P-Notes problem: BSE Sensex will touch 18,000 today

SEBI has finally taken necessary steps to halt current mad Bull Run in Indian share markets by proposing new rules to curb short term foreign inflows. SEBI proposals to curb indirect foreign investments by proposing new rules on P-Notes will create havoc in the stock markets. There will be a panic selling by FIIs (mainly hedge funds) which makes Sensex fall by 800-1000 points. P-notes are offshore derivative instruments issued by top brokerage houses for foreign investors. P-Notes protect identity of FIIs with easy entry/exit options and are generally short term investments which are responsible for recent Bull Run. Stocks like ICICI Bank, Reliance, Reliance Energy, L&T, RIIL, DLF etc will lose 4 -5% and this phase will continue for another 2-3 days. Hedge funds will withdraw their money by anticipating further curbs on foreign inflows. SEBI has done it; Let us wait for RBI steps.

Targets for Indian Stock Exchanges:

BSE Sensex:

CMP: 19,051.
Target: 18,000-18,200.
Short term target: 16,500-17,000.

NSE Nifty:

CMP: 5,668.
Target: 5,450-5,500.
Short term target: 5,000-5,200.

Why participatory notes (P-Notes) are dangerous for stock markets?

Direct FII investment is generally a long term investment like mutual funds and LIC etc. But investments by P-Notes (participatory notes) are generally a short term investment with easy entry and exit options. P-notes are offshore derivative instruments used by FIIs for investing in stock markets. 50% of foreign investments in Indian stocks are through P-Notes. Investment by P-Notes is not a serious investment and SEBI has taken correct step in the right direction to halt this unreasonable bull rally. Investors in Nifty derivatives will suffer unbelievable losses if don’t exit immediately. Manipulators will move away from Indian stock markets atleast in short term.

What investors need to do?

Investors should wait until clear picture emerges on this issue. Next week may provide ideal opportunity for fresh investments if political conditions are stable. BSE Sensex may touch 16,500-17,000 in this week. SEBI proposals on short term FII investments will once again link stock markets to economic performance.

Crucial note:

From now onwards, top brokerage houses may not even report P-Notes investments which may halt free fall in stock markets. It is better for normal investors not to make any fresh investments who don’t have enough knowledge on these issues.

Click here to read more about SEBI proposals on P-Notes.

BSE Sensex will cross 19000

Indian share markets will make new highs in this week due to unexpected positive news from all quarters. Political turmoil will take a short break and give stock markets much needed positive trigger. IIP numbers are improved after a decline in the last 4 months. But stock markets are already in the grip of speculators. It is not time for serious investors to venture into stocks due to unreasonable valuations of almost all good stocks. Short term speculators can make decent money in these euphoric times.

Market Direction:

BSE Sensex will move to 19,200-19,500 in this week and may see profit booking at this range. Always expect the unexpected things in politics and stock markets. So, watch out for unexpected shocks.

Why Indian stocks will make new highs?

1. Political stability: Intelligence reports predicted shocks for UPA parties if mid term polls will be held in the next 6 months. So, congress backtracked from elections and nuclear agreement. But I still have some doubts on congress party strategy.

2. IIP Numbers: It is the real trigger for share markets. After reporting poor numbers since April, IIP numbers once again showed positive momentum in the economy.

Why investors should be cautious?

1. Profit booking above 19,000: 19,200-19,500 is the major resistance point. Be cautious in that range.

2. Political Games: Never believe in political parties. Next co-ordination meeting between UPA allies is crucial.

3. IT Results: Technology stocks will not make any fresh gains until next quarter.

4. Subdued “Credit crisis” will resurface at any point of time in united States.

Final verdict: My opinion is volatility will continue in October. BSE Sensex will see 19,000 and 17,000 in this month. Real investors should wait for 17,000 while speculators can play games according to the investor’s moods. Lay investors will definitely burn their fingers by investing in Reliance stocks at these high valuations. Some things will never change in share markets. 2007 will once again bring back the horrible memories of Harshad Mehta days and technology bubble.

Is there any method in this madness?

