IT stocks will hog limelight

It is a golden day for Export Companies but dooms day for many companies. FII selling pressure will gradually impact market in the short term. Will mutual funds and domestic buyers save the market? Markets are at crucial stage and I will closely watch the FII inflow and out flow. Rupee appreciation will be halted against dollar. Major boost for export companies like IT, Textile etc.

Global markets: US Markets ended on positive note after the intra-day volatility. But FIIs will spoil Indian Markets by moving funds from Indian markets to US markets due to dollar appreciation. Lack of liquidity is a concern. Falling crude oil price is the positive cue from global markets.

Market movements: If investors immediately understand the impact of ECB tightening, it will be a sharp fall. If investors temporarily buoyed by IT stocks rise, markets may sustain for some more time.


Sector of the day: IT Sector. 5-10% gains may be possible for these battered stocks.

Stock of the Day: Infosys.

Significant News:

1. No change in fed interest rates. Inflation is a real concern.
2. Fresh restrictions on External Commercial borrowings (ECB). Maximum limit is $ 20 million for rupee.
3. More sops for exporters by this month end. Accumulate these laggards.

Positive Stock news:

1. City Union Bank announced stock split in 1:10 ratio.
2. TTML, Bharti Airtel and R-Com are in race for 51% stake in Kenya Telkom.
3. Telecom companies will get tax benefits due to tower sharing.
4. Take Solutions IPO oversubscribed 59.4% times but retail portion got 23% over subscription.
5. Great Offshore will buy a Scandinavian company for $ 500 million.
6. ICICI Bank cuts deposit rates by 25-50 bps.
7. Punj Lloyd will place a QIP for $ 400 million.
8. India is now the 5th largest crude steel producer.

Negative Stock News:

1. Left Parties blocked Indo-US Nuclear deal.
2. Due to tightening of ECB norms, Companies will have to pay extra money for loans.
3. Falling crude is a positive sign while dollar appreciation is a negative signal for oil marketing companies.

Stock Recommendations for Day Traders:

1. City Union Bank:
CMP: 237.
Target: 242.

2. Infosys:
CMP: 1878.
Target: 1930.

3. Satyam:
CMP: 463.
Target: 478.

4. TCS:
CMP: 1109.
Target: 1140.

5. IFCI: If it breaks 68 resistance.

Please share your views and stock recommendations.

Indian stock Markets will make new highs

Indian share markets will open on positive note with selective buying in specific sectors like Real Estate, Sugar, Telecom and Financial sectors. Auto stocks will see heavy selling in their counters. Market indices will make new highs but may see some profit booking in the late session. Rising crude rate and mixed signals from Global markets are the only concerns.

Stock of the week: IFCI. Target is Rs 63-65.

IPO of the week: Everonn-Best stock for listing gains and Long term. Even though HDIL priced attractively, real estate sector may be in down trend at the time of listing.

Sector of the week: Real Estate due to DLF listing. DLF may not cross Rs 600 on listing. Book profits and exit.

Most significant news:

1. US federal reserve did not hike interest rates.

2. We will try to bring down the inflation to 3% - RBI.

3. DLF listing date is July 5.

4. BSE SENSEX may touch 50,000 by 2018- Morgan Stanley. Foreign investors are waiting for correction to enter into Indian stocks for long term.

Positive stock news:

1. IFCI board will announce stake sale in July 6 board meeting. There is enormous value left in this stock. Don’t book profits immediately.

2. Bank of Baroda sold 0.9% stake in NSE to Citi group at 2,282/share.

3. Tricom India announced wonderful results. Good stock for medium term.

4. Kernex Microsystems announced stock split and bonus.

5. Aurobindo Pharma announced 108% rise in net profit.

6. Tata steel will sell aluminium business of Corus.

7. GMR Infra announced 1:5 stock split.

8. CMC and Tata Technologies may merge with TCS but not Tata Elixi.

9. Emami posted good results and 63% increase in net profit.

10. Reliance Communications tied up with PBTL for international roaming.

11. Moser Baer will take price war to even new titles.

12. Wipro will buy Unza of Singapore.

13. Simplex Infrastructure bagged $11.1 million contract and rise in 29% profits.

14. Biocon will announce overseas listing by the end of next year. Long term investors should closely watch this stock to invest on dips.

15. Telecom companies may announce good subscriber numbers for the month of June.

16. Liberty shoes will dilute its stake in subsidiary to raise funds.

17. ICICI Bank approved $200 million loan to Videocon for acquisitions.

Negative stock news:

1. IPCL Q4 results are disappointing.

2. Bajaj Auto sales were down in June by 12%. Auto stocks will continue to feel the heat.

3. Infosys bidding is a speculation- Capgemini.

4. Tata steel lost bidding battle for Vietnam steel companies.

5. Dr Reddys is the lone Indian company in the SEC list of terrorist link companies.

6. Jewellery companies will be hit by US orders of withdrawal of concessions. Titan Industries will see selling pressure.

