Google trends on Stock Markets

Google trends are revealing interesting statistics about rise in stock Market phenomenon among Indians. See the graph below how searches on stock markets are rising in India. India is the number one country for stock market related queries in 2007. Top 3 slots are occupied by Indian cities for searches on stock markets. Gujaratis are the toppers for stock market related queries in 2007.
Google trends on Stock Markets in 2007:

Top 5 countries in the stock market related searches in 2007 on Google:

1. India.
2. Singapore.
3. Malaysia.
4. United States.
5. Australia.

Top 5 cities in stock market related searches in 2007 on Google:

1. Mumbai
2. Delhi
3. Chennai
4. Singapore.
5. New York.

Top states in stock market related searches in 2007:

1. Gujarat.
2. Madhya Pradesh.
3. Maharashtra.
4. West Bengal.
5. Delhi.
6. Andhra Pradesh.
7. Tamilnadu.
8. Karnataka.
9. Kerala

Reliance power effect:

See the graph below to know about the rise in Reliance power related searches in the last one month.

These trends are revealing the “Stock Market phenomenon” that is sweeping across India. Indians are searching more to know about the stock markets. Southern states may overcome western states within 2-3 years due to rise in income levels and increase in awareness on stock markets.

Note: According to latest grey market reports, Reliance Power may list in the Rs 750-800 range. It may vary according the market sentiment on the listing date.

Please share your opinion on this steep rise in awareness among Indians on Stock Markets.

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.

Why Indian stocks will crash in October?

Most of the investors and analysts are unable to cope with this unbelievable rise in Indian stocks especially capital goods and power stocks. Foreign investors and big financial institutions invested heavily in these stocks when markets were crashed in August but many retail investors missed to capitalize this rally. FIIs discounted all the negative news and poured money into Indian stocks after Fed rate cut in September. But will this euphoria last forever?

Why Indian stock markets will crash in October?

1. Political Instability: This is the single most major reason for stock market crash. Investors especially FIIs never like political instability and they will book profits and go to another country. Even though political turmoil will have no significant impact on the growth of companies, stock markets always negatively respond to political instability.

2. RBI decision: Don’t expect positive news from RBI. Don’t be fooled by inflation data which is released on every Friday. You will know real inflation in the routine life. No government will allow raising inflation by cutting interest rate cut just before elections. RBI will definitely raise CRR and is major negative news for markets.

3. Negative news: When markets rose too high within a short span, single negative news will create havoc in stock markets. Markets discounted negative news like Crude rise, rupee appreciation, inflation concerns in U.S after fed rate cut and slow down in economic growth etc. How long investors will discount all these negative news?

4. Government policies: If mid-term polls are inevitable, Government prefers people over companies. Popular policies will slow down momentum which will negatively impact investors sentiment towards India.

5. Foreign Investors (FIIs): FIIs were major culprits for August crash and are going to be responsible for October crash. Just see and learn how they are cashing money from every rise?

6. Economic growth: There is a slow down in economic growth if you see the data but markets already discounted 2008-09 earnings especially for high growth sectors like power and capital goods.

7. Profit booking: Shrewd investor always book profits just before every crash whether it is in 2000 or 2006. Greedy investors always lose money in every crash. Decide yourself whether you are greedy or not?

8. US markets: US fed rate cut created euphoria among investors but this will actually show negative impact on the long term on credit crisis. It treated chronic disease in acute manner. Instead of curing root causes of credit concerns, it went in superficial manner which will cause inflation pressure in America and severely impact economy.

Stock markets will continue to surprise us as they no longer represent a country’s economy. Markets are in the grip of few investors who can manipulate stock prices according to their will. Why Reliance rose above 2,400, can anyone explain me? Can anyone explain me the changes in Indian economy from August to September?

Closely watch Q2 results and movements of political parties and take a quick decision. This exceptional rise is no way responsible to economy and next crash will not be due to economy. It is better for retail investors to book profits and watch the unfolding scenes to enter the next rally. But I still believe in long term Indian story but not Foreign investors.

Please share your opinion on my views.

Volatile Stock Markets due to extreme uncertainty

I am closely monitoring Indian stock market volatile movements but not giving any guidance due to extreme uncertainty. I have not seen this range of uncertainty for the last 3-4 years. That’s why I am not posting in the last 4-5 sessions. I will watch for another 3-4 sessions from side lines to get clear picture on Indian share markets.

Global Economic crisis (Sub prime credit crisis):

Don’t be tempted by short Bull Run in US stock markets. This subprime crisis is the most severe one in the last 16 years. We are just watching the tip of ice berg. We will see real effects in the coming weeks/months. No one is giving clear guidance on the magnitude of this subprime crisis. Rate cut by fed reserve may not be sufficient to cool down this crisis. Dow will touch 11,500-12,000 in the coming months.

Local Political crisis:

Communist parties are doing their best to dampen the spirits of bulls. Before this political uncertainty, India is the last option for withdrawal of money by FIIs due to the strong fundamentals. But India is now the first choice for FIIs to withdraw money in case of crisis due to political uncertainty. Uncertainty is always more dangerous than real thing. Communists may not withdraw support to UPA Government but they will cause enough damage to the investors by their comments.

Indian Stock Market guide:

1. Sit on cash and invest money whenever BSE Sensex falls below 14,000.

2. Invest money in high growth stocks like Punj Lloyd, Crompton Greeves, Bharti Airtel, BHEL, L&T, PFC, SBI, Welspun Gujarat, Praj Industries etc. They will lead the next rally.

