Reliance had been consolidating lately
within a range of 2800-2950. However, it
surged in the Friday's session on the back
of increasing volumes. The higher band
of 2950 levels had been witnessing
increased selling pressure followed by
renewed buying interest at the bottom
levels of 2800. The leading indicator like
14-day RSI has given a strong buy signal
as it stabilized around the 60 levels of the
100 scale and cut the trigger line, indicating
significant surge from the current levels.
The stock is currently trading above all the
major moving averages and the 30-day
EMA is placed around 2800 levels which
should act as a strong support. This stock
is an excellent pick from the current levels.
All long positions in the stock should be
protected with a stop loss placed below
2750 levels on a closing basis for upside
targets of 3100 and 3200 levels.
Axis Bank had been consolidating lately
around its rock solid support zone of 900
levels. The stock had witnessed significant
rally in the penultimate month during
which it made an all time high of 1025
levels. However, profit booking forced the
stock to test lower levels of 900-950. The
stock has broken out above the
consolidation band and further decline in
the stock is largely ruled out. The 14-day
RSI is hovering around 65 levels and has
generated a strong buy signal from the
current levels. Immediate resistance is
placed at around the all time high levels.
A sustained close above that level will induce
fresh buying interest in the stock, which might
guide it to test further highs of 1100
and 1150 levels. The 50-day EMA level is placed
at around 900 levels which is unlikely to be
broken in the near-term.Investors are advised to
assume long positions in the stock in the range
of 950-1000 levels for a medium-term target
of 1100 and 1150 levels. All long positions in the
stock should be protected with a stop loss placed below
885 levels on a closing basis.
JGS Investments is a home of expert stockmarket analysts, and premier source for technical analysts research and information on Indian Stock Markets.Just join us at Yahoo Messenger sheth_jg@yahoo.com OR Email at sheth_jg@yahoo.com
Friday, December 28, 2007
Pre Market Watch
Range-bound trading — The index exhibited range-bound trading in the 6111- 6060 band throughout the day’s trading session. On the upside, index faces resistance around yesterday’s high at 6111. Intra-day strength can be expected above the 6111 level and index could test 6185 levels on the upside. On the downside, intra-day support is around 6060, and a break below the 6060 level could see the index drift down intra day. Lower support levels are 6040-6000.
We once again caution investors not to get into low priced stocks or penny stocks with out fundamentals. Many stocks are witnessing explosive growth in the PE ratios and Q3 results have to justify the prices.
Varun Shipping(Rs.99.95) is in a no resistance zone. Watch for a 20-30% gain from these levels
Reliance Energy might get a boost from the SEBI's decision to clear Reliance Power's IPO. DLF is planning to hive off various businesses that will become separate companies in a measure that will increase the shareholder value. Indian market is likely trade down today though there will be trading oppurtunities in midcaps.
We have a Moderately Bullish view on Tata Steel . We recommend a Bull Call Spread strategy:
o Buy One Tata Steel Jan 920 CA @ 38 - 40
o Sell One Tata Steel Jan 960 CA @ 28 - 30
o BEP: 930
o Tgt: 960
o Investment: Rs.85,000 (Approx)
o Time Frame: 6-8 Days
Watch : Ioc,Cairn,Indiainfo,Indiabull,Cinemax buy in dips only.
Stocks in News:
SEBI clears decks for Reliance Power IPO by disposing complaints against the offer and asking promoters to lock-in entire 20% of their contribution for five years.
DLF plans to raise US$5bn over the next three years by listing five of its business units.
NTPC has signed agreements for loan and bond subscription worth Rs20bn LIC.
L&T plans to invest Rs25bn in building shipyard and expanding its engineering manufacturing unit.
GMR Infrastructure is considering listing GMR Energy on domestic bourses to fund its upcoming projects.
Unitech is close to announcing two joint development deals in Hyderabad and Chennai.
Reliance Communication slaps legal notice to DoT asking to freeze allocation of additional spectrum to existing GSM players.