Stock advice:

1. Sugar stocks will continue to rise due to change in the fortunes of sugar prices. Keep trailing stop losses.

2. As I said in earlier posts, Investors at last recognised the true potential of GMR infra. You may exit the counter after another 15% rise and re-enter into wonderful stock on dips.

3. Financial stocks like IFCI, IDBI, IDFC, TFCI and PFC will continue to gain in the coming days. But you may get exceptional returns in IDBI and IDFC.

4. I suggested EID Parry for long term investors 10 days back. It already gave 10% returns within 10 days.

5. Capital goods index is at all time high. We may see some selling in this sector in July in spite of orders.

6. Medium term investors can enter into HUL –They will announce wonderful results and dividend. Bonus gossips are spreading.

7. Hinduja TMT will see some positive news within a short term. Risk taking investors can bet on this stock for short term.

8. You can accumulate Cairn India and RPL for long term.

9. Deepak fertilizers will give 10% returns in July due to monsoons and gas supply news.

10. Ranbaxy and Cipla may continue their positive momentum on Monday and Tuesday.

11. Global players want to buy some stake in Jet Lite. Buy Jet Airways on dips for short term gains.

Value stocks for long term investors: Best stocks in correction time.

1. Wire and Wireless.
2. Dish TV.
3. Cheviot.
4. RSWM and Welspun.
5. Raymonds- strictly long term.

Stock picks for medium-short term:

1. HDFC.
2. TCS-Results will not be as disappointing as analysts are thinking.
3. Kernex Microsystems-High risk and high returns.
4. Hindustan Lever.
5. Eastern Silks.

Stocks for day traders:

1. IFCI-Stake sale.
2. Aurobindo Pharma – Wonderful results.
3. RNRL and Tata Tele.
4. IDBI-Stake in IFCI.
5. Tricom India- Good results.
6. Renuka sugars and other sugar stocks – Positive momentum.
7. Unitech, Parsvanath and Sobha.
8. Ranbaxy and Cipla - with risk.
9. Sell IPCL.
10. Sell Bajaj Auto.
11. Sell Titan and Gitanjali Gems.
12. Sell HPCL and BPCL- Crude is above $70.

Why markets will crash in July?

Investors are in euphoric mood due to unexpected rise in the past 2 days. But future is looking bleak due to negative triggers. Except some sectors, most companies will announce disappointing results. It will be difficult for RBI to keep rupee value above 41 against dollar. If RBI will not hike interest rates, inflation will again move northwards. Crude price is another worry.

My advice: Some good stocks are at or near 1 year low. Take long positions in those stocks. Don’t take long positions in the sunrise stocks, most of them are near 52-week high. If markets undergo correction, they will suffer heavily. Sit on cash and buy on dips.

Please share your views on my analysis.

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.

Correction will continue in June due to IPOs

Markets are in the dangerous territory. DLF and ICICI IPOs will suck big amounts from markets in June. Stock markets will continue to trade in this volatile zone for another 20-30 days. If investors accumulate money, they can buy some good stocks at attractive valuations. This is the only happy news in this month. Sometimes correction is also good. Newly entered traders and investors will suffer heavy losses in this whole episode.

Dangerous news:
1. Rupee may fall below 40.50 Vs dollar on the account of increased inflows due to big IPOs.

Most significant news:

1. Slow down in the growth of coal, cement and steel sectors in the first month of current financial year.
2. Petroleum refinery and power sectors showed improvement in growth.
3. Closely watch Berger paints stock as it will announce results today.

Positive stock news:

1. Jammu & Kashmir bank is planning to list in foreign markets.
2. Reliance capital is planning to enter into i-banking.
3. Reliance gas price bids may get clearance from government shortly.
4. Strides Arco labs acquired Grandix Pharma for 100 crore.
5. Hero Honda motors will enter into 4-wheeler components business.
6. Ispat group will invest $3 billion in Bangladesh.
7. GV Films will buy 10% stake in animation company “Sanara”.
8. Yashraj films will tie up with Disney to produce animation films.
9. Yashraj films may form JV with Blackstone group to enter into exhibition business.

Negative Stock News:

1. 10% price correction in the last 6 months in housing sector.
2. Courier companies stocks will suffer heavy losses due to 40% decrease in speed post charges.
Stock advice:
1. Buy Idea, RPL, RNRL and Zee Tele on declines.

Stocks to watch out:

Patni Computers, Jammu Kashmir bank, Berger paints and Reliance.

