The Indian market opened on gap-up note and saw smart rally at the afternoon session and close with handsome gains. For coming session 3158 level is main hurdle for nifty if it cross it can test 3210- 3234 zone on the lower side 3101 levels will act as support zone .
Short term Overbought Nifty corrected itself in a sideways mode through the day and continued its upward movement after briefly breaking the channel.
This uptrend has crossed the previous top of 3110 convincingly by closing above that.
Any corrections should be used to enter longs. The risk reward is in favour of bulls as the weekly is getting into buy mode.
If we take the move from 2570(Or 2503) to 3110(540 points) as the 1st wave(A) up, then this move from 2813(After a correction from 3110-2813) will be a 3rd wave(Or C)(2813 + 540 = 3353 Min or 3686)which is generally a most profitable wave.
If this upmove is a larger "B" up, then the upsides are much higher. Anyway that is still a far away event. The point I am trying to convey is, use weaknesses to enter longs. You can ride this upmove by staying close to the 5 DMA or 5 EMA.(Buy near it and book out when you have rallied farther away from it).
We might encounter an intra week correction either from tomorrow afternoon or wednesday depending on the short term technicals. I will book out only when I see a negative divergence in hourly or in the region of 3160 to 3240 area.
This uptrend has crossed the previous top of 3110 convincingly by closing above that.
Any corrections should be used to enter longs. The risk reward is in favour of bulls as the weekly is getting into buy mode.
If we take the move from 2570(Or 2503) to 3110(540 points) as the 1st wave(A) up, then this move from 2813(After a correction from 3110-2813) will be a 3rd wave(Or C)(2813 + 540 = 3353 Min or 3686)which is generally a most profitable wave.
If this upmove is a larger "B" up, then the upsides are much higher. Anyway that is still a far away event. The point I am trying to convey is, use weaknesses to enter longs. You can ride this upmove by staying close to the 5 DMA or 5 EMA.(Buy near it and book out when you have rallied farther away from it).
We might encounter an intra week correction either from tomorrow afternoon or wednesday depending on the short term technicals. I will book out only when I see a negative divergence in hourly or in the region of 3160 to 3240 area.
NIFTY FUTURE
ABOVE 3138 TARGET 3178-3274
BELOW 3102 TARGET 3094-3083-3049
Sell NTPC below 180 SL 183 Target 178-176-174
Sell INDIAINFO below 63.50 SL 67 Target 60-56
Sell MARUTI below 556 SL 569 Target 543-531
Sell SATYAM below 159 SL 169 Target 150-141
Buy TATACOMM above 526 SL 515 Target 530-534-539
Buy INFOSYS above 1188 SL 1142 Target 1200-1223
Japanese equity research firm, Nomura Securities, released “Titans- Heroes- Mortals” report on Asian Companies which will give an idea about the future growth prospects of the Indian Companies. Nomura picked 5 Titans and 6 Heroes among Indian Companies which will have better growth prospects. Blog readers should treat it as another aid in their research to pick good companies but not as an investment advice. In stock markets, entering at right price is also important along with picking a great stock. I am bullish on IVRCL Infra and Glenmark but am waiting for right price.
Research firm followed the Graham and Dodd approach of value investing in picking Titans and Heroes. Company released similar report on China (7 titans and 12 heroes), Korea (2 titans and 2 heroes only), Malaysia (2 titnas and 2 heroes), Singapore (7 titans and 3 heroes) and Taiwan (7 titans and 2 heroes) Companies.
Nomura views on economy and stocks:
1. Asia is in a best position than America but few companies tend to have control over their own destiny and equities will perform relatively badly against bonds.
2. There have been no signs of a turnaround during the past quarter in purchasing management indices or export orders to suggest that Asian equity markets will sustain a rally on the back of changing growth expectations. Companies appear to be locked in a classic inventory build-up, since the demand shock did not allow them to adjust their production schedules quickly enough. Moreover, working capital requirements have tightened and trade finance remains difficult to obtain for exporters.
3. We entered the second half of 2008 with an Overweight stance on China and India, since both countries had low export-to-GDP ratios and were prime beneficiaries of falling commodity prices.
4. We continue to have a bias in the short term toward value, since we can still find financial assets trading below intrinsic value or creditworthiness, such as convertible bonds. We would look to re-weight growth stocks as 4Q08F earnings are released and as companies guide down expectations further during 1Q09F.
