Madness reached extremities in the mrkets

Indian Stock markets are moving in the opposite direction to the global markets in the recent sessions. I have reservations about yesterday’s steep rise as most of positions are short term. I strongly believe that this Bull Run may not last long. One thing is sure we are going to see another major correction in the coming days. Media is the major culprit in creating this hype among the innocent investors. Madness and hype reached to the extreme levels.

Stock of the week: Sterlite Industries.

Rumour of the day:

1. IT Department may conduct raids on the offices of irregular traders and offices.
2. HCL Tech will sign $100 million deal in Aerospace services.
3. Garware offshore may rise due to hostile bid rumours.

Significant News:

1. Price band for Spice Telecom IPO is Rs 42- Rs 46.
2. Jet will announce $400 million rights issue on June 26.

Positive Stock news:

1. Sterlite got wonderful response to its ADR.
2. Aurobindo Pharma received approval for Zidovudine from MCC of South Africa.
3. Jindal Saw and Adlabs announce wonderful results. Can they able to sustain this growth?
4. Dr Reddys will produce Rs 3 cardiac drug.
5. LIC Housing finance will launch reverse mortgage product within a month.
6. Indian Hotels announced good results.
7. Ipca Labs got US FDA approval for Hydroxychloroquine.
8. SREI Infra posted bumper results.

Negative Stock news:

1. Don’t go by the hype of ICICI Bank FPO subscription numbers. Your earnings will depend on the market sentiment on the listing time which seems to be bleak.

Best stocks for Day traders and investors:

1. Rico Auto: JV TALK.
2. Dena Bank: Bulk buying.
3. Sterlite: ADR success.
4. L&T: Order Talk.
5. HCL Tech: If rupee is stable against dollar.
6. Aurobindo Pharma:
7. LIC Housing finance.

My Pharma picks: (If markets are stable)

1. Aurabindo Pharma: Strong prospects of growth.
2. Matrix Labs: Strictly for long term.
3. Divis and Dishman Pharma: Good stocks but steep rise recently.
4. Jubilient: Long term.
5. Dabur Pharma and Suven Life Sciences: Closely observe for long term.
6. Panacea Biotech is a good bet in Biotechnology space.

Why some brokers are worst people in the world?

It is time and again SEBI is unearthing illegal activities by leading brokers. SEBI found fixing in F&O contracts by 24 market players on the National stock exchange. They have created artificial volumes in Futures and Options during January and March period. That’s why I advice investors to stay away from day trading and futures and options. Invest in good stocks and have sound sleep.

Some of the rogues are:

1. Indiabulls Securities.
2. Rakhi Trading.
3. Kasam Holding.
4. TLB Securities.
Please share your stock ideas.

Stock Markets may see some correction on tuesday

Indian stock markets will correct on Tuesday due to profit booking, rupee appreciation and rise in crude oil price in the initial session. Markets may recover to some extent in the afternoon session.

US markets gave no significant clues while European markets rose due to rise in metal and crude prices. Indian markets will not follow global and Asian markets on Tuesday (My opinion).

Sentiment: Bullish/Volatile.

Positive trigger:

Rise in metal prices. Metal stocks will shine on Tuesday.

Warning News:

1. Crude oil price surged past $70 due to unrest in Nigeria. Reliance and Government oil refining stocks will suffer losses.

2. Front line stocks like Reliance Industries rose too much without any reason. This may play spoilsport to the market sentiment.

Stock recommendation for long term investors:

1. Idea Cellular:
Stock will cross 250 within one year due to exponential growth in Telecom space. This is the safe bet for long term investors.

Hot Stock picks for Day Traders:

1. Raj TV:
CMP: 262
Target: 271 and 277.
Stop Loss: 252
DMK-Raj TV alliance will trigger short-term growth for this network. It may cross 300 in this week. It bagged licences to launch 3 new channels.

2. TV 18:
CMP: 850
Target: 881
Stop Loss: 807
It forms an alliance with Virgin comics. It plans to launch an entertainment channel.
Caution: Investors may book profits in the initial session.

3. Orbit Corporation:
CMP: 229.5
Target: 233 and 237
Stop Loss: 222
Net profit rose 8,533% while sales rose 4,190%.

4. Satyam:
CMP: 447.5
Target: 457
Stop Loss: 443
Satyam signed contract with Hawker Beechcraft Corporation.
Caution: Rupee Vs Dollar.

5. Ranbaxy:
CMP: 400.7
Target: 403.5 and 406.5
Stop Loss: 398.3
Ranbaxy received approval to market Pravastatin in Canada.

6. Sterlite, Hindalco and Hindustan Zinc- Closely watch metal prices.

7. Dr Reddy’s Labs: Unexpected loss on Monday.

8. Reliance Energy and Reliance Communication will continue their bull run.

9. Closely watch Wockhardt, Tata Motors and NDTV.

Negative Stock Picks for Investors:

1. Stay away from SUN TV. Its quarrel with DMK government hits nadir.
2. Stay away from Everest Kanto.
3. Stay away from oil refining stocks like HPCL, BPCL and IOC.
4. Stay away from Apollo Tyres.

Please share your stock recommendations.

India’s fastest growing companies

Business today magazine published a special article on India’s fastest growing companies. It selected 63 large caps, 29 midcaps and 25 small caps as fastest growing companies. These are safe bets for long term investors. Cement, Construction and Metal companies dominated the listing. You can pick 2-3 future stars if you carefully analyze the data.

Caution: This selection represents the performance of the companies in the past year but not the future growth prospects.

Fastest Growing large cap companies:
1. Hindustan Zinc
2. Welspun Gujarat
3. Unitech
4. Pantaloon Retail
5. Ultratech cement
6. Gujarat Ambuja Cement
7. Nagarjuna Construction
8. Aurobindo Pharma
9. Hindalco
10. United Spirits

Fastest growing Midcap Companies:

1. Kalpataru Power transmission
2. Shree Cement
3. Hindustan Copper
4. Centurion Bank of Punjab
51. Man Industries

Fastest growing small companies:

1. Era Constructions
2. Asian Electronics
3. ICSA
4. ORD Informatics
5. Ansal Housing

If you want more information about these companies, read Business Today dated March 6, 2007.