3. Foreign investors will invest in these stocks after the termination of credit concerns.

4. Don’t expect exceptionable returns in 2007. Invest up to 2009-10 in growth stocks for exceptional returns.

5. Banking and Finance, Capital Goods, Shipping, Power and Infrastructure stocks will lead future rallies. Telecom story will continue for some more time.

6. Speculators will rarely beat long term investors in the returns/earnings in Stock markets.

7. Pharma is the dark horse.

Starcom-Mediavest survey on Online Trading platforms in India:

1. Reliance Money is the most secured and cost effective platform while Motilal Oswal is the best research driven platform. ICICI Direct is the least cost effective platform.

2. 5 Paisa is the second best cost effective trading platform while ICICI Direct is the second best secured platform.

Please share your experience on online trading platforms in India.

Black days will continue for Global stock markets

Global markets are continuing their correction due to credit crisis concerns. US and Asian markets are falling with 2-6% correction in the last 2 days. Indian share markets will trade according to global trends for some more time due to FII selling. No one is giving exact guidance over the severity of this crisis. Subprime crisis added fuel to the already overvalued global markets. Watch from sidelines how this crisis will influence world markets and learn lessons for future investments.

Global Stock markets:

Courtesy: Bloomberg.

Global markets fell on second consecutive day. Dow Jones lost 167 points after the volatility in the initial trading session. Asian Stocks are near their 3-month low and Indian markets will follow their global peers. Uncertainty over the magnitude of subprime crisis is the major factor behind this melt down. Will more pain is on the cards? Wait for some more time.

Market Movements:

1. BSE Sensex: Sensex may lose 400-500 points in the initial session.
CMP: 15016.
Target: 14850 and lower.

2. NSE Nifty: Nifty may lose 150-200 points in the initial session.
CMP: 4375.
Target: 4310 and lower.

Positive Stock Market News:

1. DLF will buy DCM Shriram land for 1,600 crore.
2. Punj Lloyd sold 11% stake to private investors for 814 crore.
3. Bharti Airtel will launch 2G and 3G services in Sri Lanka.
4. Demerger of ICI India is on the cards due to acquisition of ICI by Akzo.
5. 2009 is the year of consolidation in banking sector.
6. Vedanta sold Sterlite gold for 320 crore.
7. Idea Cellular is the front runner for ICC sponsorship.
8. Bharti Airtel hiked local call rates along with SMS charges.

Negative Stock Market News:

1. Clear slowdown in consumer spending in US due to credit concerns – Wal-Mart.
2. Govt. Allowed cement imports to curb rising cement prices.
3. Expansion plans of India Inc will slow down – Morgan Stanley.
4. Government may move court on Reliance Gas price – Hindustan Times.
5. United Spirits debt rose due to W&M buy.
6. Tata Steel’s Titanium project is in trouble due to land acquisition problems.
7. Global markets will correct by 30-40% - Mark Faber.

Stock Market Analysis:

1. IPTV is set to boom. IOL Broadband is the biggest beneficiary.
2. Foreign Investors are real culprits behind this abnormal rise and fall of Indian Stocks.
3. According to my view, BSE Sensex will touch 14,000 mark in August and Share markets will bounce back after this subprime market crisis is over.
4. Enter into growth stocks like Punj Lloyd, Moser Baer, Bharti Airtel, Reliance Companies, L&T, BHEL, and ABB after the correction. Believe in the long term growth story of India.
5. Short term investors may suffer heavy losses in the coming days. Don’t take highly leveraged positions in these volatile times.
6. Mic Electronics is the best stock for long term investors.
7. Don’t do bottom fishing in sugar sector. More pain will come in the coming quarters.
8. Bharat Forge, Bajaj Hindustan, Tata Motors, Mastek, Tata Tea, TCS, Cipla are some contra buys for long term investors with 18-24 month horizon.
9. Sanjay Dutt arrest may spell doom for some distribution companies in the short term.
10. Fortis Healthcare is my favourite stock for long term investment. I have holding in this stock.
11. Takeover targets like Spice Tele, Spicejet may bring value to investors in the coming quarters.
12. Tata Tele and Essar Oil are my favourite turn around stories. I am also betting big on Ispat for long term.
13. Conservative investors should stay away from share markets for some more time.

Best Stocks for Day Traders:

1. DCM Shriram Consolidated.
CMP: 87.
Target: 90.

2. 90% of Index stocks will fall due to global melt down. Risk takers may bet on IT stocks to recover if rupee depreciates against dollar.

Stocks in NSE F&O ban: Nagarjuna Fertilisers and Omaxe.

Stocks rebound temporarily

Indian stocks will see sharp temporary rebound on the account of strong global cues. Sustainability of this rise will depend on future course of global markets.

Market movements: Dow Jones gained 286 points after initial volatility and Asian markets are rising from global cues. Indian markets will follow their global peers. Global markets are in a precarious situation. It is not an ideal time for retail investors to take short positions in markets. Stay away from futures and options. BSE Sensex may settle around 14,300-14,500 and Nifty at 4,100-4,200 in the near term. Take positions in over corrected stocks.

