Trading with PT style

[praveen taneja]

MARKET ENDED 29.01.2010

SENSEX 16357.96 +51.09

NIFTY 4882.05 +14.80

Indian markets pulled back to end in the positive terrain on Friday led by short covering in banks and realty space. Upward projection of GDP by the Reserve Bank of India in its third quarter monetary policy review and positive European markets also boosted sentiments.
Indices opened lower in line with other global markets and moved down further ahead of RBI’s policy review. The market corrected in a knee-jerk reaction to RBI’s move to hike the Cash Reserve Ratio by more than street estimates but later pared losses and pulled back smartly.
The RBI hiked CRR by 75 basis points against street consensus of 50 bps. It left the repo rate and reverse repo rates unchanged. The CRR hike, which will suck out Rs 36,000 crore from the system, will be done in two phases. The first CRR hike of 50 bps will be from February 13 and second of 25 bps from February 27.
RBI also projected GDP growth for financial year 2009-10 at 7.5 per cent from 6 per cent last year. It also said the inflation would be around 8.5 per cent in March.
We think unchanged policy rates are a ‘timing’ issue as the RBI has simultaneously raised its FY10 GDP estimate to 7.5% (from 6%), its March-2010 inflation estimate to 8.5% (from 6.5%), as well as stating that inflation expectations are on the rise. We maintain our view that the RBI will hike by at least 125bps this year with a high probability of an ‘inter-policy’ move post the budget.
Bombay Stock Exchange’s Sensex closed at 16357.96, up 51.09 points or 0.31 per cent. The index touched an intraday low of 15982.08 and high of 16390.31.
National Stock Exchange’s Nifty ended at 4882.05, up 14.80points or 0.30 per cent. The 50-share index hit a low of 4766 and high of 4893.70 in today’s trade.
BSE Midcap Index was up 1.01 per cent and BSE Smallcap Index moved 1.20 per cent higher.
Banks and realty stocks gained momentum following the Reserve Bank of India’s move to hike credit reserve ratio by 75 basis points. The central bank has left the key interest rates unchanged.
Amongst the sectoral indices, BSE Bankex was up 2.99 per cent, BSE Realty Index was up 2.60 per cent and BSE Capital Goods Index moved 1.26 per cent higher.
ICICI Bank (5.29%), BHEL (3.10%), SBI (2.72%), DLF (2.54%) and HDFC Bank (2.25%) were the top Sensex gainers.
Hindustan Unilever (-4.44%), Wipro (-3.80%), Tata Motors (-2.92%), Tata Steel (-2.83%) and Bharti Airtel (-2.40%) led the Sensex decline.
Market breadth turned positive on the BSE with 1471 gainers against 1354 losers.

 

[hiteshsjoshi]

We think unchanged policy rates are a timing issue as the RBI has simultaneously raised its FY10 GDP estimate to 7.5% (from 6%), its March-2010 inflation estimate to 8.5% (from 6.5%), as well as stating that inflation expectations are on the rise. We maintain our view that the RBI will hike by at least 125bps this year with a high probability of an inter-policy move post the budget.

What is an 'inter-policy' move???

 

[praveen taneja]

What is an 'inter-policy' move???

Bro its like adjustment and between the period of policy makingtime:thumb:
like what we can do if RBI anounce on march after inflation cross 10% and before anyone can think mkt start doing dhoom dhad dhdaam
there is nothing to worry if u trade with sl and invest wisely
smart investors are those who book profit whenever they think they achieve tgt and re enter at lower level:thumb:

 

[praveen taneja]