Note: I will not publish my daily recommendations until June 14 due to busy personal work.
Happy trading.

Unpredictable markets-news based trading

Indian stocks are moving in unpredictable ways with momentum is concentrated on few select stocks. One thing is sure correction due within a short period. Investors may take long positions in blue chips after the correction. Risk taking investors may buy stocks like EID Parry, Wire and Wireless, FDC Pharma, Berger paints and Rajashree sugars.

Stock advice: Don’t believe in the rumours of Hindalco and IDEA take overs.

Sector of the day: Sugar. IT Shares will be in reckoning if Dollar appreciates against rupee.

Market sentiment: Unpredictable markets. Forget index. Concentrate on select stocks.

Significant news:

1. Government will create 3 million tonnes of sugar buffer stocks to check fall in prices.
2. Aircel, Spice and Idea may merge to form a new entity. Invest in Idea for medium term. Target- Rs 145.

Positive Stock news:

1. Unitech received nod for establishment of IT SEZs at Greater Noida and Kolkata.
2. Cement companies like ACC and Gujarat Ambuja announced increase in sales.
3. Sterlite ADS will be listen in Mid June.
4. Parsvnath launched Rs 6 billion township.
5. ONGC bought stake in 3 Brazilian blocks.
6. JSW steel posted 36% jump in crude steel production.
7. Fortis appointed new medical team at Escorts heart institute.
8. Bajaj will launch LPG bike soon.

Negative stock news:

1. Bombay high court rejected Reliance Energy plea on MTHL.

Best Indian stocks for day traders:

1. Mount Everest: Open offer to buy a further 20% stake by Tata Tea at Rs 140.
2. Idea Cellular:
3. Sterlite:
4. GAIL: (with risk).
5. JSW Steel:
6. MTNL:
7. Shree Renuka sugars.
8. NIIT Tech: (Closely watch rupee value).

Stocks to watch out:

1. ONGC.
2. Parsvnath developers.
3. Fortis healthcare.

Please share your stock views.

Indian stocks will lose in the early session

Investors will book profits in the initial trading. Markets may recover partially in the mid and late session. Day traders may play with Idea, IFCI, RNRL and RPL in the afternoon session. Long term investors may enter into good Pharma stocks after correction. Book profits in India Infoline and Cipla.

Market sentiment: Bearish and Volatile.

Negative Triggers:

1. Expiry of derivative contracts.
2. Govermnet’s target for inflation is 4-4.5%.
3. Investors will book profits in the early session.
4. Asian markets are in the negative zone. Bad sentiment in the Chinese markets.
5. Rupee appreciation against dollar.
6. Prime minister is against gas based power projects.

Positive Triggers:

1. Indian ADRs gained significantly despite marginal gains in the US Stocks.
2. Prime Minister wants to spend Rs 25,000 crore in Agricultural sector.
3. National Stock Exchange (NSE) will introduce Futures and Options trading in CNX Nifty Junior and CNX 100 from June 1.
4. Vodafone is planning to invest Rs 8,000 crore in India.

New Listings:

Mc Dowel Holding, MIC Electronics and Insecticides India.

Stock picks for long term investors:

1. Hotel Leela and Indian hotels: These stocks will capitalize boom in the tourism sector in the coming years.
2. Tata Tele services: Good and safe bet for long term investors.
3. EID Parry: Ideal stock for high risk taking long term investors. It is near 1 year low.
4. Patni computers is the best stock if rupee weakens against dollar.

Hot stock recommendations for Day trading:

Advice: Be cautious in the early trade. Markets may lose in the early session due to bad sentiment in the Asian markets.

1. Ranbaxy:
CMP: 391
Target: 395
Stop Loss: 386
It won case against Pfizer.

2. NTPC:
CMP: 160.7
Target: 162
Stop Loss: 158.5
NTPC will take over700 MW power plant in Assam.

3. Zee:
CMP: 312.8
Target: 317.5
Stop loss: 308

4. Ansal Properties and Gayatri projects.

5. Aurobindo Pharma:
CMP: 695.7
Target: 698
Stop loss: 693
US FDA approval.

6. Bharti Airtel: (With Risk)

Stocks to watch out:

L & T, BHEL, Britannia, Tata Power, Tata Chemicals, Crompton greeves and Welspun.
Be cautious in the early session and enter into good stocks to book profits after initial correction.

Share your opinion on my stock recommendations.

Hot stock picks for Indian day traders

Stock markets will continue to trade volatile with action is around some select scripts. RNRL, Idea, RPL and Ashok Leyland will continue to see huge volumes. If rupee depreciates against dollar, IT stocks will hog limelight. Asian markets are continuing their positive momentum.

Sector of the Day: Power.