5. Our favoured sector is infrastructure.
My view: India is in best position to take the leadership position in economy but lack of great political leadership and corruption are our main problems. India needs a visionary leader to steer us through the current troubled waters.
Titans-Heroes-Mortals report:
Titans: Best Indian Companies in their sectors and will use the current opportunity to strengthen their position in their segment.
1. Reliance Industries: I have some doubts over the company performance over short term.
2. Larsen and Toubro: I already said enough about this Company.
3. NTPC: Good stock but what about stock market returns.
4. Hindustan Unilever: Good sales but what about valuations.
5. Sun Pharma: Best Pharma stock and will continue to announce bumper results in the coming quarters.
Heroes: Future stars- favorite stocks for growth investors.
1. Tata Power: Positive growth prospects but I have some doubts on financial front.
2. Maruti Suzuki: More clarity is needed.
3. IVRCL Infra: Rare infra company which is not facing any financial troubles. IVRCL is a must buy when markets correct in the coming months.
4. Marico: Good Company but I always try to accumulate growth stars.
5. Piramal Healthcare: Company is making strategic moves but take time.
6. Glenmark: Company will outperform other Pharma stocks if market conditions improve. This is a must buy when market corrects to reasonable levels.
Mortals: Never become leaders
1. Unitech
2. TVS Motors
Stock market news:
1. Indraprastha Gas Limited (IGL) will continue to enjoy monopoly in the National Capital Region (NCR).
2. Cement stocks will be in limelight for some more days due to better than expected results estimates.
3. Tata Communications is the dark horse, according to many analysts.
4. Hats off to Narendra Modi for announcing new industrial policy for Gujarat. We need such concrete measures at centre to face current slow down.
5. I am positive on growth prospects of Mundra Port but current valuations are not sustainable.
6. Best auto companies by sales are Hyundai in 4-wheelers and Yamaha in 2-wheelers. Unfortunately, both Companies are not listed in the Indian stock markets.
GDP estimates by Goldman Sachs:
1. GDP growth in 2007-08 was at: 9% and expected to cross 10% in 2008-09 (at that time).
2. (Now) GDP growth estimate in 2008-09: 6.7%. My estimate is 6.2-6.5%. Fiscal deficit is expected to touch 6-8% of GDP in this financial year. Just imagine what will happen to our economy if the money from the stimulus packages will not be used in a proper way. Do you know why these politicians prefer real estate and infrastructure? Not to build India but to build their coffers in the election year which is very easy for them in these 2 sectors?
3. GDP growth estimate in 2009-10: 5.8%. My estimate is around 5%.
Special mention: Hats off to Brokers for successfully creating a "feel good atmosphere" in a gloomy economy. Politicians need to learn some tricks from these stock brokers.
Special thanks to Mohit Singhania and Ramakrishna (NRIs).
Recession news:
1. Sweden based Software company UIQ, jointly owned by Sony Ericsson and Motorola filed for bankruptcy.
2. U.S. jobless rolls reached a 26-year high in the week ended December 20. 20 lakh Americans lost jobs in 2008.
3. GM'a U.S. sales plunged to a 49-year low in 2008.
4. What will happen to economy?
5. Indian Companies are set to announce worst results in 6 years. ICICI Bank, Bajaj Auto, Tata Motors, Ranbaxy and ONGC are some of the poor candidates.
6. BPO Companies may create 1 lakh jobs in the next 3 months if Obama will not create any hurdles.
7. Indian IT companies will announce worst results in the recent years.
8. Germany set to announce grand stimulus package with tax cuts. US may soon follow.
9. Barack Obama is seeking Congress support to announce $800 billion bailout package with more stress on tax cuts ($300 billion) to improve the consumption power of people.
10. Madoff scam is worsening day by day.
11. Construction activity reached worst ever recorded levels in England.
12. What can happen to American Banking sector in 2009?
13. 10 best economic books of 2008.
Research firm followed the Graham and Dodd approach of value investing in picking Titans and Heroes. Company released similar report on China (7 titans and 12 heroes), Korea (2 titans and 2 heroes only), Malaysia (2 titnas and 2 heroes), Singapore (7 titans and 3 heroes) and Taiwan (7 titans and 2 heroes) Companies.
