. Now, which of these trends will prevail in the short term is difficult to say. It could be a downtrend since there is bearishness all across the world. But that has been there since quite a few days now, yet our Nifty is displaying strength. The Nifty may decide to go up first, touch one of the trendlines, and then fall back. And finally, the Nifty may even decide to slip from where we currently are. What will be its final decision, will be seen tomorrow. Till then be careful at 4043, 4075 and 4100 on the upperside and 3800-3850 on the downside.
after the bail out package and indo-us nuclear deal is passed by the senate some analysts have been talking of bear mkt getting over and fresh bull run has started. but on technical charts the bearish scenario has'nt changed at all it still remains a bear mkt rally with sell on rise. the worst case scenario does'nt take into account short term rallies or bullishness. till we don't see any indications of a medium to long term uptrend developing on charts, we consider the bear phase to go on pricewise and timewise.
we will consider some techniques in case bear mkt goes on and hits lows.
nifty worst case tgts:
1)fibo:
taking 61.8% retracement of bull run 920 to 6357, the tgt according to fibo is 2997.
2)elliott wave:
after the impulse structure, "generally, a corrective wave will take the market to the area of the 4th wave of one lesser degree...especially when the corrective wave itself is a 4th wave. In other cases, the market will often find support at the top of wave 1 of one lesser degree." this sentence gives clue of the likely tgt of the ongoing correction.
the tgt according to this is either (somewhere between 3774 to 2595) or finally 2014.
3)p/e chart:
lowest ever mkt p/e was 10.84, accordingly the final lvl comes to 2522.
timewise correction:
as pointed out earlier it took slightly more than 5 years(from year 2003 to 2008-09) for the bull run to complete, so timewise atleast a period of 2 years from jan 2008 onwards is ideal for correction before next bull run starts. during the deep correction nifty will slide to lows and then consolidate. in sideways correction it may move up but will be resisted by the yearly trend channel.
we will consider some techniques in case bear mkt goes on and hits lows.
nifty worst case tgts:
1)fibo:
taking 61.8% retracement of bull run 920 to 6357, the tgt according to fibo is 2997.
2)elliott wave:
after the impulse structure, "generally, a corrective wave will take the market to the area of the 4th wave of one lesser degree...especially when the corrective wave itself is a 4th wave. In other cases, the market will often find support at the top of wave 1 of one lesser degree." this sentence gives clue of the likely tgt of the ongoing correction.
the tgt according to this is either (somewhere between 3774 to 2595) or finally 2014.
3)p/e chart:
lowest ever mkt p/e was 10.84, accordingly the final lvl comes to 2522.
timewise correction:
as pointed out earlier it took slightly more than 5 years(from year 2003 to 2008-09) for the bull run to complete, so timewise atleast a period of 2 years from jan 2008 onwards is ideal for correction before next bull run starts. during the deep correction nifty will slide to lows and then consolidate. in sideways correction it may move up but will be resisted by the yearly trend channel.
0600hrs 03 Oct 08: So the US has ended on an average 4% down. The party seems to be over for good for US. The moot question that remains is - how long are we going to take the cues from US and keep dropping? As of now Asia has not opened - not that anything positive is expected out of markets here - but all the same....
02 Oct 08: WOW what a day I had. A true day off in middle of a week. Infact it is not a bad idea to have a holiday in middle of a week. Its rejuvenating - to say the least. As if there were not enough reasons for the markets to fall - the Global markets are once again down in dumps - and they are ready to pounce upon us the moment we open. The reasons? ... Unemployment data and the factory reports, no that is not end of it - couple this with jobless claims in US that are on a seven year high. The general feeling there - I believe is that the financial rescue plan may not be good enough to ward off a recession.
AP reported that "investors appeared to be pulling more money out of the market and settling in for a prolonged economic winter. The main concern is that the $700 billion bailout plan won't be enough to stimulate growth, and the latest economic reports delivered on Tuesday demonstrate that the economy continues to struggle.
The government said the number of people seeking unemployment benefits rose last week and that demand at the nation's factories has fallen by the largest amount in nearly two years. The market is interpreting the Commerce Department report on factories as a sign that tight credit conditions are hitting manufacturers."