Indian stock markets along with global markets are witnessing most volatile intra-day sessions in the recent days. Investors are repeating same mistakes by investing in weak stocks when fundamentals and valuations are big worrying points. Investors ignored the negative implications of credit policy on Indian companies in the yesterday session. Volatility will continue in the coming sessions.

Global Cues:

1. US markets lost 146 points after trading in the positive zone in the early session. Crude is in the $ 77-78 zone. Asian stocks are following their global peers.

Market Movements: All the global markets are in negative zone.

1. BSE Sensex:
CMP: 15,550.
Target: 15,330.

2. NSE Nifty:
CMP: 4528.
Target: 4465.

Stock of the Day:

1. Everonn Systems – It will list around Rs 450-500 and may cross Rs 550. Long term prospects are good for this stock but may be volatile in short term.

Significant views on Economy and Stock Markets:

1. RBI Credit policy will be misfired. Instead of decreasing liquidity, it may increase liquidity and also impact balance sheets of companies. Investors will realise the negative impact of credit policy within a short term. Volatility will continue in markets.

2. It will be difficult to keep Rupee above 40 against dollar. Rupee appreciation will continue in the long term. If RBI tries to keep rupee above 40, there will be negative implications due to rise in inflation. No government wants this situation just before elections. IT Midcaps and Textile stocks will be affected.

3. Hindustan Sanitary ware is a contra pick for long term investors while Meghamani Organics is a safe best for long term investors.

4. One investor asked me about Jain Studios. Don’t concentrate on such penny stocks without fundamentals and growth prospects. One should buy stocks with either strong fundamentals or better growth prospects. There will be no buyers for such stocks if markets go into bearish zone.
5. Sectors like food processing, Electronic hardware, Hotel and leather companies will get more sops in the coming budget – Finance Minister.

6. Q1 Results – Decrease in sales growth but increase in profits growth compared to recent quarters. Decrease in growth is a worry.

7. There will be no hope for Sugar, Textiles and Midcap-IT companies in the medium term except Government sops.

Positive Stock News:

1. Imerys may acquire ACE Refractories.
2. Satyam got big orders from FIFA. Satyam is getting more orders from Europe in the recent days.

Negative Stock news:

1. RBI hiked CRR by 0.5%.

Best stocks for Day Traders:

1. Satyam Computers.
CMP: 480.
Target: 485

2. Everonn Systems.
Target: 550.

3. Sell BHEL and L&T.

4. Sell DLF.
5. Sell Tata Steel and Hindalco.

Things I can’t understand:

1. How can the good showing by companies like L&T and Reliance will change the fortunes of bad companies? Why investors are buying these companies?

2. Why BHEL is rising despite poor results?

3. Why banking stocks rose despite credit policy effect?

4. Is there any change in fundamentals between 550 points crash and 290 points rise?

5. Is there any change in US subprime market worries?

6. Are investors watching the poor results by Indian companies in the recent quarters in the most sectors?

7. Can Investors understand the crude price rise on Inflation?

8. Why RBI announced worst credit policy ignoring major problems? Is it a stop gap policy?

9. Why RBI doesn’t allow rupee appreciation despite benefits to common man like fall in inflation and benefits to balance sheets of most companies except exporters?

10. Why investors can’t wait for the settle down of this volatility?

Is there any method in this madness? Please share your views.

Export stocks will rule in the coming sessions

Export stocks finally got life line from the Indian Government. Government announced sops to the extent of Rs 1,400 crore to the sectors which were severely hit by rising rupee except IT. Underperformers like Textiles and other export stocks will rule the Indian share markets in the coming sessions. Short term investors should enter into these stocks to make huge profits in the short term.

Market sentiment: BSE Sensex will gain around 150 points due to inclusive rally from under performers. Profit booking will be seen in recent performers like GMR Infra.

Global cues: US markets made record gains with Dow Jones is making record gains in one day after 2002. Indian markets will follow their global peers to make new record highs.

Sector of the day: Export stocks especially Textile stocks.