Nomura views on economy and stocks:
1. Asia is in a best position than America but few companies tend to have control over their own destiny and equities will perform relatively badly against bonds.
2. There have been no signs of a turnaround during the past quarter in purchasing management indices or export orders to suggest that Asian equity markets will sustain a rally on the back of changing growth expectations. Companies appear to be locked in a classic inventory build-up, since the demand shock did not allow them to adjust their production schedules quickly enough. Moreover, working capital requirements have tightened and trade finance remains difficult to obtain for exporters.
3. We entered the second half of 2008 with an Overweight stance on China and India, since both countries had low export-to-GDP ratios and were prime beneficiaries of falling commodity prices.
4. We continue to have a bias in the short term toward value, since we can still find financial assets trading below intrinsic value or creditworthiness, such as convertible bonds. We would look to re-weight growth stocks as 4Q08F earnings are released and as companies guide down expectations further during 1Q09F.
5. Our favoured sector is infrastructure.
My view: India is in best position to take the leadership position in economy but lack of great political leadership and corruption are our main problems. India needs a visionary leader to steer us through the current troubled waters.
Titans-Heroes-Mortals report:
Titans: Best Indian Companies in their sectors and will use the current opportunity to strengthen their position in their segment.
1. Reliance Industries: I have some doubts over the company performance over short term.
2. Larsen and Toubro: I already said enough about this Company.
3. NTPC: Good stock but what about stock market returns.
4. Hindustan Unilever: Good sales but what about valuations.
5. Sun Pharma: Best Pharma stock and will continue to announce bumper results in the coming quarters.
Heroes: Future stars- favorite stocks for growth investors.
1. Tata Power: Positive growth prospects but I have some doubts on financial front.
2. Maruti Suzuki: More clarity is needed.
3. IVRCL Infra: Rare infra company which is not facing any financial troubles. IVRCL is a must buy when markets correct in the coming months.
4. Marico: Good Company but I always try to accumulate growth stars.
5. Piramal Healthcare: Company is making strategic moves but take time.
6. Glenmark: Company will outperform other Pharma stocks if market conditions improve. This is a must buy when market corrects to reasonable levels.
Mortals: Never become leaders
1. Unitech
2. TVS Motors
Stock market news:
1. Indraprastha Gas Limited (IGL) will continue to enjoy monopoly in the National Capital Region (NCR).
2. Cement stocks will be in limelight for some more days due to better than expected results estimates.
3. Tata Communications is the dark horse, according to many analysts.
4. Hats off to Narendra Modi for announcing new industrial policy for Gujarat. We need such concrete measures at centre to face current slow down.
5. I am positive on growth prospects of Mundra Port but current valuations are not sustainable.
6. Best auto companies by sales are Hyundai in 4-wheelers and Yamaha in 2-wheelers. Unfortunately, both Companies are not listed in the Indian stock markets.
GDP estimates by Goldman Sachs:
1. GDP growth in 2007-08 was at: 9% and expected to cross 10% in 2008-09 (at that time).
2. (Now) GDP growth estimate in 2008-09: 6.7%. My estimate is 6.2-6.5%. Fiscal deficit is expected to touch 6-8% of GDP in this financial year. Just imagine what will happen to our economy if the money from the stimulus packages will not be used in a proper way. Do you know why these politicians prefer real estate and infrastructure? Not to build India but to build their coffers in the election year which is very easy for them in these 2 sectors?
3. GDP growth estimate in 2009-10: 5.8%. My estimate is around 5%.
Special mention: Hats off to Brokers for successfully creating a "feel good atmosphere" in a gloomy economy. Politicians need to learn some tricks from these stock brokers.
Special thanks to Mohit Singhania and Ramakrishna (NRIs).
Recession news:
1. Sweden based Software company UIQ, jointly owned by Sony Ericsson and Motorola filed for bankruptcy.
2. U.S. jobless rolls reached a 26-year high in the week ended December 20. 20 lakh Americans lost jobs in 2008.
3. GM'a U.S. sales plunged to a 49-year low in 2008.
4. What will happen to economy?
5. Indian Companies are set to announce worst results in 6 years. ICICI Bank, Bajaj Auto, Tata Motors, Ranbaxy and ONGC are some of the poor candidates.