Even with the above the Asia was in a hangover perhaps and still not privy to this news. So only Nikkei was down 1.88% but both Hang Seng and strait times were up 1.08 and 0.20% respectively. Well this is where the good news ends. FTSE opened flat - climbed well into green but by mid session it was way down in red and finally ended 1.8% red. Dax and Cac followed exactly the same pattern and ending 2.51% and 2.25% in red respectively. US meanwhile opened along the flat line - in red but almost immediately started falling and presently around the mid session. Dow is 2.4% red, Nasdaq down 2.9% and S&P 500 both down 2.9 and 2.8% in red.
On the candles - harami did work its magic for all its worth. For the first day after a fairly long time the Bollinger bands constricted a little bit. The candle also left the bottom to end above the lower band line - moving away from it. The only problem was that this small white candle was what can be classified as a spinning top. I feel that a small explanation of the "Spinning top" is called for. Firstly, Spinning top candles have small real bodies, and they portray a stock or index plagued by uncertainty. The spinning top has small upper and lower shadows. Secondly, Spinning top candles portray situations where the market is having difficulty coming to a consensus on a security's value. They are indicative of a market in which uncertainty and indecision prevail. Neither the buyers nor the sellers have a clear sense of which direction the market will head. The forces of supply and demand are equally balanced. In the spinning top candle, the shadows are relatively small and the candle has a very small range. When combined with low volume, traders may be expressing disinterest in a particular security. And lastly, As the old cliche goes -- "when in doubt, stay out." The spinning top candle expresses doubt and confusion on the part of the market. Until the situation becomes clear, traders should emphasize careful stock selection and minimize position size.
The MACD divergence remains exactly the same as before and so does the red line that remains below the blue line. Mass Index is almost perfectly poised not to give a mid term bearish pattern. TRIX is looking down showing negativity. RSI too is negative. It is only Slow Stochastic that is giving a ray of hope and giving a buy signal. Trust it at your own peril.
Now some other good news. Crude down 94.65$ and weaker rupee. Well the weaker rupee is the good part for the exports and crude would be good for our economic engine in general. See the crude is going down on the pretext that the US in recession will lower the demand for power - so we are in middle of nowhere where on thing leads to another and not necessarily in the dame sequence.
I am waiting for the opening of Asian markets to open and will try to update tomorrow morning.
For the technically inclined.
Nifty:
R3 4139
R2 4076
R1 4013
Pivot 3937
S1 3874
S2 3798
S3 3735
Projected High range 3975 to 4045
Projected Low range 3955 to 3886
Fib Projected high 4038
Fib Projected low 3823
02 Oct 08: WOW what a day I had. A true day off in middle of a week. Infact it is not a bad idea to have a holiday in middle of a week. Its rejuvenating - to say the least. As if there were not enough reasons for the markets to fall - the Global markets are once again down in dumps - and they are ready to pounce upon us the moment we open. The reasons? ... Unemployment data and the factory reports, no that is not end of it - couple this with jobless claims in US that are on a seven year high. The general feeling there - I believe is that the financial rescue plan may not be good enough to ward off a recession.
AP reported that "investors appeared to be pulling more money out of the market and settling in for a prolonged economic winter. The main concern is that the $700 billion bailout plan won't be enough to stimulate growth, and the latest economic reports delivered on Tuesday demonstrate that the economy continues to struggle.
The government said the number of people seeking unemployment benefits rose last week and that demand at the nation's factories has fallen by the largest amount in nearly two years. The market is interpreting the Commerce Department report on factories as a sign that tight credit conditions are hitting manufacturers."
Even with the above the Asia was in a hangover perhaps and still not privy to this news. So only Nikkei was down 1.88% but both Hang Seng and strait times were up 1.08 and 0.20% respectively. Well this is where the good news ends. FTSE opened flat - climbed well into green but by mid session it was way down in red and finally ended 1.8% red. Dax and Cac followed exactly the same pattern and ending 2.51% and 2.25% in red respectively. US meanwhile opened along the flat line - in red but almost immediately started falling and presently around the mid session. Dow is 2.4% red, Nasdaq down 2.9% and S&P 500 both down 2.9 and 2.8% in red.