Stock of the day: Textile stocks, KRBL, Hanung Toys, DLF, DCM Shriram and Raymond.

Rumour of the day:

1. Rupee may touch Rs 36 by the end of 2007. Stay away from IT stocks.

Pharma stocks that will be benefitted from Rupee rise:

1. Ipca Labs, Lupin, Ajanta Pharma, Nicholas Piramal and Elder Pharma.

News of the day:

1. Rs 1,400 crore sops package was unveiled for exporters to save them from rupee problems.
2. Commerce ministry reduced the exports target for 2007-08 to $ 125 billion from $ 160 billion.

Significant news:

1. Manufacturing sector suffered decline in growth to 11.9 from 13.3% of the last year.

2. Sectors that will be benefitted: Textiles (including handloom), readymade garments, leather products, handicrafts, engineering products, processed agricultural products, marine products, sports goods and toys.

Positive stock news:

1. DLF Ltd bagged DCM Shriram land in West Delhi for Rs 1,750 crore – Record deal in India.
2. Great Offshore bagged Rs 1,000 crore order from ONGC.
3. TVS Motors will roll out bikes from its Indonesia plant within 30 days.
4. Geojit financial services recorded 71% rise in net profit.
5. Mukesh Ambani’s SEZ got clearance from government.
6. UTI bank profit rose by 45% to Rs 175 crore.
7. Govt. Gave clean chit to Jet Airways chairman Naresh Goyal. Fly in Jet flights to US.
8. Essar bid is short listed for Stelco.

Negative stock news:

1. Bajaj Auto net profit was down by 18%.
2. IL & FS COO Girish Nadkarni resigned and will join Avendus.

Best stock picks for day traders and Investors:

1. Raymonds.
2. DLF.
3. DCM Shriram.
4. SRF.
5. Vardhman Textiles.
6. Himatsingka.
7. Century Enka and Century Textiles.
8. Bombay Dyeing.
9. Alok Industries.
10. Arvind Mills.
11. Welspun India.
12. RSWM.
13. KRBL.
14. Hanung Toys.

Please share your opinion on my stock analysis and share your views on Indian stock markets.

Markets are in negative zone

Indian stock markets are in the crucial period with slow down in US economy, rising crude price and appreciation of rupee against dollar will make markets continue to spiral downwards. Market operators may try to give positive edge but that is not sustainable. Stay away from markets until these wild moments stopped.

Market moments: Bearish.
NSE Nifty may trade in the range of 4095- 4120 while BSE Sensex may trade in the range 13,920-14,050.

Significant news:
1. ICICI Bank FPO opens today.

Stock Investment advice:
1. Stay away from IT, BPO and Textile stocks as rupee will continue to appreciate.
2. Stay away from Banking and Automotive stocks as rate hike is necessary.
3. Don’t believe in the ambitious statements by Textile minister. Even though volumes may rise, margins will suffer.

Positive Stock News:

1. Wipro will acquire IT arm of a major German company.
2. Reliance Communications will form JV with Accenture to maintain IT Infrastructure and services.
3. BHEL bagged Rs 139 crore order from NTPC.
4. Shareholders of Indoco remedies agreed merger proposal.
5. TRF and HCL got big orders.

Negative stock news:

1. Spicejet denied stake sale. But I believe in the rumours. Consolidation is healthy for Aviation industry.
2. Punjab National Bank dropped equity offer plan.
3. Oil price is at 9 year high. No hike in petrol and Diesel prices in India. Stay away from oil refining companies.
4. ABG Shipyard failed to announce inspiring results.

Results today:
SREI Infrastructure, Cambridge Solutions and Indian hotels.
I am advising investors to stay away from these extremely volatile markets for some more time. I will recommend any stocks.

Indian stocks will open on positive note

Indian stock markets will open on positive note on Monday due to rise in global markets. But Overall sentiment is bad but this range bound volatility will continue for some more time. Rupee will continue its march between 40.4-41.2 against dollar. If CBDT circular will spoil the whole sentiment, Nifty will touch 3600-3700 by Friday.