1. BSE Sensex:
CMP: 14903.
Target: 15060.

2. NSE Nifty:
CMP: 4339.
Target: 4403.

Positive Stock News:

1. Hindustan Unilever will announce winners of bids for real estate projects in Bengaluru and Mumbai on next Tuesday.
2. Wal-Mart and Bharti enterprises announced 50-50 joint venture for retail.
3. Bharti Airtel received LOI for DTH service and will launch its DTH services by March 2008.
4. Hindalco and Tata Power will jointly develop a coal block in Jharkhand.
5. Government should approve gas price before marketing – Cabinet secretary.
6. GVK Power announced financial closure for its Uttarakhand project.
7. Strides Arcolab acquired Italian company.

Negative Stock News:

1. Novartis lost Glivec case and will not appeal.
2. Surge in International crude oil price is a real concern.
3. Volumes are declining gradually in the last three days.
4. Sales of Ashok Leyland were down by 19% in July.
5. DCM Shriram announced massive loss in its Q1 results.

My Stock views:

1. FIIs are selling in a big way while Domestic institutions are using this opportunity to accumulate. Mutual funds are waiting in the sidelines.
2. Don’t underestimate the impact of US Subprime market. Global markets are closely interlinked in these days. FIIs will spoil in Indian party in the coming days but long term story is intact. Accumulate good stocks on every dip.
3. Sugar stocks will temporarily rise in this week due to disruption of supply (heavy rains).
4. Indian Real estate stocks are the most expensive ones. Accumulate DLF in the 500-530 range for long term investment.
5. Oil refining companies will announce surprise results in the next quarter due to earning s from oil bonds. Accumulate these companies.
6. I think stocks like Suzlon and Sterlite are over corrected due to weak earnings but its long term prospects are good.
7. Acquisition of Infocrossing by Wipro will benefit it in the next financial year.
8. If rupee stabilizes due to weak markets and RBI measures, IT stocks will see some contra buying.
9. Accumulate Sesa Goa and Mount Everest as promoters will announce open offers in the coming days.

Best Stocks for Day Traders:

1. Bharti Airtel: Wal-Mart, DTH, Google tie-up news.
CMP: 866.
Target: 878 and 889.

2. IFCI: If it breaks 64 (strong resistance).
CMP: 63.7
Target: 65.7 and 67.6

3. Reliance Communications.
CMP: 531.5
Target: 538 and 546.

4. GVK Power.
5. DLF, HDIL and GMR Infra may bounce back.
6. Hindustan Unilever.

Please share your views on my stock views.

Black Friday for Indian share markets

Black Friday arrived for stock market investors. I gave red signals in the last column about unliquidated derivatives, unsustainable valuations, drop in earnings and euphoria among new investors. All these are clear signals for a heavy correction. FIIs are the most dangerous people for the Indian markets. Unlike mutual funds, they don’t sit on their investments in difficult times. They just sell their shares and go to another country for better options. But this correction is good for fresh investments and real investors.
Courtesy: NASDAQ.

Index Movements:


1. NSE Nifty:
CMP: 4619.
Target: 4560 and lower. Nifty will lose around 80 points and follow their global markets.

2. BSE Sensex:
CMP: 15776.
Target: 15530 and lower. Today we will see bloodbath in the market due to heavy selling from panic investors.


Advice for Investors:



This is the day everyone is waiting for. We will get wonderful opportunities for entering into good stocks. This selling is mainly due to withdrawal of funds by FIIs and new investors who invested heavily in the recent days by giving a damn to the valuations. Investors who invested in value stocks should not sell their holdings. If you read the balance sheets of Real estate companies like DLF and Unitech, you will know the underlying seriousness and the danger in their accounting practises. SEBI should monitor these companies and the value of their land banks. I can’t understand the rationality behind investments in high valued stocks like DLF, TV 18, Divis Labs, ABB, GMR Infra, Kotak Mahindra Bank etc. Even though these are good stocks, valuations are unreasonable and unsustainable.

Global markets:


Heavy selling was seen in all the global markets with 2-5% loss in various indices. Recent rise in the global markets is due to high liquidity and entering of new investors who lack basic knowledge about stock markets.


Stock of the day: Shree Renuka Sugars with high risk.

Sector of the day:

1. Sugar Companies – Exports relief. Be careful before taking exposure as market sentiment may spoil the moment.

2. Oil Refining Companies - Declining crude prices, Rupee appreciation, Petrol-diesel price hike rumours make BPCL and HPCL as hot stocks but with risk.


Significant views:


1. If Inflation data is lower than expected, late buying will be seen in Banking stocks and vice versa.


Positive stock news:


1. Subex Azure announced wonderful results. 381% rise in net profit.
2. Teledata posted wonderful results.
3. ABB announced wonderful results with 51% rise in net profit. Use today’s correction to take fresh exposure.
4. 500% rise in Q3 net profit of MRF while Dena Bank net profit rose by 201%.
5. Tata Motors is the front runner for Rover and Jaguar.
6. Maruti announced better than expected results with 35% surge in net profit.
7. Bharti Airtel Q1 net profit rose by 100% while Tata Power announced 51% rise in net profit.
8. Ranbaxy regained number one slot after the recent quarterly results.


Negative stock news:


1. Indian companies are announcing worst results among the last 5 quarters. Rupee appreciation saved some companies by increasing other income.
2. Punjab Tractors posted decline in net profit by 81%.
3. Bisleri selling is not true.


