Are you ready for consolidation?

Indian stock markets will consolidate in the coming days due to profit booking and negative triggers. Inflation will rise due to rising crude prices and IT giants will post unimpressive results. Too much rise in realty stocks is a real concern. There will be heavy selling in these stocks in the coming sessions. Don’t forget, it is consolidation but not crash.

Global cues: US markets once again ended on positive note. Tata motors ADR and VSNL ADR are significant gainers.

Stock of the day: Vishal Retail. I recommended this IPO for exceptional earnings. Investors who got allotment will get 100-150% returns on the listing day. Vishal will list around Rs 550-600 and may even touch Rs 650-700 within one week.

Significant news:

1. RBI is optimistic on economic growth.

Positive stock news:

1. IOC may acquire stake in Petkim of Turkey.
2. Reliance and Bharti short listed for Qatar mobile license.
3. Temasek will buy 5% stake in Bharti Airtel.
4. Eicher motor announced good sales overcoming bad sentiment.
5. Prism cement may continue to gain.
6. Ashok Leyland signed JV with Finland Company.
7. Bombay rayon bought Leela laces.
8. India Foils stake sale.

Negative stock news:

1. Moody downgraded Tata Power on account of aggressive expansion.
2. No hike in fuel prices-Political decision. Stay away from HPCL and BPCL.

Stock advice:

1. Exit from RNRL and RPL. Returns are minimal from these prices.
2. IDBI and IDFC may move upwards at anytime. Closely watch these stocks.
3. Today is crucial for IFCI. If it crosses 66, it will touch 75 within 2 days.
4. Book profits in GMR Infra and enter into this on dips. Too much rise within a short period is always a concern.
5. Dena Bank and Deepak Fertilisers are safe ones in this consolidation mood.
6. Ashok Leyland may continue to gain in the short-medium term.
7. NSE barred Futures and Options in IFCI and Nagarjuna Fertilisers.
8. ONGC may move upwards at any time. Keep an eye on this stock.

Stock picks for day traders:

1. Vishal Retail.
2. India Foils.

Note: I will partially book profits in my holdings. I may enter Dena bank, PFC and Fortis in the coming days at appropriate time. I hold my IFCI holdings irrespective of short term changes.