On the candles - harami did work its magic for all its worth. For the first day after a fairly long time the Bollinger bands constricted a little bit. The candle also left the bottom to end above the lower band line - moving away from it. The only problem was that this small white candle was what can be classified as a spinning top. I feel that a small explanation of the "Spinning top" is called for. Firstly, Spinning top candles have small real bodies, and they portray a stock or index plagued by uncertainty. The spinning top has small upper and lower shadows. Secondly, Spinning top candles portray situations where the market is having difficulty coming to a consensus on a security's value. They are indicative of a market in which uncertainty and indecision prevail. Neither the buyers nor the sellers have a clear sense of which direction the market will head. The forces of supply and demand are equally balanced. In the spinning top candle, the shadows are relatively small and the candle has a very small range. When combined with low volume, traders may be expressing disinterest in a particular security. And lastly, As the old cliche goes -- "when in doubt, stay out." The spinning top candle expresses doubt and confusion on the part of the market. Until the situation becomes clear, traders should emphasize careful stock selection and minimize position size.
The MACD divergence remains exactly the same as before and so does the red line that remains below the blue line. Mass Index is almost perfectly poised not to give a mid term bearish pattern. TRIX is looking down showing negativity. RSI too is negative. It is only Slow Stochastic that is giving a ray of hope and giving a buy signal. Trust it at your own peril.
Now some other good news. Crude down 94.65$ and weaker rupee. Well the weaker rupee is the good part for the exports and crude would be good for our economic engine in general. See the crude is going down on the pretext that the US in recession will lower the demand for power - so we are in middle of nowhere where on thing leads to another and not necessarily in the dame sequence.
I am waiting for the opening of Asian markets to open and will try to update tomorrow morning.
For the technically inclined.
Nifty:
R3 4139
R2 4076
R1 4013
Pivot 3937
S1 3874
S2 3798
S3 3735
Projected High range 3975 to 4045
Projected Low range 3955 to 3886
Fib Projected high 4038
Fib Projected low 3823
RANBAXY A VALUE BUYYING @240-250
Important Facts about FDA ban on Ranbaxy 30 Drugs.
Excerpts from the following link: http://www.fda.gov/cder/drug/infopage/ranbaxy/qa.htm
The U.S. Food and Drug Administration has issued two Warning Letters to Ranbaxy Laboratories, Ltd., an India-based manufacturer of generic drugs, some for the U.S. market. The Warning Letters address the manufacturing conditions at two different Ranbaxy plants in India, Dewas and Paonta Sahib.
Ranbaxy manufactures many drugs, and only a portion of them are made at these two plants located in Dewas and Paonta Sahib, India. At these two facilities, Ranbaxy manufactures more than 30 different generic drugs (in multiple dosage forms), such as antibiotics, anti-virals, and others, for the U.S. market.
Ranbaxy is the sole supplier to the United States of, Ganciclovir oral capsules, an anti-viral drug. FDA is generally not preventing the importation of this product to minimize any disruption to the market.
To date, FDA has no evidence of harm to any patients who have taken drugs made in these two facilities.
Additionally, consumers should know that products from Ranbaxy’s other plants are not affected by this action. FDA has inspected those facilities and to date they have met FDA standards for drug manufacturing.
Press Release from FDA.
http://www.fda.gov/bbs/topics/NEWS/2008/NEW01886.html
The problems at these two Ranbaxy plants relate to deficiencies in the company's drug manufacturing process. These actions are proactive measures that the FDA is taking in order to assure that all drugs that reach the American public are manufactured according to cGMP requirements. While this action does not involve removing products from the market, FDA has no evidence to date that Ranbaxy has shipped defective products. We will continue to monitor the situation.
The FDA recommends that consumers continue taking their medications manufactured by Ranbaxy and not disrupt their drug therapy, which could jeopardize their health.
One Warning Letter addressed problems at Ranbaxy's dewas facility found during an inspection conducted by FDA in early 2008. During that inspection, FDA investigators documented significant cGMP deviations in the manufacture of sterile and non-sterile finished products and violations with respect to the manufacture and control of APIs. Specific areas of concern included the following aspects of the firm's quality control program:
The facility's beta-lactam containment program (measures taken to control cross contamination),which appeared inadequate to prevent the potential for cross-contamination of pharmaceuticals;
Inadequate batch production and control records;
Inadequate failure investigations; (A failure investigation is done to address any manufacturing control or product rejection to determine the root cause and prevent recurrence); and,
Inadequate aseptic (sterile) processing operations.