Best stocks for Day Traders:


1. Sell Reliance.
CMP: 1941.
Target: 1892.

2. Sell Infosys, Wipro TCS and Satyam.
3. Sell DLF and Unitech.
4. Sell Divis Labs.
5. Sell GMR Infra.
6. Sell SBI.
7. Sell HDIL.
8. Buy HPCL and BPCL with risk.


Please share your views on Indian stocks and my analysis.

Heavy selling in the initial session

Indian stocks will see heavy selling in the initial session due to fall down in global markets. If late buying is not seen in the late session, today will become black Wednesday. Capital goods will see heavy selling due to vertical rise in the recent days. This correction is good for markets and real investors who are waiting in the sidelines for fresh investments. New inexperienced investors should stay away from markets until RBI announced credit policy. Weakness in global markets, rising rupee, drop in earnings, derivative expiry, crude price will make the stock markets a dangerous territory in the coming days. I am always against CNBC analysts who change their words according to market moments. Long term investors need not worry about these short term fluctuations. Invest in good stocks with strong growth prospects.

Market sentiment: Bears will finally dominate. Indian markets will follow their global peers. Late buying may be seen in some stocks.

Global cues: All markets suffered heavy losses. Indian ADRs are in red with Sterlite lost 5%.

Stocks of the day:

Allied Digital - Will list around Rs 250 and may touch Rs 320. Bear market may spoil sentiment.

1. PNB and Reliance Capital– Results. With risk.
2. Reliance Energy – Lanco loss, Reliance gain.
3. JSW Steel – Wonderful results. With risk.

Rumours of the day:

1. NDTV may sell 26% stake to NBC.

Positive News:

1. BILT – Stock split from Rs 10 to Rs 2. Buyback of 40% equity after split at Rs 25.
2. RIL will setup 4,000 MW power plants for 10,000 crore.
3. Aditya Birla will raise stake in Hindalco to 40% from 31.4%.

Negative News:

1. Lanco bid for Sasan project is invalid. Investors are thinking that the project will be awarded to Reliance Energy. Government is yet to take the decision.
2. Cement companies under MRTPC lens.
3. Textile exports will fall short by 36% due to rupee appreciation in Q1.
4. Hero Honda posted unimpressive results. Future is bleak for this company. Management lacks the vision.
5. Novartis and Dr Reddys are in legal battle over Lotrel patent.

Results:

1. Hindustan Zinc announced 36% rise in net profit.
2. Britannia net profit increased by 19%.
3. Kotak Mahindra bank net profit rose by 99%.
4. Idea announced 540% rise in net profits.

Stock advice:

1. Accumulate Reliance Communications on declines. It will rebound at anytime.
2. Buy Hindustan Lever for short term gains. 15-20% returns within one week.
3. Accumulate Praj Industries in 150-180 range for long term investment. Praj is the back bone for Bio-Fuel industry equipment and Technologies.
4. Investors will book profits in BHEL, L&T, GMR Infra and DLF at any time. Keep strict trailing stop losses.
5. Long term investors should start accumulating fundamentally good stocks like Bharat Forge.
6. Companies sitting on land banks may surprise with their results in the coming quarters due to selling of land banks. Ex. VST Tillers, DCM Shriram, Atlas Cycles, Zandu Pharma, RPG Cables. RPG cables is the best stock for any patient investor. It will give 300% returns in 2 years. Low valuations, high growth, turnaround story, land bank make this a safe stock.
7. IFCI may not sell stake in the coming days. It is trying to create good business model to unlock its real value. It is a bad news for short term investors and very good news for real long term investors. It will give 200% returns within 12-15 months.
8. Raymond and Cipla are contrarian buys with limited downside but results are disappointing.

Stocks for day traders:

1. Sell ACC.
2. Sell BHEL.
3. Sell L&T.
4. Sell Lanco.
5. Sell Hero Honda.
6. Buy these stocks if sharp fall is seen – Reliance Communications, Reliance Energy and PNB.

Please share your views on Indian stocks.

Welcome to volatile week

With derivative expiry and RBI credit policy are around the corner, Indian share markets will trade in extreme volatility in the coming sessions. Indian stocks are in “unclear” zone with Mutual funds and big domestic investors are waiting for correction, NRIs and FIIs are pumping money. My advice- does not take long positions and book profits immediately in high growth stocks. Correction is eminent but when will it happen?

Global markets: US markets suffered heavy losses on Friday due to poor results by Google. Emerging markets suffered heavy losses along with Japan market. China is the only exception.

Stocks of the day:

1. Hindustan Lever: Future rise will depend on offer price. Dividend and Buyback offer make this stock of the week. My Target is Rs 250-280. HUL board will officially announce offer price on July 29 board meeting.

2. Dr Reddys – Results.

Rumours of the day:

1. NTPC will announce Bonus shares and good preferential allotment to existing investors in its FPO.

2. Chevron may buy stake in Petronet LNG.

Significant events:

1. Derivative expiry on July 27. Expect volatile trading in between.

2. Watch out for RBI’s credit policy on July 31st. What will happen to Interest rates? May be no change.

Significant News:

1. Current interest rates are at reasonable value – Finance Minister.

2. We are waiting for softening of interest rates – ICICI Bank.

3. Crude will cross $ 75 and may touch $ 90– Analysts.

Positive Stock news:

1. Nitin fire net profit rose by 109%.
2. Lead prices are rising. Watch out for Hindustan Zinc.
3. Karur Vysya bank net profit rose by 25% while Indian bank posted 29% rise in net profit. Bank stocks already factored these good results.
4. Mahindra and Mahindra will acquire Lokesh machines.
5. FICCI recommended 10 year tax holiday to health care infrastructure builders and soft loans.
6. UB Holdings is planning to sell stake in Deccan Aviation.

