Extreme volatility will continue in Indian Stock Markets

US subprime market crisis is spreading its wings from one country to another and creating tremors in the stock markets. Central Banks are releasing more money to protect financial markets from liquidity crisis. But no one is giving clear picture on the magnitude of this crisis. Unknown devil is more dangerous than known one. So fear will cause more danger than real problem. This uncertainty and volatility will continue until the magnitude of this crisis will be revealed. Stock Markets are now only for speculators not for investors. Don’t do technical trading, just depend on news based trading in these volatile times.

Global Markets: US markets like Indian Markets ended with minor loss after sharp recovery in the late session on Friday due to pumping of funds by Central Banks to curtail liquidity crisis. Asian Markets are in positive momentum with sharp volatility.

Market Movements: Volatile trading with more than 100 points intra-day swings.

1. BSE Sensex:
CMP: 14868.
Resistance: 14980
Support: 14660.

2. NSE Nifty:
CMP: 4333.
Resistance: 4400.
Support: 4250.

Significant Views:

1. S&P included IT giants, Infosys, Wipro and Satyam, in Warren Buffett model portfolio.
2. Indian Stock Market is the most expensive one in Asia-Pacific region. India is the least attractive one for Investments – Citi Group.

Positive News:

1. JSW Steel acquired 2.5-acre property of Orbit Corporation in Mumbai for Rs 800 crore.
2. ONGC-Mittal won gas block in Trinidad-Tobago.
3. TTML won bid for coin operated telephones.
4. Government will sell 10% stake in Oil India to Oil refineries.
5. Wipro is in JV with Boeing MRO facility.
6. Government will announce new Aviation policy in this week.
7. Bisleri will enter into International markets by September.

Negative News:

1. More delay in Tata Motors 1-lakh car project due to problems in Singur project.
2. Hindustan Oil Exploration shut down well at PY-3 field.

Stock Market Analysis:

1. Central banks are pumping more money into the financial markets to save from liquidity and credit crisis in the short term but it will have negative implications in the medium to long term.

2. IFCI stake sale news will continue to give strength to this stock. Be cautious around Rs 68-69 level. IFCI should break its strong resistance level of Rs 68-69 for the future rally.

3. Reliance Communications will bounce back at any time. Accumulate this stock in SIP way.

4. Nifty may bounce back today but short term target is 4100.

5. Biggest problem is no one exactly knows the severity of Subprime market crisis. Unless this is solved, markets will continue this current volatile run. Domestic Financial Institutions are saving the market from collapse by buying in equities. Will this continue?

6. RNRL and JP Hydro will consolidate in the short term due to their vertical run-up.

7. Banking Stocks: Benefits of new ECB norms are nullified by Subprime crisis.

Best Stocks for Day Traders:

1. IFCI:
CMP: 65.3
Target: 68.

2. Reliance Communications:
CMP: 520.8
Target: 529 and 536.

3. Reliance Energy:
CMP: 748.
Target: 760.

4. Most stocks will open on positive note but gradually move down due to profit booking. Real investors should stay away from Markets up to August 16. August 15 is the last date for current hedge withdrawals.

My opinion is implications of subprime crisis are more severe than analysts’ estimates. But strong economic growth is saving the markets from melt down. It will be better to stay away from Stock markets for some more time. Short term spikes are not sustainable. August, 2007 will be remembered forever in the Stock Market history due this crisis. Sit on cash for better opportunities in blue chips in the coming days.

Note: I hve holdings in some of the stocks discussed here.

Please share your views and Stock Recommendations.

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.

Indian Stock Markets on May 17, 2007

Indian stock markets may fall in the initial trading due to booking of profits. Markets recovery may depend on Rupee appreciation and crude price. Day Traders may enter into my stock picks after the settlement of initial mayhem (15-30 minutes).

Market sentiment: Bearish and Volatile.

Significant News:

1. Copper prices are falling. Stay away from metal stocks.
2. Crude price is falling. Oil refinery stocks may hog limelight.

Stock Picks for Day Traders:

1. Tata Power:
CMP: 588.3
Target: 595, 603 and 614
Stop Loss: 574
Tata power signed MOU a contract with Doosan heavy industries (Value 4,100 crore).