The second Warning Letter addressed the Paonta Sahib facility following an inspection at its Batamandi unit; also in early 2008.This inspection documented various cGMP deficiencies, including the following:
The lack of assurance responsible individuals were present to determine the firm was taking necessary steps under cGMP;
Inaccurate written records of the cleaning and use of major equipment;
Incomplete batch production and control records; and,
Inadequate procedures for the review and approval of production and control records for drug products.
27% of total sales from North America, Which includes Canada as well.
Last year, sales of generic drugs in the U.S. accounted for 23 percent of Ranbaxy's total revenues. http://www.ranbaxyusa.com/
Ranbaxy has plants in 11 countries, including three in the U.S. Sales of medicines and pharmaceutical ingredients from those sites are unaffected.
Ranbaxy's plants in New Jersey and New York make 59 drugs for U.S. consumers, including: Simvastatin, Acyclovir, Minocycline, Clindamycin, Lorazepam, Loratadine-D, Cetirizine, Acetaminophen Extended release tablets, Lisinopril and Zolpidem.
We estimate that these could account for up to 30% of Ranbaxy’s current non-specialty sales in the US.
239* ANDAs approved by US FDA 93 pending approvals (As of June 30, 2008)* these numbers do not include PEPFAR applications
Drugs List
A List of Drugs Manufactured at the Dewas and Paonta Sahib Facilities of Ranbaxy Laboratories, Ltd. (Revised September 24, 2008)
http://www.fda.gov/cder/drug/infopage/ranbaxy/ranbaxy_list.htm click here.
Daiichi holding
http://www.atimes.com/atimes/South_Asia/JF19Df02.html
The takeover valued Ranbaxy, which will become a Daiichi subsidiary, at over $8.4 billion, while making the Japanese company the world's fifteenth-largest drug maker from its current rating of 22. Daiichi will raise its Ranbaxy holding to a minimum of 54.8% through an open offer to shareholders at 737 rupees (US$17) per share.
Why the Indian government is lobbying with the US for Ranbaxy?
http://www.businessworld.in/index.php/Pharma/Entry-Denied.html
After the US Food & Drug Administration (FDA) banned the entry of 30 drugs of Ranbaxy into the US citing violations in manufacturing and quality control regulations, the Indian government is reportedly willing to lobby the US on the drug maker’s behalf.
“Ranbaxy has informed us that those violations have been corrected, and it would now invite the FDA to come and inspect its facilities,” an official from the Ministry of Commerce was recently quoted as saying in a newspaper. If the FDA refused to lift its so-called ‘import alert’, the government would “discuss the matter with the US” as a “non-tariff barrier”, the official said.
Why is the Indian government carrying a brief for Ranbaxy? The FDA has clarified that Ranbaxy’s drugs are still fit for consumption and that the violations involved processes and documentation. It continues to approve drugs from other Indian firms. Moreover, is the Indian government in a position to cross swords with the FDA? India is collaborating with the FDA for training its own staff on regulatory issues, and standard setting for evaluating drug manufacturers. Ironically, this cooperation has been hailed by a section of India’s drug industry as a way to contain doubts cast on the quality and safety of Indian medicines.
Latest Update
http://www.bloomberg.com/
U.S. Offers to Withdraw Motion against Ranbaxy after Review
By Saikat Chatterjee Oct. 2 (Bloomberg) -- The U.S. government offered to withdraw a motion seeking to force Ranbaxy Laboratories Ltd. of India to turn over audit reports and other documents if the almost 500,000 pages submitted last week are found to be complete.
The government asked to have until Oct. 6 to review the materials from India's largest drug maker, according to a court filing to the U.S. district Court of Maryland, Southern Division.
``Upon confirmation that the production is complete, or if not, that a supplemental production will be forthcoming, the government will withdraw the motion,'' the filing said.
The motion will be reopened if the government decides that Ranbaxy improperly withheld any ``responsive, non-privileged documents,'' the government said in the filing.
The U.S. is probing whether Ranbaxy, based in Gurgaon, near New Delhi, destroyed reports it was required to keep, falsified data and failed to meet quality-control specifications in manufacturing the generic drugs it sells. The Indian company has denied the allegations and agreed to produce all the documents.