Negative Stock News:

1. ADRs of Indian IT stocks suffered heavy losses along with MTNL.
2. McKinsey sued Reliance and Reliance Communications over dues.
3. Increase in gross NPAs of ICICI Bank is worrying news.
4. UTI Bank priced its GDT at 1.7% discount.
5. NDTV and Arvind Mills are in F&O ban.
6. 50% of the penny and loss making companies are trading near all time highs. Stay away from such stocks.

Stock advice:

1. Ispat industries will announce results on July 24. Will it surprise CNBC analysts?
2. Zee News fundamentals does not justify the steep rise.
3. Voltas is looking very good and Meghamani Organics is a safe one for long term investors.
4. Raymond is a contrarian bet for long term investors.
5. Tayo Rolls is a safe bet for long term investors. Corus supply will propel this stock.
6. Dr Reddys is ready for sound results despite rupee appreciation.
7. Don’t take fresh long positions in Real estate stocks. You will get better price later.
8. Adlabs may move upwards at any time. Good results will be a trigger.
9. Business Standard published very good article on Gujarat NRE Coke. Must read.
10. If RBI will not change interest rates, Bank and real estate stocks will rule the markets along with Maruti. Crude oil price is a real concern.

IPO views:

1. Central Bank of India will list around Rs 130-140. 25-40% gains on the listing day itself. Invest in this IPO.
2. Omaxe may list with 40% gains. Good return if you will get allotment.
3. I don’t have positive opinion on IVR Prime. Stay away from this IPO.

Hot stocks for day traders and investors:

1. Hindustan Zinc – Rise in lead prices.
2. Hindustan Lever – Buyback offer.
3. Nitin Fire – wonderful results.
4. Voltas – Positive momentum on the back of good results.
5. Sell UTI Bank – GDR low pricing.
6. Dr Reddys – will post wonderful results.
7. ICICI Bank – good results.
8. Deccan Aviation – Stake sale and open offer.
9. Prajay Engineers syndicate – Medium term stock.
10. EID Parry – Technically strong.
11. Sun TV – Bonus, Dividend and Stock split.

Please share your views on Indian Stock markets and my stock recommendations.

Profit booking in the late session

Indian share markets rise in the early session due to strong cues from global markets. Profit booking will be seen in the late session due to rise in inflation and unsustainable valuations. FIIs are buying in the Indian stocks while Retail investors and domestic institutions are selling for the last 2 days. Just imagine the plight of Indian markets if FIIs withdraw money from Indian markets as in May, 2006. I will not recommend fresh investments in stocks like Reliance, SBI, ICICI, GMR Infra, L&T etc. Markets may rise in the short term but single negative news is enough to spoil the market sentiment.

Global cues: US markets rose on strong earnings. Crude price is stable.

Stock of the day: Satyam Computers.

Rumour of the week:

1. Reliance will buy stake in Cipla. Talks are going on. Watch out for news.

Significant news:

1. ABN Amro downgraded Reliance with a target of Rs 1,300. My target for Reliance is 1,500. I can’t imagine the market movement when Reliance is really in such a precarious condition.

2. Finance minister cautioned the investors about risks involved in stock markets.

3. Biggest risk in the Indian stock market is valuations. High valued stocks are rising further making the current markets extremely vulnerable to correction.

Positive News:

1. Jindal steel bagged $ 2.1 billion dollar contract from Bolivian government.

2. Reliance Communications sold 5% stake in tower business for Rs 270 billion rupee.

3. Renuka sugars board meet on July 26 to mull GDR issue.

4. L&T posted 130% rise in net profit. All the good news are factored in this stock.

5. Ashok Leyland posted 28% increase in net profit.

6. Ranbaxy announced wonderful results with 118% increase in net profit.

Negative News:

1. ACC reported 15% fall in net profit in Q2. Decrease in other income is the major reason.

2. Wipro will continue to lose its value for another 30-40 days. If rupee continues to appreciate, mid-sized IT companies will be worst hit.

3. Spice Communications valuations are unsustainable. It got premium listing just on account of positive sentiment in the telecom sector. Book profits.

Stock advice:

1. Invest in Omaxe IPO. Attractive pricing and low valuations are the major reasons.

2. Closely watch Tata Tele and Idea as they crossed resistance levels.

3. Long term investors should not invest in stocks like Divis, Reliance and other unrealistically valued stocks. Search for sound stocks at low valuations or keep your money in banks for some more time.

4. Hindustan Dorr-Olive is another good stock with strong growth prospects.

5. Consolidation in IFCI and IDBI is good for real investors. Accumulate on each decline.

6. Orchid Chemicals and Welspun Gujarat announced good results. Good growth.

7. Stay away from Zee News. Don’t take fresh exposure in this stock.

Safe stocks in this Bull Run: (Downside is limited)

1. Dr Reddys Labs and Ranbaxy.
2. IFCI and IDBI.
3. DCM Shriram is a contrarian buy. Land sale news will come at any time.

Best stocks for Day Traders and Investors:

1. Satyam Computers.
2. Tech Mahindra.
3. Reliance may continue to gain.
4. Reliance Energy may bounce back on orders.
5. Idea may continue its march if markets are strong.

Please share your stock recommendations here.