6. BPO Companies may create 1 lakh jobs in the next 3 months if Obama will not create any hurdles.
7. Indian IT companies will announce worst results in the recent years.
8. Germany set to announce grand stimulus package with tax cuts. US may soon follow.
9. Barack Obama is seeking Congress support to announce $800 billion bailout package with more stress on tax cuts ($300 billion) to improve the consumption power of people.
10. Madoff scam is worsening day by day.
11. Construction activity reached worst ever recorded levels in England.
12. What can happen to American Banking sector in 2009?
13. 10 best economic books of 2008.
Sensex Technical View :
Sensex has broken out above 10200 which was the recent top as well as above the trendline joining post october tops. Ideally such a scenario should open up a minimum target zone of 10600-10900 and on an optimistic note even 11650 +.
The current move would face resistance around 10600-10900 band on upper side.
In the extreme short term Sensex has made a move of 1000 points in 6 sessions which is suggests we could see some breather or dip from higher resistance levels before taking another shot at a breakout move.
Support for any dip should come around 9700 zones. The lower level for the triangle is around 9300-9500 which remains the most important medium term support.
Market Observations and Thoughts :
Of late ever the recent lows have been 7700 /8300 /9100. At the same time highs have been 10900 /10200 and now going on.
If we see in these period markets have given goood clean moves of 10-20 5 for traders on long side in index and super moves in specific stocks of 30-50 % quite many times.
But there have hardly any believers in the rally !! Lot many puts have turned to pits :P with time. Simple logic --- In bull markets there are dips and breathers , in bear markets there are rallies. So we are in midst of one let it give reversal signals till then trail.
Our approach has been simpler to trade with long bias on stock specific with a trading view to generate gains !!! has been profitable.
FEW DAYS BACK I HAD WRITTEN --- Crude bottom is in place when it hit 33 odd in Jan contracts and then drifted a bit to 37 before pulling back sharply to 45-48 now. The view was to stop shorts and go small longs . Tgt levels are 49 and 55 in extreme short term.
Stocks to watchout for :
All the stocks discussed recently have inched up slowly and are continuing the uptrend slowly. The best way to trade such a trend is to book partial profits at resistance /target levels and keep trailing stops to ride the gains.
ONGC has resistance around 740. Reliance Inds around 1410 . HDFC around 1700. These are levels corresponding to index resistances.
Fresh calls to be triggered in the day as lot many stocks are nearing our target levels and are bein trailed.
Sensex has broken out above 10200 which was the recent top as well as above the trendline joining post october tops. Ideally such a scenario should open up a minimum target zone of 10600-10900 and on an optimistic note even 11650 +.
The current move would face resistance around 10600-10900 band on upper side.
In the extreme short term Sensex has made a move of 1000 points in 6 sessions which is suggests we could see some breather or dip from higher resistance levels before taking another shot at a breakout move.
Support for any dip should come around 9700 zones. The lower level for the triangle is around 9300-9500 which remains the most important medium term support.
Market Observations and Thoughts :
Of late ever the recent lows have been 7700 /8300 /9100. At the same time highs have been 10900 /10200 and now going on.
If we see in these period markets have given goood clean moves of 10-20 5 for traders on long side in index and super moves in specific stocks of 30-50 % quite many times.
But there have hardly any believers in the rally !! Lot many puts have turned to pits :P with time. Simple logic --- In bull markets there are dips and breathers , in bear markets there are rallies. So we are in midst of one let it give reversal signals till then trail.
Our approach has been simpler to trade with long bias on stock specific with a trading view to generate gains !!! has been profitable.
FEW DAYS BACK I HAD WRITTEN --- Crude bottom is in place when it hit 33 odd in Jan contracts and then drifted a bit to 37 before pulling back sharply to 45-48 now. The view was to stop shorts and go small longs . Tgt levels are 49 and 55 in extreme short term.
Stocks to watchout for :
All the stocks discussed recently have inched up slowly and are continuing the uptrend slowly. The best way to trade such a trend is to book partial profits at resistance /target levels and keep trailing stops to ride the gains.
ONGC has resistance around 740. Reliance Inds around 1410 . HDFC around 1700. These are levels corresponding to index resistances.
Fresh calls to be triggered in the day as lot many stocks are nearing our target levels and are bein trailed.
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