Welcome to volatile week

With derivative expiry and RBI credit policy are around the corner, Indian share markets will trade in extreme volatility in the coming sessions. Indian stocks are in “unclear” zone with Mutual funds and big domestic investors are waiting for correction, NRIs and FIIs are pumping money. My advice- does not take long positions and book profits immediately in high growth stocks. Correction is eminent but when will it happen?

Global markets: US markets suffered heavy losses on Friday due to poor results by Google. Emerging markets suffered heavy losses along with Japan market. China is the only exception.

Stocks of the day:

1. Hindustan Lever: Future rise will depend on offer price. Dividend and Buyback offer make this stock of the week. My Target is Rs 250-280. HUL board will officially announce offer price on July 29 board meeting.

2. Dr Reddys – Results.

Rumours of the day:

1. NTPC will announce Bonus shares and good preferential allotment to existing investors in its FPO.

2. Chevron may buy stake in Petronet LNG.

Significant events:

1. Derivative expiry on July 27. Expect volatile trading in between.

2. Watch out for RBI’s credit policy on July 31st. What will happen to Interest rates? May be no change.

Significant News:

1. Current interest rates are at reasonable value – Finance Minister.

2. We are waiting for softening of interest rates – ICICI Bank.

3. Crude will cross $ 75 and may touch $ 90– Analysts.

Positive Stock news:

1. Nitin fire net profit rose by 109%.
2. Lead prices are rising. Watch out for Hindustan Zinc.
3. Karur Vysya bank net profit rose by 25% while Indian bank posted 29% rise in net profit. Bank stocks already factored these good results.
4. Mahindra and Mahindra will acquire Lokesh machines.
5. FICCI recommended 10 year tax holiday to health care infrastructure builders and soft loans.
6. UB Holdings is planning to sell stake in Deccan Aviation.

Negative Stock News:

1. ADRs of Indian IT stocks suffered heavy losses along with MTNL.
2. McKinsey sued Reliance and Reliance Communications over dues.
3. Increase in gross NPAs of ICICI Bank is worrying news.
4. UTI Bank priced its GDT at 1.7% discount.
5. NDTV and Arvind Mills are in F&O ban.
6. 50% of the penny and loss making companies are trading near all time highs. Stay away from such stocks.

Stock advice:

1. Ispat industries will announce results on July 24. Will it surprise CNBC analysts?
2. Zee News fundamentals does not justify the steep rise.
3. Voltas is looking very good and Meghamani Organics is a safe one for long term investors.
4. Raymond is a contrarian bet for long term investors.
5. Tayo Rolls is a safe bet for long term investors. Corus supply will propel this stock.
6. Dr Reddys is ready for sound results despite rupee appreciation.
7. Don’t take fresh long positions in Real estate stocks. You will get better price later.
8. Adlabs may move upwards at any time. Good results will be a trigger.
9. Business Standard published very good article on Gujarat NRE Coke. Must read.
10. If RBI will not change interest rates, Bank and real estate stocks will rule the markets along with Maruti. Crude oil price is a real concern.

IPO views:

1. Central Bank of India will list around Rs 130-140. 25-40% gains on the listing day itself. Invest in this IPO.
2. Omaxe may list with 40% gains. Good return if you will get allotment.
3. I don’t have positive opinion on IVR Prime. Stay away from this IPO.

Hot stocks for day traders and investors:

1. Hindustan Zinc – Rise in lead prices.
2. Hindustan Lever – Buyback offer.
3. Nitin Fire – wonderful results.
4. Voltas – Positive momentum on the back of good results.
5. Sell UTI Bank – GDR low pricing.
6. Dr Reddys – will post wonderful results.
7. ICICI Bank – good results.
8. Deccan Aviation – Stake sale and open offer.
9. Prajay Engineers syndicate – Medium term stock.
10. EID Parry – Technically strong.
11. Sun TV – Bonus, Dividend and Stock split.

Please share your views on Indian Stock markets and my stock recommendations.