Indian share Markets are in bearish phase

Bears will dominate Indian stock markets in the coming sessions due to weak global markets and profit booking. There will be a clear slow down in the growth of most sectors and fail to justify their very high valuations. This is a very opportunistic period for new investors who want to enter into good stocks. High growth stocks like R-Com, Reliance Energy, PFC, IFCI, IDBI, Praj Industries, ABB, L&T, JP Associates Etc. will be available at good valuations after this moderate correction. This is also a transition period in some sectors like IT and Telecom where TCS is looking strong over Infosys and R-Com over Bharti Airtel. Pharma is a safe bet in these volatile times.

Global cues: Global markets are looking weak with Asian Markets are down due to profit booking.

1. Dow Zones touch 14,000 during intraday and NASDAQ was at 6 year high. Profit booking was seen in the late session like Indian Markets.

New Listing – Sun Pharma advanced research.

Stock of the day: DLF. It will post wonderful results by tomorrow.

Significant news and views:

1. HSBC downgraded Indian equities due to increased leveraged positions and high valuations. It is bearish on Indian stocks.

2. Sensex target by the end of 2007 is 13,500-14,200 – HSBC Securities. It is a real concern.

3. Rupee target by the end of March, 2009 is 37.8 against Dollar – Credit Suisse.

4. IIP Numbers were once again down indicating slow down in economy with Consumer Durables and Auto is the worst performer while Capital goods is the best performer.

5. 10% growth is possible in next financial year – Finance Minister.

6. There will be some more CRR hikes – UBS.

Positive stock news:

1. Net profit of Zee Entertainment was increased by 50%.
2. KPIT Cummins posted 22% jump in net profits despite strong rupee and rising salaries.
3. Gateway Distriparks announced good results.
4. R-COM announced massive expansion plans. This stock should be in everyone’s portfolio along with Reliance Capital and Reliance Energy. Accumulate these gems on dips.
5. ITC Foods launched organic spices in select categories.
6. Tata Motors entered into Saudi Arabian market by launching 3 car models.
7. NDTV posted a net loss of Rs 2 crore Vs net loss of Rs 10 crore in previous quarter.
8. Nectar Life sciences is a very good stock but it was overbought.

Negative news:

1. Tata Tea net profit was decreased by 49%. Buy on dips. Tata Tea will give 20% returns within 1 year.

Stock advice:

1. Value unlocking in tower business by Reliance Communications will yield good results. This stock is a safe bet for any kind of investor.

2. Jubilant Organosys announced wonderful results. Stock is ready for new highs.

3. Biocon will rise ahead of good results.

4. Gateway Distriparks will announce good results.

5. TCS will overcome Infosys in forward PE due to its less dependence on US.

6. L&T is getting orders in a big way. Accumulate this stock on correction.

7. Accumulate Bharti Shipyard if you are a long term investor.

8. Hanung Toys is a safe stock for conservative investors.

9. Mutual funds are accumulating Meghamani Organics.

10. Noida Toll Bridge is another good investment. Good growth story at least for another 2 years. Valuations are the only worry.

11. Bayer Cropscience is a good bet for risk taking medium term investors.

12. Hindalco will be benefitted by Rio Tinto acquisition of Alcan.

Stocks to watch out for:

1. Reliance Industries – Strong Momentum.
2. Dr Reddys and Lupin – Pharma is a good bet.
3. Gujarat Ambuja, ACC and Shree Cement – Cement demand.
4. L&T – may bounce back on strong orders.
5. Reliance Energy.
6. DLF is looking strong ahead of results.
7. Tamilnadu News Print.
8. Alembic.
9. RNRL – may gain by 1-2%.
10. Jubilant Organosys.
11. Gateway Distriparks.
12. Plethico Pharma.

Share your views on Indian stocks and comment on my views.

Are you ready for profit booking?

Indian stock markets will see profit booking in most counters on account of weak global cues. Crude crossed $ 44 while rupee is continuing its appreciation. Markets are neglecting all these negative cues and investors are buying some stocks like Divis Labs, GMR Infra by forgetting valuations. Most of the new investors have not experienced the severity of market bubble in their equity life time. I am unable to understand their investment rationale when they are buying stocks at such a high valuations. RBI may hike interest rate at any time to keep inflation at 4%. Oil marketing firms may hike petrol and diesel prices if crude continues to appreciate. I changed my portfolio to long term stocks and low value stocks.

Global Cues: Negative. Except Dow Jones, most of the global markets are in negative zone.

Stocks of the day:

1. TCS – Sound stock for every portfolio. It surprised everyone with its stunning results and growth guidance. Satyam and TCS may gain around 15-20% within 1-2 months.
2. Reliance Industries – Gas find in Cauvery basin and upward momentum.

Sector of the day: IT Stocks.

Significant news:

1. Indian Entrepreneurs are most optimistic ones in the world.
2. Indian GDP growth will be at 9% while Inflation will be at 4% - Government advisory panel.
3. Everonn Systems fixed issue price at Rs 140.