Major concern: Liquidity. Will markets face liquidity crunch after ICICI Bank issue?

Market sentiment: BSE Sensex may move between 14,100-14,300. Nifty will oscillate in the range 4,190-4,230.

Dangerous news:

1. Will US federal bank rise interest rates on June 28?
2. Crude is at 9 month high.
3. Rupee appreciation against dollar.
4. CBDT issue on share taxation is a big worry.

Significant stock news:

1. ICICI Bank fixed price band for its FPO at Rs 885-950.
2. Government may increase FII investment in oil PSUs from current 23% to 49%.

My stock for Long term investors:

1. EID Parry: Mutual funds have started accumulating this stock at low prices. Duration 1-2 years.
2. Long term investors should stay away from IT and Textile stocks and shares of companies whose business is mainly depended on US exports.
3. Weakness in dollar will continue against international currencies coupled with slow down in US economic growth will leads to major correction in International stock markets.
4. It is better for cautious long term investors to stay away from the markets until this volatility is over.

Positive stock news:

1. Kingfisher joined the race to acquire SpiceJet.
2. Aurobindo Pharma received US FDA approval for Tralandopril.
3. BHP Billiton may buy 51% stake in Ashapura Minichem’s Aluminium project in Orissa.
4. Cranes Software will buy Proland Software.
5. Indiabulls tied up with Europe’s Strabag SE.
6. NTPC is in race to set up power exchange.

Negative news:

1. Hindalco and Nalco slashed Aluminium prices.
2. Unsatisfactory progress of monsoons.
3. Oil prices are in upswing.
4. Hindalco will see selling pressure.


Best stock picks for day traders and investors:

1. BEML:
2. Sparsh BPO: Stake sale.
3. Orchid Chemicals: It may bounce back.
4. Aurobindo Pharma: US FDA approval.
5. Ashapura Minichem: Stake sale.
6. Dewan Housing and S Kumars nation: Positive momentum.
7. Royal Orchid hotels.
8. Mahindra&Mahindra: New Scorpio launch.

Please share your views on my stock analysis.

Black days will continue for Indian investors

Today will be another painful day for Indian Investors. Some operators are trying to keep the positive momentum in the hyped and overvalued markets by raising the stock prices like Hindalco and ACC without any specific reason. But negative triggers emerging from global markets will continue to dampen the spirit of those bull operators. Correction is due for some time and markets will continue to give losses for some more time.

Market movements: BSE Sensex will trade between 14,000-13,870 while Nifty will trade between 4115-4075. Sentiment is very weak in the markets. Some late recovery may be seen.

Stock of the day: Time Technoplast.

My Stock advice:

1. Don’t be hyped by DLF subscription data. Most of those bids were by foreign investors with long term view. DLF will give heavy losses to medium term investors but may give good returns on listing day. I prefer Vishal retail.

2. Investors may buy good stocks after crash with BTST (Buy Today and Sell Tomorrow). This advice is only for risk taking investors.

Why DLF will rise on the listing day?

Foreign and long term investors who missed the allotment will lift the stock by buying on the day of listing.

Significant News:

1. Government will take measures to reduce overheating in Real-Estate and Housing- Finance Minister.
2. Time Technoplast will be listed today. Investors may make smart gains.

Negative stock News:

1. Indian consumer durables production is decreased.
2. Mayawati government will probe land allotments to IVRCL and others in Noida, Lucknow and Kanpur.

Positive stock news:

1. Reliance Energy’s Dadri project may get clearance from UP government.
2. L & T got Rs 911 crore order from ONGC and SAIL.
3. Cadila mulls to launch GDR issue.
4. Sundaram InfoTech bagged Microsoft order.
5. Government will give some sops to Textile sector. Short term risk taking investors may buy these stocks for short-medium term.
6. Deccan Aviation will hike prices in some routes.

My Stock picks for medium-long term investors:

1. Carborundum
2. Britannia.
3. Fortis health care.
4. Wire and Wireless (2-3 years).
5. Berger Paints.
6. Bharti Shipyard.
7. Areva T&D
8. Idea Cellular(6-12 months) and Tata tele.
9. RNRL (1-2 years).
10. Ispat Industries.