News Round up


Economy
•The Reserve Bank of India, in its Monetary Policy review has hiked the Cash
Reserve Ratio (CRR) by 75 basis points (bps) to 5.75 per cent, while holding
the repo and reverse repo rates steady in line with market expectations.
The CRR hike will be done in two tranches. The first one will be for 50 bps
with effect from February 13, 2010, and the balance 25 bps will be
effective from February 27, 2010. Eventually, this will drain out Rs 36,000
crore from the system.
•India's food price index rose 17.40 percent in the 12 months to Jan. 16,
rising for the first time after falling for three consecutive weeks, while the
fuel index was up 5.70 percent.
Capital Goods
•Bharat Heavy Electricals Ltd (BHEL), the country's largest power equipment
manufacturer, signed a joint venture (JV) deal with Madhya Pradesh Power
Generation Company Ltd (MPPGCL) for setting up a 1,600-MW supercritical
thermal power plant in Khandwa district.
Refineries
•State-run Hindustan Petroleum Corp plans to invest Rs 25,000 crore to set
up a refinery with an annual capacity of 15 million tonnes a year on the west
coast. The new refinery may be located anywhere between Mumbai and
Goa on the western coast and is being mulled to make up for the space
constraint the Mumbai refinery faces.
Information technologies
•HCL Technologies Ltd. (HCL) announced that Meggitt, an international
group specializing in aerospace equipment, high performance sensors,
defense training and combat systems, has selected HCL Technologies'
Engineering and R&D Services (HCL ERS) division to provide engineering
services for its global operations.
Metals
•Tata Steel, India's largest steel producer, will spend Rs 5,700 crore on
expansion projects in the next financial year. Around 70 per cent of the
money (Rs 3,700 crore) will be earmarked for domestic expansion. Tata
Steel plans to expand capacity to 10 million tonnes at Jamshedpur by
August 2011 from 6.8 million tonnes.
Power
•NTPC plans to spend over Rs 29,000 crore in the next fiscal to augment its
power generation capacity. The company's 2010-11 target includes
spillover target from the current fiscal. For 2009-10, the target was set at
3,300 Mw but since the 1,320 Mw unit at Sipat is expected to be
commissioned only by August, it will be part of the 2010-11 target.
Construction
Punj Lloyd has bagged an EPC contract of over Rs 1,100 crore from GMR
Hyderabad Vijaywada Expressways Private Limited for 116.5 km of National
Highway No-9. NHAI (National Highway Authority of India) had earlier
awarded the project on a BOT (Build, Operate, transfer) basis to GMR
Hyderabad Vijaywada Expressways Private Limited
Oil & Gas
•Oil and Natural Gas Corporation (ONGC) and Hinduja Group are at
loggerheads over a stake in an Iranian gas field, with the London-based
group seeking half of the 40 per cent interest assigned to India but the
state-owned company willing to concede only one-fourth.
Pharmaceutical
•Lupin Ltd, one of the fastest-growing generic drug companies globally, is
planning to set up three new manufacturing facilities at an investment of Rs
200 crore.
•Biocon Limited, the country's second largest biotechnology firm has signed
a Memorandum of Understanding (MoU) with Malaysia's Biotechnology
Corporation (BiotechCorp) to explore collaboration and potential
investment in Malaysia's biotechnology industry.
Healthcare
•Apollo Hospitals has signed a memorandum of understanding (MoU) with
the Maldives government to mange the Indira Gandhi Memorial Hospital
(IGMH) at Maldives. The hospital would be renovated with an investment of
around $25 million (Rs 115 crore).

 

[praveen taneja]

Forthcoming Events

Ex Date Symbol Purpose
01/02/2010 CONCOR INT DIV-RS.6/- PER SHARE
01/02/2010 GODREJCP 3RD INT DIV-RE.1/- PR SHRPURPOSE REVISED
01/02/2010 SAIL INT DIV-RS.1.60 PER SHAREPURPOSE REVISED
02/02/2010 DHAMPURSUG AGM/DIV-RS.1.50 PER SHAREBC DATES REVISED
03/02/2010 BEL INTERIM DIVIDEND
03/02/2010 PFC INTERIM DIVIDEND
04/02/2010 CROMPGREAV 2ND INT DIV-RS.1.40 PR SHPURPOSE REVISED
04/02/2010 DCHL 3RD INTERIM DIVIDEND
04/02/2010 EDUCOMP INTERIM DIVIDEND
04/02/2010 PNB INT DIV-RS.10/- PER SHARE
04/02/2010 POLARIS INT DIV-RS.1.75 PER SHARE
05/02/2010 SBIN INT DIV-RS.10/- PER SHARE
09/02/2010 BHEL INT DIV-RS.11/- PER SHARE
09/02/2010 HAVELLS INT DIV-RS.1.25 PER SHARE

 

[praveen taneja]