Separately, the U.S. drug regulator on Sept. 16 blocked the sale of more than 30 generic medicines made in two factories by Ranbaxy, because of deficiencies in manufacturing processes. The U.S. Food & Drug Administration said there was no evidence that Ranbaxy's drugs were harmful.
Our view Ranbaxy BETWEEN 240-250 As an Investment, one can buy this stock with a price tgt of 500-600 in 18-24 months.Even in short term of 6-8 weeks, we can see a price tgt of 300-320 around. At a price of 737 Daiichi has bought this stock and we are getting this @ discount of 66% from Daiichi. CMP is 251 around and is a value buy.
Important Facts about FDA ban on Ranbaxy 30 Drugs.
Excerpts from the following link: http://www.fda.gov/cder/drug/infopage/ranbaxy/qa.htm
The U.S. Food and Drug Administration has issued two Warning Letters to Ranbaxy Laboratories, Ltd., an India-based manufacturer of generic drugs, some for the U.S. market. The Warning Letters address the manufacturing conditions at two different Ranbaxy plants in India, Dewas and Paonta Sahib.
Ranbaxy manufactures many drugs, and only a portion of them are made at these two plants located in Dewas and Paonta Sahib, India. At these two facilities, Ranbaxy manufactures more than 30 different generic drugs (in multiple dosage forms), such as antibiotics, anti-virals, and others, for the U.S. market.
Ranbaxy is the sole supplier to the United States of, Ganciclovir oral capsules, an anti-viral drug. FDA is generally not preventing the importation of this product to minimize any disruption to the market.
To date, FDA has no evidence of harm to any patients who have taken drugs made in these two facilities.
Additionally, consumers should know that products from Ranbaxy’s other plants are not affected by this action. FDA has inspected those facilities and to date they have met FDA standards for drug manufacturing.
Press Release from FDA.
http://www.fda.gov/bbs/topics/NEWS/2008/NEW01886.html
The problems at these two Ranbaxy plants relate to deficiencies in the company's drug manufacturing process. These actions are proactive measures that the FDA is taking in order to assure that all drugs that reach the American public are manufactured according to cGMP requirements. While this action does not involve removing products from the market, FDA has no evidence to date that Ranbaxy has shipped defective products. We will continue to monitor the situation.
The FDA recommends that consumers continue taking their medications manufactured by Ranbaxy and not disrupt their drug therapy, which could jeopardize their health.
One Warning Letter addressed problems at Ranbaxy's dewas facility found during an inspection conducted by FDA in early 2008. During that inspection, FDA investigators documented significant cGMP deviations in the manufacture of sterile and non-sterile finished products and violations with respect to the manufacture and control of APIs. Specific areas of concern included the following aspects of the firm's quality control program:
The facility's beta-lactam containment program (measures taken to control cross contamination),which appeared inadequate to prevent the potential for cross-contamination of pharmaceuticals;
Inadequate batch production and control records;
Inadequate failure investigations; (A failure investigation is done to address any manufacturing control or product rejection to determine the root cause and prevent recurrence); and,
Inadequate aseptic (sterile) processing operations.
The second Warning Letter addressed the Paonta Sahib facility following an inspection at its Batamandi unit; also in early 2008.This inspection documented various cGMP deficiencies, including the following:
The lack of assurance responsible individuals were present to determine the firm was taking necessary steps under cGMP;
Inaccurate written records of the cleaning and use of major equipment;
Incomplete batch production and control records; and,
Inadequate procedures for the review and approval of production and control records for drug products.
27% of total sales from North America, Which includes Canada as well.
Last year, sales of generic drugs in the U.S. accounted for 23 percent of Ranbaxy's total revenues. http://www.ranbaxyusa.com/
Ranbaxy has plants in 11 countries, including three in the U.S. Sales of medicines and pharmaceutical ingredients from those sites are unaffected.
Ranbaxy's plants in New Jersey and New York make 59 drugs for U.S. consumers, including: Simvastatin, Acyclovir, Minocycline, Clindamycin, Lorazepam, Loratadine-D, Cetirizine, Acetaminophen Extended release tablets, Lisinopril and Zolpidem.
We estimate that these could account for up to 30% of Ranbaxy’s current non-specialty sales in the US.
