Market Musings
Market again rocked as per expectations. Today again it will cross 3100 levels and will prove that the recovery is not a hoax call.
We produced few stunning calls like DCHL, VOLTAS, BEML which all were really volume less when we produced the calls. This is what we desire so that the early entry advantage should give fearless approach to traders.
ADAG group shares will rock in coming sessions especially RCAP with target of 535 and RPOWER with target of 154. RIL target 1800 is our driving force. It will guide market to test 12500. After all KING is KING.
There are number of F&O companies where the lot value has now exceeded over Rs 3 lac and in some cases even 4 lac. Will the exchange revise the lot size immediately so that retail can participate? In fact, just after the lot size was increased by NSE the rally had gathered momentum.
There were 13 stocks which hit 20% upper circuits today and around 40 stocks which hit 10% upper circuits which clearly shows that rally in mid cap and small cap has started. These stocks will not outperform as the rise will be much faster than A group shares due to lack of liquidity as well as ownership issues. The focus of operators too will change to mid cap and small cap where it can leverage their F&O gains and bring the valuations up. Also the funding has started afresh for FY0910 which will make players to take long calls in delivery trades.
The cash lying in the bank accounts of HNI too has started coming back into the market. Confidence is rebuilding and once again history is repeating. Operators and promoters will go hands in glow to rig up the prices and stories will be out in course of time. Some operators are active in CCL, VIP and RAYMOND. Once the retail who has recently entered in these stocks exit at same price or at a little rise, these stocks will start rolling. You have seen this in SEAMEC and now GODREJ. MCNALLY BHARAT, BHARATI SHIPYARD and KIRLOSKAR ELECTRIC are the fine examples.
Trading
BATA INDIA is trading at 114 and with heavy volume of about 0.5 million. Looking at its chart Its clear trend reversal indication and the breakout target of 140-145. The Increased buying interest can be seen in its On Balance Volume which is making new High with each new peak.
Tit Bits
In a major development in the city's sluggish real estate sector, Kotak Mahindra Bank Limited on Tuesday acquired the ownership rights of the 10-story Apple Tower at Bandra Kurla Complex for around Rs 470 crore.
The deal was made as part of consent terms signed before the Bombay high court between the bank and Apple Finance Limited, which owned the 1.5 acre piece of real estate. The building designed by Hafeez Contractor and constructed by Shapoorji Pallonji had come up in early 2000.
The consent terms signed and submitted before Justice R Y Ganoo ended the seven year long legal battle involving Apple Finance and its creditors. The detailed consent terms also included Kotak Prime limited, as one of the parties, since it along with Kotak Mahindra Bank had become the sole debenture holders of Apple Finance. The bank essentially agreed to pay off the creditors of Apple Finance and clear off all its debts too. Apple finance, which was represented by law firm Kanga & Co, therefore agreed to sell off its building to the Kotak Mahindra Bank limited.
Given the slump in the property market, observers say that Kotak Mahindra Bank may have walked away with a good deal. The possession of the building which is right now with the receiver will be handed over to Kotak Mahindra Bank later. According to real estate sources, the bank has the option of pulling down the building in order to take advantage of the additional floor space index (FSI) granted to BKC recently. The FSI here has been hiked from 2 to 4. The bank could end up shelling out another Rs 175-Rs 180 crore as premium if it chooses to take the benefit of this additional FSI. The existing building has a carpet area of 1.23 lakh sq ft.
In 2002, Canara Bank, the original debenture trustee of the company, had moved the high court to recover over Rs 200 crore which was payable to the debenture holders, mainly the five nationalised banks to whom the property was mortgaged.
The court had appointed a court receiver but efforts to sell the tower through public auctions had not succeeded. In fact, Jet Airways, had also bid Rs 206 crore for the property in December 2005, but it was turned down by the HC last March as being too low after Apple Finance claimed that the market price was Rs 600 crore.
Earlier in 2005, Jet had outbid its rivals for the property and also deposited Rs 51 crore as part of the undertaking to carry out the offer. Its price of Rs 206.10 crore, however, was much less that the reserve price of Rs 250 crore. After the auction, two other companies Financial Technologies India Limited and Parasvnath Developers Limited had approached the court with higher bids of Rs 225 and Rs 235 crore respectively. The court rejected all the bids.
In 1997-98, Apple Finance had issued debentures totally valued at Rs 74.90 crore as security for various loans taken by the banks. When Apple Finance failed to redeem the debentures, the debenture trustee Canara Bank moved high court for the sale of the property. In April 2004, the court appointed a receiver and subsequently the property was put for auction.
The property was put up for sale five times but did not fetch high rates. In April 2005 auction, the Lodha Group was the highest bidder at Rs 135 crore.
Apple's BKC realty story was exclusively done has seen the light of the day. We had pegged Rs 450 crore value for the BKC property and in fact, the same now was sold to Kotak for 470 crore.
We have also released our version of story in RAYMOND. No doubt, it has not seen takers so far but very soon you will be seeing this happening. We are cent percent sure that CCL BAORD will too announce buy back in coming days. The effort of the active operator in the stock to keep the stock price suppressed manipulatively may not sustain for a longer period of time. As such the sector is going bullish after TEA hit the sky. We suggest investors to due their own due diligence or wait patiently till the time these stories are taking shape in realty.