Nifty view next week

Nifty remained volatile and held on to its lower support, managed to close above 4800. The participation increased during the week which was
reflected in higher volumes. Overall market cost-of-carry ended positive. Market witnessed an addition of open interest over the week on the back
of positive cost of carry. There was a significant decline in premium during the week, however, Nifty managed to close at a premium of 5 points
indicating short covering. Global cues will continue to play an influential role. The put-call ratio of open interest rose during the week, finally
closed at 1.12 levels, which once again is within the comfort zone. The options' open interest addition remained balanced during the week. The
options concentration continued to remain in the 4800-strike put, with the highest open interest of 48 lakhs, followed by the 5000 and 5200 strike
calls with more than 35 lakh and 29 lakh shares, respectively. The options accumulation clearly indicates support around the 4800 level, and
resistance close to 5000 levels followed by 5200 levels. The weekend session saw the highest addition in the 5000-strike call option, on the short
side, indicating capped upside this week. The implied volatility (IV) of call options decreased further to 23.79% while the average IV of put options
ended marginally higher at 23.15% on Friday. The options activity indicates a move between 4800 and 5000 levels this week. The move may remain
mixed, with selling pressure close to 5000 levels.

 

[praveen taneja]

Nifty analysis

Put Call Ratio Analysis : The Put-Call open interest ratio of Nifty has increased
to 1.12 from 0.94. At the end of week, the maximum stocks had negative trend of
change in put call open interest ratio.
Implied Volatility Analysis : The Implied Volatility (IV) for Nifty futures this
week has decreased to 23.56% from 24.79%. The IV of the stock futures has
changed this week ranging from -10.60% to 38.31%.
Open Interest Analysis : The open interest for the index at the end of this week
has increased by 0.94% as compared to the previous week. All future stocks saw
changes in their open interest ranging from -30.34% to 74.35%. HINDUNILVR has
the maximum increase in open interest as compared to other stocks.

 

[praveen taneja]

Mkt look positive till budget

Fears of monetary tightening at home and tougher rules for US banks to invest in equities cast a shadow over the market last week. Worries of monetary tightening, however, receded for the time being on Friday, 29 January 2010 when the Reserve Bank of India left interest rates unchanged while raising cash reserve ratio by 75 basis points.

Meanwhile, US President Barack Obama stunned markets last week by unveiling new rules for US banks that would potentially restrict their size and prohibit them from certain business activities. US market recoiled on the concern that banks could begin to restrict lending activities just as the global economy is recovering from a deep recession.

BSE Sensex fell 501.72 points or 2.98% to 16,357.96 in the week ended Friday, 29 January 2010. S&P CNX Nifty tumbled 153.95 points or 3.05% to 4882.05.

BSE Mid-Cap index fell 273.86 points or 4.04% to 6,509.80 in the week. BSE Small-Cap index dipped 428.49 points or 4.95% to 8,232.68. Both these indices underperformed the Sensex.

Last week there were IPO of Syncom Healthcare, Thangamayi Jewellery, Vascon Engineers & Aqua Logistics. In the coming week, we have few more D B Realty, Emmbi Polyarns, NTPC and Aqua Logistics(revised).

Indian Stock market is highly oversold and a bounce back is very much anticipated. Nifty is expected to trade in the range of 4800 to 5000 in the coming week and can see a maximum upside of 5300 in this series. One could do cherry picking for the month of Feb. We could see positive outlook from here to Union budget

 

[praveen taneja]

Pivotals: Reliance Industries (Rs 1,046.5)



Reliance Industries declined to the low of Rs 1,018 last week. But the 200-day simple moving average present at Rs 1,020 cushioned the fall and the stock has been hovering just above this level over the last three sessions. A rebound early next week can take the stock higher to Rs 1,070 or Rs 1,085. Reversal from either of these levels will imply that the stock will move lower to Rs 990 in the near-term.
The stock remains in the medium-term range between Rs 1,200 and Rs 850. Since it is reversing lower from the upper end of this range, it can move down to Rs 900 or Rs 850 over this period.

 

[praveen taneja]

Wall of worries seem to be mounting as the Indian markets extended losses for second consecutive week. Benchmark indices witnessed a deeper cut led by heavy offloading in interest rate sensitive stocks. Fear over China's bid to cool down its economy coupled with US President Barack Obama's decision to put restrictions on banks further hit traders and investors mood. Also, expectations that RBI may tighten CRR for banks (which indeed came on Friday, CRR was hiked by 75bps and reverse repo was untouched) dampened the mood on Dalal Street. Finally, the BSE Sensex lost 3.1% and NSE Nifty lost 3%.Sensex intra-week high of 16,878 and low of 15,982Nifty intra-week high of 5,035 and low of 4,766

The top losers in the Sensex were Tata Motors (down 10.8%), Tata Steel (down 8.9%), Hindalco Inds (down 8.7%), Wipro (down 7.4%) and Hindustan Unilever (down 6.1%).