239* ANDAs approved by US FDA 93 pending approvals (As of June 30, 2008)* these numbers do not include PEPFAR applications
Drugs List
A List of Drugs Manufactured at the Dewas and Paonta Sahib Facilities of Ranbaxy Laboratories, Ltd. (Revised September 24, 2008)
http://www.fda.gov/cder/drug/infopage/ranbaxy/ranbaxy_list.htm click here.
Daiichi holding
http://www.atimes.com/atimes/South_Asia/JF19Df02.html
The takeover valued Ranbaxy, which will become a Daiichi subsidiary, at over $8.4 billion, while making the Japanese company the world's fifteenth-largest drug maker from its current rating of 22. Daiichi will raise its Ranbaxy holding to a minimum of 54.8% through an open offer to shareholders at 737 rupees (US$17) per share.
Why the Indian government is lobbying with the US for Ranbaxy?
http://www.businessworld.in/index.php/Pharma/Entry-Denied.html
After the US Food & Drug Administration (FDA) banned the entry of 30 drugs of Ranbaxy into the US citing violations in manufacturing and quality control regulations, the Indian government is reportedly willing to lobby the US on the drug maker’s behalf.
“Ranbaxy has informed us that those violations have been corrected, and it would now invite the FDA to come and inspect its facilities,” an official from the Ministry of Commerce was recently quoted as saying in a newspaper. If the FDA refused to lift its so-called ‘import alert’, the government would “discuss the matter with the US” as a “non-tariff barrier”, the official said.
Why is the Indian government carrying a brief for Ranbaxy? The FDA has clarified that Ranbaxy’s drugs are still fit for consumption and that the violations involved processes and documentation. It continues to approve drugs from other Indian firms. Moreover, is the Indian government in a position to cross swords with the FDA? India is collaborating with the FDA for training its own staff on regulatory issues, and standard setting for evaluating drug manufacturers. Ironically, this cooperation has been hailed by a section of India’s drug industry as a way to contain doubts cast on the quality and safety of Indian medicines.
Latest Update
http://www.bloomberg.com/
U.S. Offers to Withdraw Motion against Ranbaxy after Review
By Saikat Chatterjee Oct. 2 (Bloomberg) -- The U.S. government offered to withdraw a motion seeking to force Ranbaxy Laboratories Ltd. of India to turn over audit reports and other documents if the almost 500,000 pages submitted last week are found to be complete.
The government asked to have until Oct. 6 to review the materials from India's largest drug maker, according to a court filing to the U.S. district Court of Maryland, Southern Division.
``Upon confirmation that the production is complete, or if not, that a supplemental production will be forthcoming, the government will withdraw the motion,'' the filing said.
The motion will be reopened if the government decides that Ranbaxy improperly withheld any ``responsive, non-privileged documents,'' the government said in the filing.
The U.S. is probing whether Ranbaxy, based in Gurgaon, near New Delhi, destroyed reports it was required to keep, falsified data and failed to meet quality-control specifications in manufacturing the generic drugs it sells. The Indian company has denied the allegations and agreed to produce all the documents.
Separately, the U.S. drug regulator on Sept. 16 blocked the sale of more than 30 generic medicines made in two factories by Ranbaxy, because of deficiencies in manufacturing processes. The U.S. Food & Drug Administration said there was no evidence that Ranbaxy's drugs were harmful.
Our view Ranbaxy BETWEEN 240-250 As an Investment, one can buy this stock with a price tgt of 500-600 in 18-24 months.Even in short term of 6-8 weeks, we can see a price tgt of 300-320 around. At a price of 737 Daiichi has bought this stock and we are getting this @ discount of 66% from Daiichi. CMP is 251 around and is a value buy.
Hello Friends,
We all know this financial market is like a big wild jungle which contains different kind of animals,Big,small,Tall,fat etc and all animals survive by hunting many tend to hunt each other,End result "Survival of the fittest".
Exactly same way stock market is glutted with players who try different things but with same goal "Making money".This money craving makes Traders, Try different methods few of them are listed
below.
1- Technical analysis
2- Astrology
3- Numerology
4-Tape reading
5-Gut feeling
6-Flukes (Tukka)
7-News Related
Out of these the few which i like are Technical analysis+Gut feeling+news.
I have come across few people who just don't believe in technicals at all,They turn apathetic towards technicals:)
A small initiative from me to create awareness among traders to learn
Technical analysis so that traders can find bit easy to perambulate through this
wild financial jungle.There is untrammeled scope of improvement in ones trading activity,If Technical analysis is used to make decision on trade setup.:)ofcource
Technical analysis is a vast subject and need to update regularly.