2. Tata Tele:
CMP: 27.35
Target: 28.4 and 30
Stop Loss: 25.9
Tata Tele is in 50:50 JV with Virgin Mobile to introduce Virgin brands in India.

3. Glenmark Pharma: (With some risk)
CMP: 642.8
Target: 653
Stop Loss: 629
It received approval for Parvostatin. Enter into this stock after initial selling (if any).

Positive Stock News:

1. Wipro bagged “SAP Pinnacle award” in software solutions area.

Negative Stock news:

1. Essar steel SEZ is in troubles. It will see massive selloff from investors.
2. Raj TV may not grow much.
3. Export duty may land Indian diamond industry in troubles.
4. Wockhardt and Abbott are in legal tussle. Stay away from Wockhardt.

Please share your stock picks.

Indian share Markets may range-bound

Indian share markets are continuing their volatile sessions. Stock Markets may range bound today due losses in the past trading sessions. Most of the stocks are seeing heavy selling/buying without any specific reason. Investors in these stocks may suffer the fate of Teledata investors. Oil refining stocks (BPCL, HPCL and IOC) may rise due to drop in crude prices.

NSE: 4111
Support: 4090 and 4070
Resistance: 4144 and 4178.

Warning News:

1. RBI may increase CRR but not Repo rates – JPMorgan.
2. Business confidence was down in Q4 – FICCI Survey.
3. RBI sent strong warning note to banks. Stay away from public sector bank stocks.
4. Copper price fell on ending of Peru strike and profit booking. Be careful with Hindalco and Sterlite.
5. Indian ADRs lost yesterday despite rise in DOW.

Stock Picks for Day Traders:

1. Reliance Capital
CMP: 742.9
Resistance: 757, 772 and 781.
Support: 734
Global investment firms eye stake in Reliance Capital. This is a best stock for Long term investors. It may touch 1200 within 2 years. Forget short term fluctuations in Reliance Capital.

2. Reliance Communications
CMP: 466.5
Resistance: 474 and 481
Support: 461

Stay away from following stocks:

1. Real estate stocks may see some selling due to DLF IPO clearance from SEBI.
2. Deccan Aviation will not sell stake to King Fisher.
3. Public sector bank stocks may lose heavily due to RBI letter.

Stock picks for Long term Investors:

1. Reliance Communications
Enter into this stock at 400-430 level. It has big plans for the future growth. It plans nationwide rollout of DTH and Metro IPTV. It will spend 2.5 billion US Dollar in network expansion.

2. Stay away from Auto and Real Estate stocks. Oversupply of office space is a concern.


Rupee impact on Stocks (Credit Suisse report):

1. Gainers: Engineering and Construction Stocks, Reliance Communications, Oil refining stocks like BPCL, HPCL, IOC, Container Corporation, HT Media, United Breweries, Sterlite, Titan, Zee, Exide and Adani Enterprises.

2. Losers: IT Stocks, Pharma Stocks, Hotel and Tourism Stocks and some oil stocks like Essar Oil.

Share your ideas on the movements of Indian stock markets.

Indian Stock Markets may follow global markets

Indian Stock Markets may follow the global counterparts. Markets may start in positive mood due to positive news from global markets. All the global markets are in positive breadth. Crude is at $64 and rupee is steady.

Tip of the Month: As per research, investors generally sell in May and enter into markets in November. Earnings are generally low in May-November period.

Daily Stock picks for Day Traders:

1. Moser Baer – (355.85)

Resistance – 364 and 372
Support – 342 and 328
Moser Baer reporting increase in net profit to Rs 39.72 crore for the last quarter ended March 31. This is against Rs 35 lakh for the corresponding previous period.

2. Apollo Tyres – (315.9).

Resistanace is at – 326.78 and 337.67
Support is at – 298 and 280.

Apollo Tyres Ltd said its board had approved a move to split each of its share into 10. Apollo Tyres reported net profit of Rs 42.71 crore in Q4 versus Rs 26.38 crore in comparable period.

3. Reliance Petro – (80.95)

Resistance – 81.7, 82.4 and 83.4
Support – 80 and 79

4. Suzlon Energy – (1187.5)

Resistance – 1210 and 1233.
Support – 1162 and 1137.