The top gainers:The top gainers in the Sensex were BHEL (up 1.1%) and ITC (up 0.4%). The BSE IT Index (down 4%): The top loser in the IT sector was HCL Tech. The stock declined by 9.4% during the week Wipro (down 7.4%), Mahindra Satyam (down 7.3%), Patni Computer (down 5%) and Oracle Financial (down 4.5%) were among the other major losers.

The BSE Consumer Index: The top losers in the Consumer Durables space were Whirlpool (down 11.5%), Su-Raj Diamonds (down 6.7%), Samtel Color (down 4.2%), Videocon Industries (down 3.5%) and Blue Star (down 2.5%).

The BSE Healthcare Index (down 1.5%): The top losers in the Pharma sector were Dishman Pharma (down 14.1%), Zandu Pharma (down 11.7%), Emami (down 9.2%), Natco Pharma (down 8%) and Glenmark Pharma (down 7.9%).The top gainers were Cadila Healthcare (up 10.5%), Torrent Pharma (up 9.4%), Sun Pharma (up 2.9%), Astrazeneca Pharma (up 1.6%) and Piramal Healthcare (up 1.2%).

The BSE Banking Index (down 2%): The top losers in the banking space were IOB (down 13.7%), BOI (down 6.9%), Federal Bank (down 5.6%), Yes Bank (down 3.9%) and Kotak Mahindra Bank (down 3.8%).The top gainers were OBC (up 8.1%), BOB (up 5.2%), Allahabad Bank (up 4.8%) and Canara Bank (up 0.1%).SBI slipped 1.5% during the week.

The BSE Auto Index (down 6%):The top losers in the auto space were Tata Motors (down 10.8%), Swaraj Mazda (down 7.9%), Hindustan Motors (down 6.4%) and Eicher Motors (down 6.4%), Maruti fell 4% during the week.M&M lost 10% during the week.

The BSE Oil & Gas Index (down 1.3%): The top losers in the oil & gas space were Hindustan Oil (down 9%), Gujarat NRE Coke (down 8.2%), Great Offshore (down 6.6%), BPCL (down 5.4%), HPCL (down 5.1%), ONGC (down 1.6%) and Reliance Industries (down 0.7%).Shiv-Vani Oil rose 1.4% during the week.

The BSE Capital Goods Index (down 1.5%): The top losers in the Capital Goods space were Aban Offshore (down 9.2%), Praj Industries (down 9.1%), BEML (down 8.7%), Astra Microwave (down 8.3%) and LMW (down 8%).The top gainers were Crompton Greaves (up 5.3%) and ABB (up 0.4%). BHEL advanced 1.1% during the week. The company would be signing a joint venture Agreement with Madhya Pradesh Power Generating Company for a formation of a joint venture Company to set up 2x800MW supercritical Thermal Power Plant in Khandwa, Madhya Pradesh.Siemens added 2.2% during the week. The company posted a net profit after tax of Rs2.36bn for the quarter ended December 31, 2009 as compared to Rs3.30bn for the quarter ended December 31, 2008. Total Income has increased from Rs18.63bn for the quarter ended December 31, 2008 to Rs18.66bn for the quarter ended December 31, 2009.

The Cement Sector: The top losers in the cement sector were Kakatiya Cement (down 13.1%), JK Cements (down 12.3%), Dalmia Cement (down 11.4%), Binani Indus (down 10.7%) and Madras Cements (down 10.4%). Ultratech Cement advanced 2% during the week.

The Telecom Sector: The top losers in the telecom were TTML (down 9.2%), MTNL (down 8.3%), Shyam Telecom (down 8.3%), RCom (down 6.5%) and WWIL (down 6%).The top gainers were Himachal Futuristic (up 13.6%).Bharti Airtel dropped 5% during the week

The Realty Sector (down 6.7%): The top losers in the Realty sector were Ansal Properties (down 6.6%), Unitech (down 6.4%), Omaxe (down 6.4%), HDIL (down 6.4%) and Anant Raj Indus (down 6.3%). DLF declined 5.4% during the week

The Metals sector (down 8%): The top loser in the metals sector was Tata Steel. The stock fell 9% during the week. SAIL declined 5% during the weekAmong the other major losers were Bhushan Steel (down 7.5%), Jindal Steel (down 6.9%), Adhunik Metaliks (down 5.9%) and Sunflag Iron (down 5%).