Note: Due to my personal busy schedule, I am unable to do sufficient research on stock markets to recommend stock picks for day traders. Mistakes are regretted. Am I addicted to blogging and stock markets? May be.

Black Friday for Indian share market investors

D-Day finally arrived. Indian stock markets will be suffered huge losses and will see a panic selling from investors on black Friday. Nifty will fall below the final support point that exists at 4090 and BSE Sensex may lose 300-400 points. Long term investors can buy sound stocks at attractive price after the heavy fall. Though fall in markets is bad, it is good for long term investors.

Sentiment: Indian investors will see second biggest crash of 2007. All the global markets have suffered huge losses especially Dow Jones and Japan and Taiwan markets.

Sector of the day: IT and Sugar shares will be in lime light due to Government decision to allow sugar mills to retain central excise for 3 years from 2007 July.

Good signs:
1. Inflation is under control and it will be around 5%. Stocks may bounce back in the afternoon session due to inflation data or over correction.
2. Dollar may gain on weak currency.

Stock of the Day: Patni computers.

My stocks:

Enter into these stocks after the crash. Risk taking investors can take future positions in good stocks.

1. Sterlite India Industries.
2. Hindustan construction company (HCC)-Medium term.
3. Ispat industries – Long term.
4. Mahindra and Mahindra- short-medium term.
5. Idea Cellular.
6. Reliance Communications.
7. Patni Computers.
8. Cambridge Solutions.
9. Tata Chemicals.
10. Suzlon Energy.
11. Aurobindo Pharma and Glenmark Pharma.
12. AIA Engineering.
13. Alok Industries.

Significant stock news:

1. Textile sector will get relief package from government within a week or so. Take short term bet on textile stocks.
2. Tamilnadu petrochemicals- short-medium term with some risk.

Stock advice:

1. Mahindra and Mahindra will be going to rise in short term due to lack of options in auto sector.
2. I don’t believe in this Hindalco rise. It is a clear sign of herd mentality and I can’t understand why investors always fell in the trap of operators.
3. Risk taking investors can take short position in Tata tea.

Positive stock News:

1. Tantia construction received $1.8 billion order.
2. Patni computers will continue to rise on stake sale.
3. HCC got contract from Tata Steel.
4. Biocon signed MOU with an Australian University.
5. ONGC Board approved Rs 1200 crore investment to develop oss-shore fields in Mumbai high. 6. Mahindra and Mahindra is in acquisition mood in Italy.
7. Marico industries in restructuring mood and good bet for medium term.
8. Biotech industry touched $2 billion revenue in 2006-07 financial year.
9. Cambridge solutions is a good bet for short term.

Negative stock news:

1. Idea and Spice telecom called off merger deal. Invest in Spice IPO.
2. Tata motors decreased car production by 20% and delayed launch for India. Closely watch Tata motors, it may available at attractive value by mid July.
3. Negative momentum in Auto stocks will continue for another 10-15 days.
4. Hindalco will lose more around 7-10%.
5. Hindustan Zinc will suffer losses due to fall in Zinc prices.
6. Oil refining stocks will lose yesterday’s gains.

Day traders should stay away from Indian markets. Today is black Friday.

Please share your comments on my stock recommendations and analysis. Please share your views.

Hot Stock picks for Day traders and short term investors

BSE Sensex may touch 15,000 mark in June if rupee stays above 40 Vs dollar. With inflation is under control, RBI may not hike interest rates. With the introduction of futures and options in NSE Nifty junior and CNX 100, bulls will dominate markets due to increase in positive sentiment. Though DLF IPO and ICICI Bank issue will suck some money from markets, markets will rise due to participation by FIIs in selective stocks.

Market Movement: Nifty may touch 4350. Bulls will dominate the markets. Nifty Junior and CNX 100 stocks may see increase in volumes due to futures and options trading.

Warning for long term investors: If any major negative news breaks out, it will see a big crash in the markets due to high valuations in blue chips. Don’t take long positions in major stocks.