Suzlon Energy bags contact to supply wind turbines of 400 MW capacity to US Based PPM energy.

5. IBP – (441.4)

Resistance – 448.6 and 455.8
Support – 434.6 and 427.8

6. Tata Chemicals – (217.95)

Resiastance – 220.4, 222.98 and 225. 97
Support – 214.9 and 211.9

7. Deccan Aviation – (104)

Resistance – 106.6 and 109.2
Support – 102 and 101.

Company Results:

Following companies will announce results today. Closely follow these stocks today and Day Traders should invest immediately if these companies announce good results. Speed of execution is crucial.

1. Eicher Motors – (270.75)
Resistance – 276, 281 and 287.
Support – 264 and 258.

2. Aditya Birla Nuvo – (1147.45)
Resistance – 1159.9, 1172.35 and 1189.8
Support – 1130 and 1112.

3. IFCI – (44.75)
Resistance– 46.9 and 49.
Support– 41 and 38.

4. Kansai nerolac – (718.75)
Resistance – 733 and 748.
Support – 709 and 700.

5. Orchid Chemicals – (258.4)
Resistance – 266.9 and 275.4
Support – 253 and 247.6

6. HDFC – (1666.35)
Resistance – 1696 and 1722
Support – 1633 and 1600

7. Varun Shipping – (60.4)
Resistance – 66 and 72
Support – 56 and 52

8. United Phosphorous Ltd. – (330.55)
Resistance – 342.9 and 355.3
Support – 320 and 309.6


Positive news for Day Traders:

1. Tech Mahindra was ranked as one of the top 10 leaders in Global outsourcing business.
2. Maruti car sales rose again in April after a dip in March.
3. Hero Honda sales rose in April.
4. Usher Agro net profit jumps 233% for Q3.
5. Tata Sons consolidated its stake in Tata Tea.
6. Steel companies may raise prices.
7. The Union Ministry of Company Affairs has approved the merger of IBP Ltd with IOC.
8. Tata chemicals is in massive expansion plan.

Negative News for Stock Investors:

1. Stay away from Gayatri projects due to its poor results.
2. Tata Motors commercial vehicle sales fell in April but total sales rose around 11%.
3. TVS Motors sales down in April.
4. I-Flex technologies results are not impressive.

Indian Stock markets may continue Bear run

Indian Stock Markets may continue their downfall on Monday also. No significant positive news from global markets may trigger another fall today. Nifty may lose around 60-70 points. We may see some buying in the evening session as some good stocks may available at attractive values.

Asian Stock Markets:

All the Asian markets are in downward trend due to growth concerns in US and Chinese economies.

Stock Picks for Day Traders:

IFCI and Aurobindo pharma

Day Trader Stock news:

1. Aurobindo Pharma got approval for Metformin in South African market.
2. Parsvnath to replace Visualsoft in S&P CNX 500 Index from today.
3. Stay away from ICICI Bank.
4. GMR Infra plans to set up an Aviation SEZ in Hyderabad.
5. Bharti signed an agreement to build the first high bandwidth optical fiber submarine cable system.
6. India Bulls real estate may gain due to results sentiment (but not in early trading).
7. Mind Tree may see high volumes due to its results.
8. JSW Steel may fall 2%-4%.

Economic Times Stocks of the Week:

Reliance Industries, Grasim, Maruti and Yes Bank for this week and Sesa Goa for long term.

ICICI Direct stock of the Week:

Bongaigaon Refinery & Petrochemicals Ltd.

It is better for investors to follow wait and watch game as Markets are in volatile phase.

Bulls are dominating Indian Stock Markets

Indian Stock Markets may continue their bull run today. Positive cues from global markets and Reliance results will help in continuing the bull run of the Indian shares.
Advice: Never enter in the first 2 minutes as most of the stocks will start on high note on bull days.

Global Markets: All the global markets are on positive mood and Dow Jones crossed 13,000 yesterday. Asian stocks are continuing their positive momentum. These are good signs for Indian Share markets.

Crude oil prices are reaching new highs. Rupee is attaining new highs.

