Archives : VOLATILE WEEK. MIDCAPS CORRECT - 11/01/08
VOLATILE WEEK. MIDCAPS CORRECT 11/01/2008.
The week gone by can best be described as a very volatile week in which the midcaps corrected substantially. All the momentum stocks like RNRL, RPL, JP Hydro, Nag. Ferti corrected substantially. The midcaps were far outperforming the large caps and this week saw them correct. Large caps like RIL and ICICI took center stage and helped in maintaining the level of the index. Most of the traders lost because of the correction that has set in the mid and small caps.
NANO IS OUT FINALLY.
NANO IS OUT FINALLY.
INFOSYS RESULTS MEETS GUIDANCE.
STOCKS TO WATCH OUT: BOI & PTC.
HOW TO TRADE?
LAST WEEK’S RECOMMENDATIONS:
THIS WEEK’S RECOMMENDATIONS:
The wait was finally over and Tata has again made us proud. Tatas promised what they delivered. Low cost and more space are the main features of the Nano. This will truly be the people’s car. With Jaguar deal on one side and launching the Nano on the other side, the company is positioning itself quite well in different segments of the passenger car segment. Investors watch out for Tata Motors. INFOSYS RESULTS MEETS GUIDANCE.
Infosys kick started the earnings season in a very somber manner. Compared to the kind of euphoria that used to prevail in the past, this time it seemed to more of a non-event. Hardly any enthusiasm was visible amongst the trader fraternity this time around. The results met the guidance and the company is sounding hopeful when it said that it will be able to maintain its margins. Rupee dollar rates have more or less stabilised and the company will be able to absorb 3 to 5 % rupee appreciation. STOCKS TO WATCH OUT: BOI & PTC.
I feel Bank of India 412 is on the verge of an explosive move. The stock is ready to move higher after some side ways movement. The short to medium term target is 465 to 512, and this target is achievable as long it stays above 370. The other stock, which is likely to do well in the short term, is PTC. PTC 156 has moved from a very strong support and is ready to embark on the next leg of rally. The targets are as high as 220 to 255 and that will be achieved as long as the stock stays above 140. SENSEX. Sensex opened the week at 20637, made a high of 21206, low of 20505 and closed the week at 20827. The weekly gain for the Sensex was 141 points. But it was a volatile week, though the range may not suggest that. The last half an hour of the trade on Friday was responsible for the rise in the Sensex, which was mainly due to short covering. The trend line support for the Sensex exists at 20659-19526-19255. If the Sensex continues correction then the correction levels are placed at 20320-20046-19772. The 50% and 61.8% correction levels are coinciding with the 30 DMA and 50 DMA respectively. So the levels of 20046 which is also the two week low will be the first major support in a correction. The resistance for the Sensex is at 20961-21206-21494. Support is at 20659-20505-20046. NIFTY. Nifty opened the week at 6271, made a high of 6357, low of 6112 and closed the week at 6200. The weekly loss for the Nifty was 74 points. The trend line resistance is at 6232-6302 and the trend line support is at 5914-5885. The correction levels are placed at 6096-6016-5936. The 6016 level and 5936 level will provide strong support in case of a downfall. The short covering in the late trade on Friday pushed the Nifty futures premium to 22 points. The Nifty OI PCR is 1.30, which suggest the presence of hedge positions in the market. Nifty 6100 and 6000 Puts have added significant amount of open interest and suggests presence of support at those levels. The 6300 and 6350 strikes have shown addition in OI and thus will act as barrier going forward. The resistance for the Nifty is at 6232-6302-6357. The support is at 6112-6060-6016. HOW TO TRADE? Buy RIL 3127 future and hedge it by shorting the Nifty future. Also similar strategy can be applied for SBI and DLF. The idea being that the above mentioned stocks will outperform the index. LAST WEEK’S RECOMMENDATIONS: L&T, Siemens, Praj Ind, Cairn India, RIL, RCOM, RPL, RNRL, REL & Rel cap all reached their targets. The remaining like Hindalco and Sterlite are looking strong and will achieve their targets within this week. THIS WEEK’S RECOMMENDATIONS:
BOI 412 SL 392 TGT 425-452.
RIL 3127 SL 3070 TGT 3196-3325.ABAN LLOYD 5069 SL 4975 TGT 5168-5277-5374.
TITAN IND 1569 SL 1530 TGT 1630-1683-1734.
SBI 2434 SL 2378 TGT 2502-2574-2626.
IDEA 139 SL 134 TGT 148-157.
DLF 1193 SL 1165 TGT 1226-1298.
ICICI BANK 1435 SL 1400 TGT 1465-1520-1612.