Significant News:

1. Indian economy grew at 9.4% in 2006-07 due to wonderful performance by Manufacturing, Services and Mining sectors.
2. Slow down in agricultural sector is a concern.
3. Reliance Money, online trading platform, will increase trading kiosks to 10,000 by March 2008 and to 25,000 by March 2009.
4. Amtek Auto will acquire the foundry business of UK based JL French castings.
5. L & T will spend Rs 2500 crore in expansion in 2007-08.
6. India became trillion dollar economy.
7. Closely watch Textile stock Himatsingka Seide share. It is currently trading at Rs 110.8.
8. Parsvnath announced the launch of Paliwal city in Panipat.

Negative news:

1. Average income of an Indian is less than Rs 2500 per month.
2. Low cost airlines like Spice Jet and Go Air may suffer heavy losses with recent consolidation in Indian Air space.
3. 50 Doctors will quit Escorts heart institute to Join Apollo. Stay away from Fortis health care stock.
4. Amtek Auto is a safe stock for short term investors. Target is 425 -427.
5. Thermax, Punj Lioyd and Reliance Communication may see some profit booking.
6. Stay away from MTNL as its ADR suffered big loss.
7. Sterlite, Hindustan Zinc and Hindalco may rise due to increase in metal prices.

Stock Market advice:

1. Enter into TCS around Rs 1202-1205 with stop loss at 1195.
2. Glenmark Pharma is a good short term bet with some risk. Target 740.
3. Idea is a safe short term bet with a target of 150-160. It may sell some stake in 2-3 months.
4. Tata Tea is a good stock for short term investors with a target of 1000.

Hot stocks for Day trading:

1. Adhunik Metaliks: 74% growth in revenues and 130% rise in profits.
CMP: 53.20
Target: 55 and 57
Stop Loss: 51
Wonderful results. Good share for short term investor.

2. Tata Tea: Good bet for short term investors.
CMP: 920
Target: 932 and 948
Stop loss: 895
It will acquire Mount Everest and 42% stake of Himalayan Mineral water. Today is the results day.

3. United Breweries: Air Deccan Buy.

4. Reliance Capital:
CMP: 953.5
Target: 971
Stop Loss: 937
It already crossed daily turnover Rs 600 crore just within one month of launch.

5. Wockhardt Pharma: US FDA approval for Terbinafine.
CMP: 413.7
Target: 419
Stop loss: 406

6. Amtek Auto: Acquisition news.

7. Educomp Solutions: New contract with Haryana government.

Stocks to watch out:

1. Akruti Nirman.
2. Sun Pharma and Glaxo.
3. Aditya Birla Nuvo.
4. TV Today.
5. Parsvnath Developers.

Please share your views and recommendations.

Stay away from Indian stock markets

It is better for retail investors to stay away from Indian stock markets as markets are in the grip of bears and operators. Markets may see some volatility in the mid session before crashing. BSE Sensex may lose 150-200 while NSE Nifty will break 4,200 resistance. Is it necessary to trade in these circumstances?

Advice: Stay away from markets.

Market sentiment: Bearish/ Heavy crash. Inflation data may change market movement.

Why markets may crash today?

1. Weakness in US Markets and Indian ADRs suffered losses.
2. Big fall in Asian markets on US economy concerns.
3. Fall in metal prices.
4. Derivative contracts expiry.
5. CRR hike concerns.
6. Profit booking in select stocks.
7. Rupee appreciation.
Advice: Stay away from markets.

Significant news:

1. Future valuation of the land may negatively impact the real Estate companies.
2. Anil Ambani’s SEZ is in trouble. Ambani group got DTH license.
3. NSE is the third fastest growing exchange in the world.
4. 500-550 is the price band of DLF IPO.
5. Revamp of Public sector bank’s portfolio will affect their return on assets.
6. Suzlon secures REPOWER bid.