ONGC Videsh strikes crude in Arabian Gulf Block off Qatar.
BOI gets board approval to raise Rs15bn via QIP. The floor price has been fixed at Rs359 per share.
GSPL and a subsidiary of Gujarat State Petroleum Corporation plans to invest Rs25bn on new pipelines.
Dabur India to foray into milk-based beverage segment.
Yamaha is likely to team up with Bajaj to create a common engine platform for high-end bikes.
L&T to hive-off concrete business into separate entity.
BoB raises Rs5bn through issue of bonds.
Bhushan Steel in technical assistance JV with Sumitomo Metal for the Orissa plant.
GSK Pharma to launch two vaccines in India.
Canara Bank ups its open offer price for Can Fin Homes to Rs78 per share from Rs63.
Wipro Consumer Care to provide lighting solutions for retail industry in India.
Infosys plans to offer wealth management solution in the domestic market.
JSW Steel and Essar Steel to set-up retail outlets for showcasing products.
Combined output growth of six key infrastructure industries was lower at 4.5% in October Vs 9.9% last year.
The Government is likely to scrap service tax on business and first-class air tickets for international journeys. It is also likely to halve duty on ATF from 10% to 5%.
The Railway Budget is likely to bring down freight on key commodities including steel, cement and petroleum products by 5%.
Mobile companies may have to shell out a higher percentage of their annual revenues as spectrum charges.
Leading tea players have hiked prices and the remaining companies are expected to follow suit.
Trai has asked I&B ministry to specify the date on which the CAS would become mandatory in 55 of the country’s top cities.
Have a great trading day
We once again caution investors not to get into low priced stocks or penny stocks with out fundamentals. Many stocks are witnessing explosive growth in the PE ratios and Q3 results have to justify the prices.
Varun Shipping(Rs.99.95) is in a no resistance zone. Watch for a 20-30% gain from these levels
Reliance Energy might get a boost from the SEBI's decision to clear Reliance Power's IPO. DLF is planning to hive off various businesses that will become separate companies in a measure that will increase the shareholder value. Indian market is likely trade down today though there will be trading oppurtunities in midcaps.
We have a Moderately Bullish view on Tata Steel . We recommend a Bull Call Spread strategy:
o Buy One Tata Steel Jan 920 CA @ 38 - 40
o Sell One Tata Steel Jan 960 CA @ 28 - 30
o BEP: 930
o Tgt: 960
o Investment: Rs.85,000 (Approx)
o Time Frame: 6-8 Days
Watch : Ioc,Cairn,Indiainfo,Indiabull,Cinemax buy in dips only.
Stocks in News:
SEBI clears decks for Reliance Power IPO by disposing complaints against the offer and asking promoters to lock-in entire 20% of their contribution for five years.
DLF plans to raise US$5bn over the next three years by listing five of its business units.
NTPC has signed agreements for loan and bond subscription worth Rs20bn LIC.
L&T plans to invest Rs25bn in building shipyard and expanding its engineering manufacturing unit.
GMR Infrastructure is considering listing GMR Energy on domestic bourses to fund its upcoming projects.
Unitech is close to announcing two joint development deals in Hyderabad and Chennai.
Reliance Communication slaps legal notice to DoT asking to freeze allocation of additional spectrum to existing GSM players.
ONGC Videsh strikes crude in Arabian Gulf Block off Qatar.
BOI gets board approval to raise Rs15bn via QIP. The floor price has been fixed at Rs359 per share.
GSPL and a subsidiary of Gujarat State Petroleum Corporation plans to invest Rs25bn on new pipelines.
Dabur India to foray into milk-based beverage segment.
Yamaha is likely to team up with Bajaj to create a common engine platform for high-end bikes.
L&T to hive-off concrete business into separate entity.
BoB raises Rs5bn through issue of bonds.
Bhushan Steel in technical assistance JV with Sumitomo Metal for the Orissa plant.
GSK Pharma to launch two vaccines in India.
Canara Bank ups its open offer price for Can Fin Homes to Rs78 per share from Rs63.