Below am posting few recent charts which fetched great rewards if technicals were
applied on them.
PS:-These examples are of classic technical analysis(entry level) still see their power.
ILLUSTRATION OF HEAD&SHOULDER and RISING WEDGE
If you find this post use full do comment, In near future would try posting about advanced Tech strategies and tool with their chart examples.
Elliot wave etc.
We all know this financial market is like a big wild jungle which contains different kind of animals,Big,small,Tall,fat etc and all animals survive by hunting many tend to hunt each other,End result "Survival of the fittest".
Exactly same way stock market is glutted with players who try different things but with same goal "Making money".This money craving makes Traders, Try different methods few of them are listed
below.
1- Technical analysis
2- Astrology
3- Numerology
4-Tape reading
5-Gut feeling
6-Flukes (Tukka)
7-News Related
Out of these the few which i like are Technical analysis+Gut feeling+news.
I have come across few people who just don't believe in technicals at all,They turn apathetic towards technicals:)
A small initiative from me to create awareness among traders to learn
Technical analysis so that traders can find bit easy to perambulate through this
wild financial jungle.There is untrammeled scope of improvement in ones trading activity,If Technical analysis is used to make decision on trade setup.:)ofcource
Technical analysis is a vast subject and need to update regularly.
Below am posting few recent charts which fetched great rewards if technicals were
applied on them.
PS:-These examples are of classic technical analysis(entry level) still see their power.
ILLUSTRATION OF HEAD&SHOULDER and RISING WEDGE
If you find this post use full do comment, In near future would try posting about advanced Tech strategies and tool with their chart examples.
Elliot wave etc.
Scrip: - Sesa Goa Ltd.
BSE Code: - 500295
CMP: - 116
Market Cap: - 4601
Target : - 145 (2-3 months)
Commodities are bottoming out and showing signs of uptrend.
Company has a good management and has shown good results in the pasts.
It has now fallen more than 50% from its peak and is even trading at a discount to the price Vedanta paid last year to acquire the company from Mitsui.
At that time: (i) iron ore prices were half that of the present levels; (ii) sales volumes were considerably lower, (iii) cash levels were also much lower; and (iv) other competitors had shied away from bidding due to imposition of Rs 300/tonne export duty on iron ore just before the process. Several factors have collectively led to this fall.
The key negatives are: (i) seasonal weakness; (ii) lower import demand from China, given curtailed steel production due to Olympics and Paralympics; (iii) global commodities sell-off as financial institutions pull out funds to enhance liquidity amidst the global financial crisis; and (iv) higher coke prices in China causing weakness in low-grade iron ore prices. However, these negatives are fading away and this will result in a dramatic shift in sentiment, going forward.
Sukhani says on this scrip "Sesa Goa is a part of the commodity play and it’s an excellent stock to own and to trade in. There is a sense that at least for investors, they have a lot of support below current prices around Rs 100, its little low but for an investor this is a good time to go and get invested in the stock. For a trader there is overhead resistance, so take Rs 10-15 chance for an upside, its worth buying for both traders and investors."
Financials of the company
BSE Code: - 500295
CMP: - 116
Market Cap: - 4601
Target : - 145 (2-3 months)
Commodities are bottoming out and showing signs of uptrend.
Company has a good management and has shown good results in the pasts.
It has now fallen more than 50% from its peak and is even trading at a discount to the price Vedanta paid last year to acquire the company from Mitsui.
At that time: (i) iron ore prices were half that of the present levels; (ii) sales volumes were considerably lower, (iii) cash levels were also much lower; and (iv) other competitors had shied away from bidding due to imposition of Rs 300/tonne export duty on iron ore just before the process. Several factors have collectively led to this fall.
The key negatives are: (i) seasonal weakness; (ii) lower import demand from China, given curtailed steel production due to Olympics and Paralympics; (iii) global commodities sell-off as financial institutions pull out funds to enhance liquidity amidst the global financial crisis; and (iv) higher coke prices in China causing weakness in low-grade iron ore prices. However, these negatives are fading away and this will result in a dramatic shift in sentiment, going forward.