Stock picks for Day Traders: (With risk)

1. BPCL:
CMP: 371
Target: 379
Stop Loss: 364

2. HPCL:
CMP: 286.5
Target: 295
Stop Loss: 280

3. Fortis healthcare:
Fortis and Trehan may attempt out-of-court settlement.

4. City Union Bank
CMP: 195.3
Target: 202.5
Stop Loss: 192
Stake selling report.

Stocks to watch out for:

BHEL, ITC, Suzlon and IPCA Labs.

Stay away from these stocks:

1. Copper prices are down. Stay away from Hindalco and Sterlite.

Share your stock recommendations.

Indian Stock Markets on May 15, 2007

Indian Share Markets may fall in the initial trading session due to booking of profits by investors in stocks like SBI and Reliance Capital. BSE Sensex and NSE Nifty may range-bound after initial losses. Appreciation of rupee will spoil the fortunes of IT stocks.

Market Trend: Volatile/Bearish.

Warning News:

1. CAG slammed the IT department for under-assessing the income of Reliance Industries, Tata Motors and Bank of Baroda.

2. Rupee is appreciating again against dollar. Stay away from IT Stocks.

3. Asian markets are in bearish mood.

4. Indian ADRs suffered losses yesterday.

5. Copper price is in drastic down trend. Stay away from Hindalco and Sterlite.

Request for Medium/Long term investors:

1. Stay away from sugar stocks. It will take another 1 year to turnaround the fortunes of these companies. These Government sops will not remove the original problems of sugar industry.

Best Stock picks for Indian Day Traders:

1. Voltas:
CMP: 96.8
Target: 103
Stop Loss: 90
It posted 5-fold rise in Q4 profit while net sales rose by 38%.

2. Tech Mahindra:
CMP: 1530.9
Target: 1542 and 1558
Stop Loss: 1514
It announced alliance with Sun Microsystems to provide systems and software for IPTV services to customers in India and Asia pacific markets.

3. Network 18
CMP: 563
Target: 574
Stop Loss: 540
Reliance Capital acquired 5% stake in NW18.

4. Zee TV:
CMP: 284
Target: 287 and 290
Stop Loss: 280
It is very aggressive in forming alternate cricket league by including all time greats like Kapil Dev, Brian Lara and Glen McGrath.

5. Reliance communications will launch Blackberry in CDMA. Enter into this stock with some risk. You may enter this stock after initial losses.
CMP: 482.9
Target: 488
Stop Loss: 476

6. Granules India:
CMP:129
Target: 132 and 135
Stop Loss: 126.5
It received US FDA approvals for its 2 plants in Andhra Pradesh.

Negative News:

1. Stay away from Sun TV. Its battle with DMK government is getting murkier day by day.
2. Stay away from Thermax. Purolite of US files espionage suit against Thermax.
3. Stay away from Reliance Industries and Tata motor. CAG news may spoil the sentiment in these stocks.

Analysis – Indian Stock markets in May

Indian investors lost heavily in the May for the past 3 years due to various reasons. Will the history repeat this year also? I don’t think so. If investors plan their investment strategy around mid caps, they may earn good money. Investors may book profits in some large caps.

Crucial Point: Don’t give too much importance to the movements of BSE Sensex or Nifty. Invest in good stocks at better price. Better stay away from small caps and rupee stocks. There will be no buyers when this bull phase is over. Book profits when you reach your goal. Never be sentimental with your stocks.

Following events may determine the stock movements in May:

Good News:

1. Inflation is under control. RBI may not take strict measures.
2. Good company results and better earnings forecasts.
3. Higher metal prices.
4. No major negative trigger points and political stability.
5. Good monsoon expectation.

Bad News:

1. Uttar Pradesh elections. Exit polls are indicating tough time for Congress and UPA.
2. Overvalued markets. No major trigger points that propel stock markets into higher peaks.
3. Appreciation of rupee. Along with inflation, this will determine the movement of stocks.
4. Higher prices of blue chip stocks like Reliance Industries, Bharti etc.
5. Better earnings in other emerging markets may decrease FII inflows.

If investors book profits, stock market may move downwards irrespective of any trigger points. If this happens, enter into good stocks at lower price.