Wipro Consumer Care to provide lighting solutions for retail industry in India.
Infosys plans to offer wealth management solution in the domestic market.
JSW Steel and Essar Steel to set-up retail outlets for showcasing products.
Combined output growth of six key infrastructure industries was lower at 4.5% in October Vs 9.9% last year.
The Government is likely to scrap service tax on business and first-class air tickets for international journeys. It is also likely to halve duty on ATF from 10% to 5%.
The Railway Budget is likely to bring down freight on key commodities including steel, cement and petroleum products by 5%.
Mobile companies may have to shell out a higher percentage of their annual revenues as spectrum charges.
Leading tea players have hiked prices and the remaining companies are expected to follow suit.
Trai has asked I&B ministry to specify the date on which the CAS would become mandatory in 55 of the country’s top cities.
Have a great trading day
Thursday, December 27, 2007
Market will................
Nifty opened on a positive note in yesterday’s session
continuing the momentum of Monday’s trade. Nifty witnessed
strength through out the session as short covering amid with
fresh buying was prevailed in index heavyweight. The breadth
of the market ended on strong note at 922:260 suggesting
buying witnessed in mid-cap and small-cap stocks as well. Nifty
Januay futures have witnessed accumulation of long positions;
January futures have added 60 lakh shares in open interest
along with significant increase in premium to 33.35 points from
16.45 points. The rollover in the market stands at 60.71% while,
Nifty rollover is at 70.62 %. On the options front, Nifty Dec 6000
call options have seen closure of short positions while, Dec
6000 put options witnessed buying suggesting market to reamin
highly volatile.The market is expected to open on flat to positive
note today ; trader are advised to assume long position if Nifty
sustains above 6050 levels for immediate targets of 6110 and
6180 levels.
We have a Bullish view on Reliance. We recommend a Protective Put strategy:
o Buy One Reliance Jan Fut @ 2930-2934
o Buy One Reliance Jan 2900 PA @ 100-104
o BEP: 3034
o Investment: Rs.83,000 (Approx)
o Time Frame: 6-8 Days
Reliance Buy 2865-2875 with sl 2840 target 2960-2970 for 4-5 Days
continuing the momentum of Monday’s trade. Nifty witnessed
strength through out the session as short covering amid with
fresh buying was prevailed in index heavyweight. The breadth
of the market ended on strong note at 922:260 suggesting
buying witnessed in mid-cap and small-cap stocks as well. Nifty
Januay futures have witnessed accumulation of long positions;
January futures have added 60 lakh shares in open interest
along with significant increase in premium to 33.35 points from
16.45 points. The rollover in the market stands at 60.71% while,
Nifty rollover is at 70.62 %. On the options front, Nifty Dec 6000
call options have seen closure of short positions while, Dec
6000 put options witnessed buying suggesting market to reamin
highly volatile.The market is expected to open on flat to positive
note today ; trader are advised to assume long position if Nifty
sustains above 6050 levels for immediate targets of 6110 and
6180 levels.
We have a Bullish view on Reliance. We recommend a Protective Put strategy:
o Buy One Reliance Jan Fut @ 2930-2934
o Buy One Reliance Jan 2900 PA @ 100-104
o BEP: 3034
o Investment: Rs.83,000 (Approx)
o Time Frame: 6-8 Days
Reliance Buy 2865-2875 with sl 2840 target 2960-2970 for 4-5 Days
Wednesday, December 26, 2007
Bulls above 20000 only
Nifty — The index opened on a strong note and exhibited strength throughout the day’s trading session. It ended the session with a gain of 214 points.
Support & Resistance — The index closed above the 10 dma = 5934 and 20 dma = 5869. Intra day declines should find support around the 5934-5869 band. On the upside, the index faces resistance around 6012 and 6185 level.
Conclusion — Expect test of 6012, break above 6012 can see further strength
Shares of media and entertainment companies may attract investors' attention with films like "Taare Zameen Par" and " Welcome" doing well. While TZP is co-produced by PVR, Welcome is being distributed by the Network 18 group. Multiplex operators such as Inox, Adlabs and Shringar Cinemas could also gain.
