Sound stocks rebound with volatility

Sound stocks like ABB, Reliance Energy will rebound and volatility will continue due to expiry of derivatives. Short term risk taking investors can take positions in HPCL and BPCL as oil ministry is mulling price hike.

CRUCIAL POINT: If Inflation remains stable, there will be no change in interest rates in RBI credit policy on July 31. This is a trigger for Banking, Finance, Auto and Real estate sector. Take positions in these sectors if Inflation is below 4.3%.

Global Markets: All the global markets are volatile with positive moment.

Stock of the day: ABB – It will announce good results.

Significant views:

1. Total un-liquidated turnover in derivatives is around Rs 1, 00,000 crore. My view is we may experience another May, 2006 crash. When I see atmosphere in Ongole town, many retail investors are buying stocks without any basic knowledge about the companies, valuations and other fundamentals. This is surely a worrying sign.

2. Laxmi Mittal supported Mukhesh Ambani on gas pricing.

Rumour of the day:

1. IFCI may announce stake sale/new business model on August 4. Don’t sell your shares for another 2-3 months. Long term investors should not leave this goldmine.

2. Government will hike diesel and petrol prices soon.

Positive News:

1. SAIL announced will jointly explore opportunities and R&D activities.
2. Infosys and Philips signed $ 250 million BPO deal.
3. KEC International announced 74% jump in net profit.
4. Yes Bank net profit jumped by 113%.
5. 62% rise Wockhardt consolidated net profit.
6. Ispat industries recorded net loss of Rs 9.53 crore in 2006-07 Vs loss of 812 crore in 2005-06.
7. Ashahi India net profit in Q1 increased by 316%.
8. Godavari fertilisers announced merger with Coromandel fertilisers.
9. IndusInd bank posted 62% increase in net profit.
10. IDFC signed MOU with IIFC to finance infrastructure projects. Its net profit rose by 38%.
11. HDFC announced 25% rise in net profit.
12. Castrol India net profit rose by 32%.

Negative News:

1. Sterlite Industries posted unimpressive results. Some more selling today.
2. Aptech Q2 net profit fell by 13%.
3. Suzlon net profit fell by 116%.

Stock advice:

1. No analyst talked positively about ITC in the recent days. Everyone is recommending ITC now and giving targets. It happens only in Stock markets. Never follow hot stocks and hot ideas. Invest in sound stocks with strong fundamentals and good growth prospects before everyone will talk about it.

2. Sugar companies are announcing disappointing results. Accumulate on dips and sell them on the day of Govt. Sops announcement.

3. Closely watch Essar Oil. Another turnaround story is in the making.

4. It is waste to subscribe to Zylog now. Allotment will be very low in the retail category.

Hot stocks for Day Traders:

1. IFCI: August 4 meeting on stake sale.
2. IDFC: Big Investment plans.
3. SAIL: Mittal association.
4. Ashahi Glass India: Good results.
5. ABB: Results today.
6. Reliance Communications and DLF - With risk

Please share your ideas.