Positive stock news:

1. TCS consolidated net profit rose by 36%.
2. IG Petro net profit rose by 88%.
3. Zee News made profit for the first time in this quarter. Profit of 6 crore against loss of 54 lakhs.
4. Petronet profit rose by 90%.
5. KS Oils got investments for its expansion plans.
6. TVS Motors started Indonesian operations by launching Neo.
7. Venus Remedies signed 10 year deal with a Chinese form to sell their Antibiotic.
8. Ashok Leyland formed JV with Siemens Automotive.
9. Tata Coffee will launch 100 retail outlets within 5 years.
10. L&T Consortium bagged orders worth Rs 1070 crore.
11. Reliance Communication is continuing its momentum by acquiring foreign firms.
12. JP Associated announced good results. Investors booked profits.
13. Idea launched “My Gang” card at attractive price.

Note: I will write about future stocks and low value stocks within 3-4 days. My stocks like Wire and Wireless, Fortis and Mastek at last got their due. Some will become multi-baggers if you are a long term investor.

Please share your views.

Concentrate on Mid caps in volatile period

Indian markets will trade in volatile zone due to exponential growth in sectors like Construction, Engineering, Telecom and Banking while weak growth in IT, Textiles, Sugar and Auto sectors. Biggest worrying point is high growth sectors are trading at high valuations while low growth sectors will feel the heat for another 2-3 months. So concentrate on Individual stocks of high growth sectors which are trading at attractive valuations. Risk taking investors can try in sound stocks like Reliance Capital, Dr Reddys, Reliance Communications, GMR Infra and Reliance Energy.

Global cues: US markets are in volatile zone due to good earnings and bad subprime market.

Sector of the day: FMCG.

Stock of the day: Reliance Industries – Court verdict on gas.

Significant News:

1. Indian stocks will fall on account of weak earnings and high valuations – HSBC.
2. BSE Sensex will touch 16,000 by the end of this year – Citi group.
3. Bombay high court will give verdict on RIL gas today.
4. Moody assigned stable rating for Indian banks.

Rumour:

1. Entegra may come with rights issue in 2-3 months.

Stock advice:

1. Stock markets will continue to fall as most of the companies will fail to justify their valuations.
2. Prajay Engineers, Dr Reddys, HCL Tech are few stocks that will beat analysts’ expectations. Satyam is the dark horse.
3. NTPC is the safe bet for short and long term investors on account of massive investments and bonus rumours. Target for short term investors is Rs 180.
4. It may be difficult to expect exceptional returns from GMR Infra at this level.
5. KS Oils is counting on its massive gains ahead of stock split.
6. Praj Industries is struggling due to F&O ban ahead of bonus issue.
7. Deccan Aviation will touch 150 within 3-4 trading sessions.
8. Even though UTI Bank will announce good results, valuation are little bit stretched.
9. Dena bank may continue its upward journey.
10. CMC is the one of the rare stocks looking good in IT space on the back of to be announced results. Profit booking will be seen after results.

Positive stock news:

1. Unilever may be taken over by Colgate. Watch out HUL and Colgate.
2. Dabur foods will merge with Dabur India.
3. Megasoft bought Boston Communications for $65 million.
4. Cipla became the number 1 company in domestic retail market overcoming Ranbaxy.
5. Dr Reddys launched Glimmy MP1& MP2 diabetic drugs.
6. Bajaj auto finance will enter into truck business by October, 2007.
7. Chennai petro announced good results.
8. Country club announced wonderful results.
9. Sintex Industries announced 54% rise in net profit.

Negative stock news:

1. Infosys missed its guidance first time in 14 years due to rising rupee. It failed to estimate the rupee impact in March and gave wrong guidance to investors. Infosys lowered its guidance by 5-8%.
2. 14 public sector banks will lose around Rs 930 crore due to RBI guidelines on IFCI investments.
3. Bajaj Auto will announce disappointing results today and stock may lose once again.
4. S&P lowered Tata steel’s credit rating from BB to BBB.
5. iGate solutions posted disappointing results. More such news will come in this quarter.

Best stocks for day traders and investors:

1. HUL and Colgate.
2. Dabur India.
3. Geojit Financial services – with risk.
4. Pyramid Saimira – Good results.
5. Dr Reddys Labs – Momentum is strong.
6. Chennai Petro – Good results.

Results today:

1. Bajaj Auto, UTI Bank, Technocraft India, Reliance Infrastructure, Geojit Financial services and Pyramid Saimira.
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Please share your views and advice on Indian stocks.

Stock markets again into volatile zone

BSE Sensex crossed 15000 mark on Friday and again rising fears of correction. In my opinion, markets move sideways until Wednesday (Infosys results) before falling/rising in a big way. Don’t take long positions in blue chips especially capital goods, IT and Banking. Concentrate on few sound stocks which are trading at low valuations before making major investments from Wednesday onwards. Pharma stocks like Ranbaxy and Dr Reddys are looking attractive in these volatile times.

Risk taking investors may bet on Ispat Industries. Teledata at last moved into BSE Midcap index. Momentum will be around stocks which will post wonderful or surprise results in the coming days like Dr Reddys, Reliance Communications etc. Praj Industries is in a precarious state before bonus date while KS Oils may give good returns in the medium term due to stock split. Major factor saving the markets from fall is liquidity in the markets.

Significant News: Asian markets are in buoyant mood. Will Indian markets follow them?

Stock of the day:

1. Roman Tarmat – This stock may list around Rs 225-250 and will cross Rs 300. Book profits around Rs 280-300.
2. Reliance Communications – Qualcomm deal.
3. Closely watch IFCI and PTC – Stake sale. F&O ban in IFCI.
4. MRPL – LOT OF POSITIVE NEWS.