Victory of Narendra Modi in Gujarat is perceived to be very positive for Adani Group. Keep an eye on Adani Enterprise and Mundara Port.
Ambalal Sarabhai Enterprises Ltd.
Go positive in this counter for a mid term target 52.00
Stocks in News:
SAIL to invest Rs200bn in West Bengal, about two fifth’s of its total planned investments.
State owned India Infrastructure Finance Company to lend Rs18bn to Tata group's Mundra UMPP.
ONGC-Mittal JV wins block in Trinidad & Tobago with estimated gas reserves of 2tn cubic feet.
Lanco Infratech in talks with global airport operator as partner in its bids for non metro airports. (Mint)
The Board of SBI will meet on January 25 to consider the merger of six associate banks with the parent.
Maruti Suzuki India will hike prices of its vehicles across different models between Rs4,000 and Rs12,000 next week.
ONGC has agreed to supply natural gas for the proposed 104MW gas based thermal project at Monarchak in West Tripura district.
GNFC has lined up an investment of Rs40bn over the next four years.
Allied Digital is close to two small-size acquisitions.
Coal India subsidiary in talks with Uttar Pradesh Rajya Sabha Vidyut Utpadan Nigam to float a 50:50 JV for setting up a 1,000MW thermal station.
BPCL is in talks with Japan based Nippon Oil for sharing expertise on fuel-cell cogeneration system.
Central education and oil cess to be kept outside the dual goods and service tax structure from April 2010.
Mobile tariffs for national long-distance calls are set to witness a further drop by 5-10%.
The Coal Ministry has asked the power ministry to ensure import of at least 20mt of coal next year.
The Government is likely to save Rs30bn on fertilizer subsidy bill.
Support & Resistance — The index closed above the 10 dma = 5934 and 20 dma = 5869. Intra day declines should find support around the 5934-5869 band. On the upside, the index faces resistance around 6012 and 6185 level.
Conclusion — Expect test of 6012, break above 6012 can see further strength
Shares of media and entertainment companies may attract investors' attention with films like "Taare Zameen Par" and " Welcome" doing well. While TZP is co-produced by PVR, Welcome is being distributed by the Network 18 group. Multiplex operators such as Inox, Adlabs and Shringar Cinemas could also gain.
Victory of Narendra Modi in Gujarat is perceived to be very positive for Adani Group. Keep an eye on Adani Enterprise and Mundara Port.
Ambalal Sarabhai Enterprises Ltd.
Go positive in this counter for a mid term target 52.00
Stocks in News:
SAIL to invest Rs200bn in West Bengal, about two fifth’s of its total planned investments.
State owned India Infrastructure Finance Company to lend Rs18bn to Tata group's Mundra UMPP.
ONGC-Mittal JV wins block in Trinidad & Tobago with estimated gas reserves of 2tn cubic feet.
Lanco Infratech in talks with global airport operator as partner in its bids for non metro airports. (Mint)
The Board of SBI will meet on January 25 to consider the merger of six associate banks with the parent.
Maruti Suzuki India will hike prices of its vehicles across different models between Rs4,000 and Rs12,000 next week.
ONGC has agreed to supply natural gas for the proposed 104MW gas based thermal project at Monarchak in West Tripura district.
GNFC has lined up an investment of Rs40bn over the next four years.
Allied Digital is close to two small-size acquisitions.
Coal India subsidiary in talks with Uttar Pradesh Rajya Sabha Vidyut Utpadan Nigam to float a 50:50 JV for setting up a 1,000MW thermal station.
BPCL is in talks with Japan based Nippon Oil for sharing expertise on fuel-cell cogeneration system.
Central education and oil cess to be kept outside the dual goods and service tax structure from April 2010.
Mobile tariffs for national long-distance calls are set to witness a further drop by 5-10%.