Sukhani says on this scrip "Sesa Goa is a part of the commodity play and it’s an excellent stock to own and to trade in. There is a sense that at least for investors, they have a lot of support below current prices around Rs 100, its little low but for an investor this is a good time to go and get invested in the stock. For a trader there is overhead resistance, so take Rs 10-15 chance for an upside, its worth buying for both traders and investors."
Financials of the companyResults for the first quarter ended 30th June 2008 were drastic. There was robust growth of business in its E&C division, the company has done very well. YoY, net sales soared by a whopping 90% at Rs.2648.75 crore, of this, the E&C unit contributed 1557.46 crore. EBIDTA was up 51% at Rs.218.05 crore. But a look at the OPM shows that there has been pressure. Operating expenses rose 91% of which contracting charges rose by a shocking 152% and staff cost rose almost 100%. The company posted a 88% rise in PAT at Rs.111.85 crore and NPM was maintained at the same levels.The company had got into something as unrelated as internet services . And the Q1FY09 results include this profit earned on sale of this business, to the tune of Rs.14.28 crore. This too has helped boost the bottomlines.
New orders
Its order book boosted on having a order worth Rs.3,636 crore order from Qatar Petroleum for a gas transmission project, while the second order is much smaller at about Rs 190 crore for an onshore drilling project in Libya. The current order book of the company stands at Rs.24,063 crore.
Negative news
There is some worry regarding the auditor’s review, which has stated that the company has not provided for potential losses to the tune of Rs.360 crore. This loss is on account of one client – SABIC, who is not paying up the amount. But now news is that SABIC has agreed to pay Rs.110 crore immediately while the balance, Rs.250 crore is expected to be cleared by March 2009.
There is some worry regarding the auditor’s review, which has stated that the company has not provided for potential losses to the tune of Rs.360 crore. This loss is on account of one client – SABIC, who is not paying up the amount. But now news is that SABIC has agreed to pay Rs.110 crore immediately while the balance, Rs.250 crore is expected to be cleared by March 2009.
Regarding the stock
As the compnay is in progress and has good future line , so it's suggested to stay invested, long term potential looks attractive.
03-10-2008 Friday
DATE INDICATOR GREEN- BULLISH RED - BEARISH YELLOW- WAIT & WATCH
IF NIFTY SPOT DO NOT CROSS 4284 AND 4379 THEN.....
Ready for a big correction......up to 3621 & 3219.
Warning: --Our ultimate target is , so please also keep this target in your mind.
This time is needed to be very careful. If bailout goes to be happened in the America then it will not to be the positive news for the market because economic condition of the America is too bad & 2 to 3 years can spend to pass out from this economic condition till then FII’S will take income from the Indian Market, so if now market goes to up word trend then please leave on the higher level because below rates sell will be held in this market which will do to manage the shares on below rates. It’s our humble request to all the investors that please do not hurry for the shares purchasing & also do not keep your mind & eyes on TV channels advice.
Today if Nifty Future go to cross the level of 3980 then it can go up to the level of 4050, 4117 to 4153 but if Nifty Future trade below the level of 3980 then it can go below the level of 3882, 3781 to 3614.
Happy & Safe Trading
Daily Target:-
1) Sell NF Below @ 3980 Target 3882-3781 to 3614.
2) Sell BHARTFORG Below @ 184 Target 181-177 to 169.
3) Sell BOMDYEING Below @ 363 Target 354-338 to 307.
4) Sell CMC Below @ 445 Target 440-431 to 412.
5) Sell CORPBANK Below @ 272 Target 270-265 to 256.
6) Sell GNFC Below @ 89 Target 88-86 to 81.
7) Sell HLL Below @ 253 Target 250-245 to 236.
8) Sell JETAIRWAYS Below @ 399 Target 383-365 to 324.
9) Sell RELIANCE Below @ 1902 Target 1872-1832 to 1746.
10) Sell ROLTA Below @ 241 Target 237-229 to 213.
11) Buy PATNI Above @ 191 Target 197-202 to 217.
12) Buy NTPC Above @ 174 Target 177-180 to 186.
13) Buy MARUTI Above @ 702 Target 714-724 to 750.
14) Buy ICICIBANK Above @ 555 Target 572-591 to 637.
15) Buy HCL-TECH Above @ 206 Target 214-221 to 240.
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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