My stocks for Long term Investors (2-3 years):

Future growth sectors:

1. Capital Goods
2. Shipping
3. Power

Select good stocks in these sectors for better returns.

Follow the following stocks carefully; invest them at better price (not at this level).

1. Tata Motors
2. Reliance Capital
3. Reliance Petro
4. Praj Industries
5. RNRL
6. Bharat Shipyard
7. Cipla (invest in this stock after 2-3 months)
8. Sugar Stocks (Invest in the shares after 6-9 months)
9. Hindalco and Tata steel will give excellent returns if you have patience.

My Stock Advice:

Never invest in sugar, Real Estate and IT stocks in the short term. This is my advice. You may not get good returns from large caps. Concentrate on good mid caps.

Following stocks will be dropped from MSCI Index:
1. Biocon
2. Matrix Labs
3. Bank of Baroda
4. Arvind Mills

Share your opinion on Indian stock markets.

Analysis: Indian Stock Markets this week

Indian investors experienced most volatile week in which bears and bulls experienced similar situation. On black Monday, BSE SENSEX lost 616 points – it is the second biggest fall in the BSE history. But, Markets sharply recovered then onwards. This signifies the strength in the fundamentals of Indian economy. Courtesy: BSE India
Day Traders:

Except Monday, Indian stock markets responded similar to other Asian markets. Day Traders should closely watch US and Asian markets before taking investment decisions. Another significant fact is some stocks (Dr.Reddys, Infosys, Satyam, and TCS) are following similar pattern of their US ADRs.

Pharma Stocks:

This is the week of Pharma stocks. Aurobindo Pharma, Orchid Chemicals, Lupin rose heavily as they got orders and permission news from foreign shores.

Zee rose due to Subhash Chandra’s announcement on Indian cricket league. BHEL is the most positive stock in the market as its past and future are looking bright.
Bank stocks and Auto Stocks are the major losers this week due to hike in CRR and REPO rates.

Next week:

Markets gave no clues about the future direction in the week. Infosys results and predictions may give some clues about market direction.
Volatile markets are the ideal platforms for astute day traders.

Investment strategy for black Monday (April 2, 2007)

BSE SENSEX will lose around 300-500 points on black Monday (1-4-207) as Reserve Bank of India raised Repo rate and CRR. Though global cues are not that bad, market will crash due to heavy selling in select stocks from panic Investors. India Stock Markets will see correction in this week. Investors should monitor their investments carefully.

Investment strategy:

Exit from Banking, Auto, Construction and FMCG stocks as they rely heavily on consumption power of people which will be decreased due to RBI measures. Bank shares will be worst affected.

Stocks for Day Traders:

Tata Power, Moser Baer.

Advice for long term Investors:

Enter into select mid cap stocks on Monday evening as they will be available for attractive prices. Exit from blue chip stocks like ICICI Bank, SBI and Reliance Industries. In my opinion, Mid-cap shares may give high returns in this financial year.

Conclusion:

Market movements in this week will decide the future direction of Indices. Failure to control the inflation despite corrective measures of RBI and Government is a major conern.

Don’t get panic. Wait for opportunities. Never follow the mob.

Indian stock markets - Technical Analysis

Though Indian share markets gained 214.5 (BSE) and 70 (NSE) points, investors should not get carried away by index values. As Japan and US banks will announce their decisions on interest rates on tuesday and wednesday, this is going to be crucial week for stock markets. In India, inflation is again moving north which is another bad sign for share markets.

My opinion:

Wait and watch. If either bad news came from foreign banks or inflation rises, markets will crumble under selling pressure. This week is crucial in deciding the future of Indian share markets. Ideal time to enter markets is next week. As companies will announce results (most of them will be positive), markets again rise to >13,000 mark.

If you are long term investor, this is the ideal time to buy value stocks.

My stock picks:

6 Months-1 year: TVS Motors, Ranbaxy, Finolex Cables.
1 year-3years: Tata steel, Hindalco, Arvind Mills, Deccan Chronicle, Novartis India

Final comment:
BSE Sensex may fall below 12,000 mark this week.