The Coal Ministry has asked the power ministry to ensure import of at least 20mt of coal next year.
The Government is likely to save Rs30bn on fertilizer subsidy bill.
Monday, December 24, 2007
IT STOCK TO SURGE
FII Gross purchases Rs 2585 Cr, Gross sales Rs 3678 Cr, Net Sellers Rs 1093 Cr.
MF Gross Purchases Rs 1055 Cr, Gross Sales Rs 932 Cr, Net Buyerss Rs 123 Cr
We will see rally of 450-500 points on sensex but donot ignore profit booking
A pink paper reports that the government requested NTPC, BHEL, SAIL, ONGC, IOC, BPCL, HPCL and Gail to issue bonus shares,as their reserves and surplus have increased to several times their paid-up capital.
SEBI finally opened up short selling to all though the start date is yet to be decided. valuations will come into picture once short selling is allowed
Watch out for IT/ITES stocks for bumper returns in the next 1 month
Sonata Software(Rs.53.60) is likely to move up to 70 levels.
HOT PICKS - SATYAM,CMC,KIRLOSKAR FERROUS,CONTAINER CORP
Stocks in News:
IOC to venture alone for small onland blocks in NELP VII.
MRF expects to get possession of 500-acre land at Tiruchi, Tamil Nadu by January for setting up a new facility.
Reliance Entertainment is divesting a 5% stake at an enterprise value of US$1.5bn.
Gail to issue bonus shares in next 3-6 months.
Ford plans to make India the hub for supply of petrol and diesel engines.
Ansal Properties looks at development of ports in partnership with UEM Builders of Malaysia.
ONGC will increase spending to increase output. It will pay mid year dividend of Rs18 per share.
The Maharashtra State Consumer Disputes Redressal Commission has charged ICICI Bank with forging of documents to recover loan.
Dunlop raises US$90mn from hedge funds to restructure loan and meet other corporate needs.
Attrition prompts Voltas to go for massive recruitment in next three years.
Bharti Enterprises to acquire Delhi-based retail chain Big Apple.
RPG group’s Spencer Retail to venture into specialty retailing.
Dr Reddy’s to shift output of 12 Betapharm drugs to India.
MF Gross Purchases Rs 1055 Cr, Gross Sales Rs 932 Cr, Net Buyerss Rs 123 Cr
We will see rally of 450-500 points on sensex but donot ignore profit booking
A pink paper reports that the government requested NTPC, BHEL, SAIL, ONGC, IOC, BPCL, HPCL and Gail to issue bonus shares,as their reserves and surplus have increased to several times their paid-up capital.
SEBI finally opened up short selling to all though the start date is yet to be decided. valuations will come into picture once short selling is allowed
Watch out for IT/ITES stocks for bumper returns in the next 1 month
Sonata Software(Rs.53.60) is likely to move up to 70 levels.
HOT PICKS - SATYAM,CMC,KIRLOSKAR FERROUS,CONTAINER CORP
Stocks in News:
IOC to venture alone for small onland blocks in NELP VII.
MRF expects to get possession of 500-acre land at Tiruchi, Tamil Nadu by January for setting up a new facility.
Reliance Entertainment is divesting a 5% stake at an enterprise value of US$1.5bn.
Gail to issue bonus shares in next 3-6 months.
Ford plans to make India the hub for supply of petrol and diesel engines.
Ansal Properties looks at development of ports in partnership with UEM Builders of Malaysia.
ONGC will increase spending to increase output. It will pay mid year dividend of Rs18 per share.
The Maharashtra State Consumer Disputes Redressal Commission has charged ICICI Bank with forging of documents to recover loan.
Dunlop raises US$90mn from hedge funds to restructure loan and meet other corporate needs.
Attrition prompts Voltas to go for massive recruitment in next three years.
Bharti Enterprises to acquire Delhi-based retail chain Big Apple.
RPG group’s Spencer Retail to venture into specialty retailing.
Dr Reddy’s to shift output of 12 Betapharm drugs to India.