Significant News:

1. Power sector stocks may gain due to PM remarks on investments.
2. Monsoons touched Kerala shores.
3. I don’t believe in the growth story of Raj TV. Book profits.

My stock picks for Long term investors:

1. Wyeth Labs: Its earnings will rise once its research facility yields results.
2. GMR Infra: It will cross Rs 1000 by the time of Hyderabad international airport inauguration.
3. Idea cellular: Believe in this stock. Forget short term fluctuations.
4. Tata Power: It is well placed to utilise the “power boom”. Power sector will see a lot of action in the coming years.
5. Tata Motors: One lakh car will permanently change the dynamics of Indian car industry.

Enter into these stocks after correction in the stock markets which will happen shortly.

Hot Stock picks for Indian day traders:

1. Jaiprakash Hydra power: Good long term bet.
CMP: 34.15
Target: 36.8
Stop loss: 30
Prime minister comments on hydro power.

2. Ashok Leyland:
CMP: 37.4
Target: 38 and 38.6
Stop Loss: 36.2
Announcement on new innovative trucks.

3. Hero Honda: (If it breaks 690)
CMP: 687
Target: 695
Stop Loss: 672
It plans to build Rs 12,500-13,000 motor cycle.

4. Ranbaxy:
CMP: 383
Target: 387.5
Stop Loss: 378
Acquisition of dermatology brands.

5. Deccan Aviation:
CMP: 136.6
Target: 140.5
Stop Loss: 132
SBI may give extension on loans.

6. Idea cellular:
CMP: 126.2
Target: 128. 3 and 130
Stop loss: 124

7. Larsen and Toubro:
CMP: 1785
Target: 1816
Stop Loss: 1744
L&T will announce good results.

8. Reliance Communications
9. Reliance Energy
10. Tata power, Torrent power and NTPC

Stocks to watch out for:

GMR Infra, Unitech, Dr Reddys and Thermax.

Stay away from following stocks:

1. Reliance Industries: Jamnagar SEZ violation of norms.
2. Raj TV: Mad rise in this stock does not justify its inherent strength.
3. Stay away from Adani enterprises.

Please share your views and recommendations on Indian stock markets.

Indian Markets – Trade with caution

Markets are waiting for new triggers. BSE Sensex and NSE Nifty will continue their uncertainty. Concentrate on few stocks instead of index movements. Rupee appreciation is the only negative trigger which may spoil current Bull Run.

Market Trend: Volatile/ Bullish.

Significant news:

1. Crude price is returning to normal. You may get marginal gains in HPCL and BPCL.
2. US markets are stagnated and waiting for triggers like Indian markets.
3. Asian markets are in mixed momentum.
4. Rupee may touch 38.5 against dollar –UBS.

Stock picks for short and medium term investors:

1. SAIL: it may cross 160 in the short term.
2. Aftek: It will cross 80 in the short term.
3. JSW steel: Thiss tock may continue its bull run along with SAIL.

Stock Recommendation for Long Term investors:

1. Larsen and Toubro: It is consolidating its core business while entering future growth sectors like Shipping. Its P/E is also at attractive level. This is my stock pick for investors with 2-3 year horizon.

Stock recommendations for Day traders:

1. Bata: Reliance retail may tie up with Bata.
CMP: 169.9
Target: 174 and 177.5
Stop Loss: 167

2. NTPC:
CMP: 154.6
Target: 156.5 and 158.7
Stop Loss: 152.8
NTPC is to sell electricity to CESC.

3. Torrent Power: It signed a MOU with Gujarat power to set up 1000 MW power plant.
CMP: 75.7
Target: 78 and 80
Stop loss: 71.5

4. Tata Tea: (caution: Investors may book profits)
CMP: 878
Target: 897 and 916
Stop loss: 844

5. HPCL and BPCL.

Stock to watch out:

Reliance Industries, Bharat Forge, Reliance Communications, Tata tea, Ceat, RNRL, Tata Tele and Sun TV.

Dangerous stocks of the day:

1. Stay away from Dabur India as its flagship brand Glucose-D is in packaging troubles. Supreme Court restrained Dabur from using Glucose-D.

2. Stay away from Punjab tractors as this company reported 39% decline in profits.

3. Indian government scrapped 98% of IEMs obtained by sugar companies. Stay away from Bajaj Hindustan and Balrampur chini. Though this news may not impact them much, it spoils the positive sentiment.

4. Fortis and Trehan row may not end in the near term. You may buy Fortis health care stock at attractive price within 3-4 days.

5. Stay away from Alembic Pharma (poor results).

Results today:

1. ICRA
2. Divi Labs
3. Torrent Pharma.
4. NIIT Tech.

Please share your views on Indian stocks.

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.