Rumour of the day:

1. Tata may take stake in Praj Industries.
2. Mallya may acquire Spicejet.

Positive stock news:

1. Hindustan Zinc raises zinc prices by Rs 1200 and lead prices by Rs 1000.

2. Gujarat state petroleum discovered oil block.

3. Reliance energy-Sobha consortium is the successful bidder for Rs 6,400 crore business district project in Hyderabad.

4. MTNL will acquire Suntel in Sri Lanka.

5. Reliance Communication and Qualcomm buried their differences and will continue to work in cohesion.

6. Reliance retail will sell Cipla drugs. But outlook for Cipla is bad.

7. UP government will sell all government mills to private bidders. Tremendous boost to UP private sugar mills. More consolidation is on the cards.

8. Bharti Airtel ranked third in the Business week list of top 100 companies in share holder returns.

9. Kamadhaenu Ispat posted 339% increase in net profit.

Negative stock news:

1. Telecom companies will struggle as ARPU are at Rs 200 mark.

Negative triggers:

1. Inflation rise will spoil party. Interest rate hike will haunt markets again.

Stock advice:

1. Dr Reddys and Ranbaxy will surprise analysts with their fantastic results. These are the safe stocks in volatile markets.

2. Bet on Biocon. This may appreciate another 10% in this month.

3. Stay away from Cipla. Invest in this stock at Rs 185-190 level.

4. Reliance Energy will post wonderful results compared to Tata Power.

5. Capital goods stocks are poised for minor correction due to extreme rise in the past few sessions.

6. Infosys guidance on Wednesday will trigger a major collapse or rise until then markets will be volatile.

7. Subscribe to Everonn IPO. You will get 100% returns on the listing day itself.

8. Don’t neglect Aurobindo Pharma, Lupin and Ipca Labs. They are sound stocks for medium term investors.

9. Closely follow MRPL, India Foils and Birla power.

Stocks for July :

1. Power trading corporation - safe stock for medium term investors.
Target – 90-95.

2. IFCI-safe stock for long term investors.
Target – 70-75.

3. Ranbaxy – excellent results.
Target – 400-420 (medium term).

4. Reliance Communication – Wonderful results. Buy on dips.
Target – 580.

5. Praj Industries – Bonus. High risk stock.

6. HCL Tech – surprise results.

7. Paper stocks like TNPL and BILT.

Best stocks for day traders:

1. Reliance Communications.
CMP: 550.
Target: 563 and 576.
Stop Loss: 541.

2. Roman Tarmat.
Issue price: Rs 175.
Target: 275-300.

3. Hindustan zinc.
CMP: 716.
Target: 725 and 734.
Stop Loss: 709.

4. GSPL.
CMP: 55.6.
Target: 56.8 and 58.
Stop Loss: 54.

5. Reliance Energy.

6. MTNL.
CMP: 163.4
Target: 167 and 170.
Stop Loss: 160.

7. UP Sugar stocks.

Why markets will fall in the coming sessions?

1. Q1 results of most sectors will disappoint the investors and cannot justify their high PE values.

2. Except capital goods, power and some other stocks, most companies will announce decrease in their earnings.

3. Rise in inflation will have major impact on the interest rate decision. Rise in crude price will lead to rise in petrol and diesel prices by Indian oil marketing companies which will again leads to further rise in inflation.

4. Rupee will continue to rise – Exports will continue to decline.

Please share your views on my stock recommendations and share your views on your favourite stocks.

Action will confine to select stocks

Stock markets successfully sustained yesterday’s melt down and bounce back with the help of FII buying in some stocks. Irrespective of market moments, these stocks will continue to gain today. Inflation will be around 4%. If inflation falls below 4%, banking stocks will rally in the afternoon session. IT stocks will fare badly on account of poor results and Infosys guidance.

Positive triggers:

1. FIIs started buying in select stock. So you have to follow stock specific trading/investing.
2. Tyre industry may surprise analysts with their results even though auto sector is down. Closely watch Ceat and Apollo tyres.

Stock of the day:

IFCI. It will open around 63 and may touch Rs 65-66.

Positive stock news:

1. Mastek ranked among the top 50 global outsourcing firms.
2. Indoco Remedies got approval from Brazilian FDA approval for its Goa plant.
3. Aptech and NIIT are in expansion mood in Vietnam.
4. Wipro consumer care bought Unza.
5. Nestle India is in acquisition mood.
6. Sony tie-up with Balaji Tele for content.
7. Bajaj auto set up 5 strategic units.

Negative stock news:

1. NPAs of ICICI Bank rose to 118% in retail segment. This is a real worry ahead of listing.
2. Bank of England hiked interest rates to 5.75%. ECB unchanged interest rates.

Stock advice:

1. Stay away from IT stocks for another 1 month. Bad results and rising rupee and salaries will cripple this sector in the coming days. Satyam may be the lone winner in Q1. Rolta India is a good long term bet.

2. Book profits partially in textile sectors. Government sops may not save this industry from collapse.

3. Khaitan electrical and Asian electronics announced wonderful results. Closely follow them.

4. Lupin may bounce back today on the acquisition talk.

Stock picks for day traders:

1. IFCI: Results and stake sale.
2. Bajaj Auto-Restructuring.
3. Balaji Tele- Sony ties up.
4. Mastek-World ranking.
5. ICICI Bank FPO may face pressure.
6. L&T may continue to march.

Note: I have 30% of my holdings in IFCI. I bought them at an average price of Rs 52.

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.