News of The day: Reliance Industries will announce results today. It will have a major impact on the movement of markets.

Stocks of the Day:

1. Eicher Motors
2. Grasim Industries
3. Reliance Industries
4. Larsen and Toubro
5. Cipla
6. Marico
7. Dr Reddys Labs

Positive Stock news:

1. L&T bags order worth Rs 200 crore from UAE firm.
2. TV 18 to launch 2 new channels.
3. Dr Reddys labs received approval for Zolpidem.
4. Dabur India has highest growth in oral care.
5. Reliance Energy may gain today due to marginal loss yesterday.

Negative Stock news:

1. Nalco announced disappointing results.

Indian Stock Markets are shining

Indian Stock Markets are attaining new peaks as bulls are dominating the markets. Reserve Bank of India fuelled the market mood by not changing the interest rates in its annual credit policy. Bulls will dominate the markets in this whole week. Day Traders may gain profit by investing in rising stocks. Long term investors should stay away from Indian stock markets in these volatile times especially from blue chip stocks and banking stocks.

Breaking News: Dollar falls below 41 mark against rupee. Stay away from IT Stocks.

Observation of the day: Reserve Bank of India changed the inflation target from 5.5% to 5%. So, don’t take long term positions in banking and finance shares.

Global Markets: No significant clues are available from global stock markets.

Stocks of the day:
Banking and Auto shares may rise due to positive sentiment prevailing in these sectors (RBI policy).

IT stocks may lose heavily.

Positive news for Day traders:

1. Wockhardt Ltd. has received approval from the US Food and Drug Administration to sell lisinopril, which is used to treat high blood pressure and heart disease.

2. HDFC posted impressive Q4 results. It is the stock of the day.

3. Elder Pharma may gain slightly.

4. Bajaj Hindustan may rise again due to export subsidies and 3 new plants.

5. Indian oil companies may gain from price hike.

6. Reliance Energy will gain due to power tariff rise.

7. Jubliant Organosys to buy US based Hollister-Stier Labs.

Negative news for Day traders:

1. Rupee is continuously appreciating against Dollar. So, stay away from IT Stocks and Exports based stocks.
2. Stay away from MTNL. Its ADR lost around 7%.

Results today:

1. Grasim, Dena Bank, Idea Cellular, Glenmark, Patni, Godrej Conjumers, Reliance petro, RNRL, Mahindra Gesco and SRF.

Happy Trading! Never change stop loss and target without specific reason.

Indian Day Trader’s Guide – April 10, 2007

Indian stock markets may lose around 100-200 points due to heavy selling in IT stocks and unreasonable rise on Monday. I can’t understand why some investors are madly buying IT stocks on Monday. Are there in right frame of mind?

Global Cues: Rupee appreciated against Dollar and Euro. Stay away from IT shares and export dependent company stocks. Asian markets are spiralling downwards.

Watching Point:

Bank of Japan’s decision on interest rate. Except Hong-Kong market, all other Asian markets lost around 0.5%.

Daily Stock picks for Day Traders:

1. Sesa Goa: As per reports, Mittal’s bid for Sesa Goa is around Rs 2,200 per share. This share may rise around 30-60. It’s power plant gets UNFCCC approval for carbon credits
2. Sun TV: Obtained stay against TDSAT directive on channel sharing.
3. NDTV: Interest of private equity investors raised the valuation of this media giant. It may apply for an IPO in the US or UK.
4. Pantaloon: It is leasing its properties to Reliance retail, Shopper’s STOP, Trent and Life style.
5. Jet Airlines: Out of court settlement.
6. Lanco bags order from DVC.

Exit /Stay away from following stocks:
1. IT Stocks: All are bad news. You will see heavy selling in IT counters. Rupee appreciation, mad rise on Monday, Service tax on leased and rented premises, Lowered expectations on future growth prospects may spell doom for IT Shares.
2. Sugar Stocks: Sugar prices will lower on weak domestic demand and increased sugarcane production worldwide. Wait for the completion of UP elections before buying these stocks.
Request for Short-term Indian Stock market Investors:
Stay away from IT Shares, Banking Stocks, Auto Stocks and Real Estate shares.
Please comment on this article.