Sensex : (9901.99) Today Sensex face resistance at 10035, if cross 10035 then goes up to 10168 and 10301. Sensex find support at 9790, if break 9790 then fall up to 9657 and 9412.
Nifty : (3060.35) Today Nifty face resistance at 3099, if cross 3099 then goes up to 3137 and 3175. Nifty find support at 3030, if 3030 break then fall up to 2970 and 2925.
Nifty April Futures closed at 3061.50 ( Rs 1.15 Premium ) ( As on 1st April,2009 ) with a turnover of Rs 12353.67 Crores. Adds 379300 Shares (1.03%) in open interest pushing the open interest to 37114100 Shares.
HOT BEML..........
The Indian market opened lower end and sharp bounces from lower level and close in green zone. For coming session trading above 3066 it can test 3105-3127 zone on the lower side3003 -2986 will act support zone .Nifty is taking support from 2960 zone and broken the 3055 resistances zones.
Nifty took support at the 10 DMA and closed above the 5-DMA. Either break past the 3123 & head higher or consolidate for more time..20 day Avg has moved above the 50-DMA(Not shown in the chart-refer Pivot table)
Tomorrows Pivot comes at 3032 and so is the channel support. Nifty closing above 3056 gives a positive momentum, needs to be follow it up with firm trend tomorrow.
Hourly macd has given a buy signal just above the "0" mark. Now for a follow up moves..
Has the larger B correction ended..?? Ideally it should consolidate by trading 2965 to 3125 for more time..
5-Minute shows a break of the channel & getting back into the channel..Is it an advance break down. TA is strong in all time frames. Break of 3030 at the opening hour & higher levels subsequently should warrant unwinding..
This is a bullish short term count with in the bullish scenario., provided 3000 level holds.
This is a bearish short term count within the bullish scenario where in selling may emerge around 3095-3125 area and a fall to continue towards 3000 or lower to complete the consolidation....may stretch into next week.
I don’t know what is happening in the markets and there is no use double guessing where the markets are off too. I also do not know who is fooling whom. Let us see the small table I prepared below: -
| Date | FIIs (Cr) | DIIs (Cr) |
| 25 Mar | 348.65 | 8.92 |
| 26 Mar | 1290.74 | -461.87 |
| 27 Mar | 80.43 | 42.98 |
| 30 Mar | -452.32 | -49.38 |
| 31 Mar | -583.65 | 1039.07 |
| 01 Apr | 173.75 | 11.6 |
I really do not know what to make out of this data – it seems that they are as confused as we are. FIIs buy DIIs sell, DIIs buy FIIs sell. When both buy the figures show caution – the volumes are low. There was a theory that the run up that was there on 31st was due to the mutual funds trying to improve NAV of their funds – a fully plausible explanation. The only problem that I am having is that the technicals too are getting somewhat confused with no clear cut indications any more. The technical possibility of the markets going down remains but then the fact remains that we are not doing so. And the facts is only the markets and nothing else really – are we just trying to justify what the market is doing rather than purely trying to read the technicals? Well there has to be the element of “human factor” that cannot ignore what is happening around. I try to read the markets and then try to correlate – when I cannot I get confused. Bloody old computer I have there perhaps. The fact remains that the variables are just too many. Okay – let me do it once yet again.
The global cues… Asia was mixed with a positive bias. Nikkei was up 2.99%, Hang Seng down 0.42% and Strait Times up in green 0.13%. The Europe has done what most of the markets have been doing – spend the majority of the time in red and then close to the closing – jump into green with vengeance. FTSE closed up 0.75% and DAX was up 1.13% and CAC up 1.15%. US started the day in red but by the mid session now it is well into green – Dow is up 1.49%, Nasdaq is up 1.03% and S&P up 1.24% and I am not taking sides or giving ideas as to where it might end. Yahoo says that the bank data is lifting the wall street. It says that the home sales data and the factory data says that the slump could be moderating.
The candle yesterday was trying to break the influence of the black candle yesterday but could not pierce the range in a worth while manner. If however we take both the candles as one (can do so as the bodies are not really over lapping) then it just about pierce the black candle. This may give strength to the markets. All the same we still remain trapped in the range – which we have been seeing for some time now. The volume has been 127% of the last 50 day average. We are no longer trailing the upper edge of the Bollinger band. 5EMA still remains over the 100 EMA and so does 20 EMA trail above the 50 EMA. ADX is not showing strength still. The MACD bullish divergence remains somewhat the same as before. The slow stochastic are now reaching the 50 marker with the red line below the blue line and that remains bearish. RSI is looking up and bullish and once again entering the overbought zone. It will be interesting how long we remain overbought.
Let us have a look at the options data – it has turned interesting and you can download the chart and compare with the charts I have posted in past. 
I will call it off today without the Pivot data. This week is only one more trading day that is tomorrow – see what happens and who carries on the position over the long weekend. Best of luck…
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