Thursday, December 20, 2007
5-step guide to locating a 'wealth creator'
The first rule to investing is ‘Don’t lose money’. The second rule to investing is ‘Don’t forget rule no. 1’! It is essential to stick to these rules when it comes to investing, in order to avoid the possibility of capital erosion.
1. Assess the entry barriers created by a company
Entry barrier should be preferably intellectual in character
Remember, a stock is nothing but a stake in the company’s business. So, observe the company’s business and the entry barriers created by it. The entry barrier should be more ‘intellectual’ in character rather than ‘physical’. This is because while it is next to impossible to compete with a strong brand (an intellectual barrier), competitive advantage associated with a piece of land (a physical barrier) disappears when a competitor acquires one as well.
Strong brands such as ‘Thums-Up’, ‘Parle-G’, etc. have enabled their companies to retain the top spot. However, at times, there could be exceptions. For instance, the entry barrier associated with TISCO would be its large base of iron ore and coal, which allows it to lower its raw material cost drastically vis-à-vis its competitors for long time to come.
Entry barrier should be long-lasting
An entry barrier should not only be strong, but also long lasting. Such companies will keep making money because their entry barriers keep working for them. For instance, Britannia may not be the best managed company but its strong brand continuously earns money for it.
Buy into such companies at the earliest
As an investor, buy into such businesses ahead of the crowd. If an entry barrier has been established very recently, it may not yet be exploited by the business. Accordingly, the market would not have valued it in the company’s share price.
For instance, when Financial Technologies (promoters of MCX) got its commodity exchange license and launched it, the popular opinion held was that it would be unable to execute the business well. But, today, it has emerged as a premier commodity exchange. Investing in such companies before the market sees their potential delivers best appreciation.
“Though difficult to practice, think ahead of the crowd”
2. Management should be competent and passionate
Choose companies that are led by a team and are competent and passionate. Both these attributes are equally important. Competence or passion alone will not work. An individual with a local degree combined with passion would have greater growth prospects than one who has a Harvard degree but no passion. A company like Pantaloon Retail is a shining example of how passion can create wealth.
“The definition of a great company is one that will remain great for many years”
3. Management should have integrity
Integrity is the most crucial quality that a company’s management must have. Such companies not only run their businesses in an honest manner, but, are honest to all their stakeholders, whether they are employees, the government or the shareholders.
If honesty is part of a company’s DNA, it will be fair to its smallest stakeholders – the minority retail shareholders. Companies such as Tata and Infosys have this quality, which has added to their growth and market attractiveness immensely.
“Without management integrity, no margin of safety can be high enough”
The above-mentioned three characteristics (long lasting intellectual entry barrier, competent and passionate management and integrity) must all be simultaneously present in a company that you choose to invest in.
4. Buy low
The price that you pay for a stock determines your rate of return. So, it is essential that you get your purchase price right. While some companies come out on top with respect to all the first three parameters, the returns falter when it comes to the purchase price.
For instance, HLL comes on top with respect to all the first three parameters but has not delivered as much as far as its stock goes. Its stock delivered a CAGR of approximately just 3 per cent over the last 5 years, when the market delivered a CAGR of approximately 44 per cent over the same period.
The quote - “In the bible it is said that love takes care of a lot of sins. In investments, purchase price takes care of a lot of mistakes” – is very apt. You can make mistakes on assessing the first three parameters, since they are subjective in nature, but getting the right purchase price covers up for all your mistakes. Hence, estimate the expected value / intrinsic value of the company and keep an adequate margin of safety in the purchase price.
“It is much more important to buy cheap than to sell dear”
5. Have patience
When you buy a house you don’t expect it to appreciate overnight. You look at its appreciation over a long period. The same goes with equity. After having bought a company that conforms to all the above four criteria, you need to have patience. Investing in equities is often driven by two emotions – greed and fear. And patience is the mantra that helps overcome these emotions. Patience makes the difference between investing and speculation. It’s like a fertiliser to the investment process.
“In reality, patience is crucial, but it is a rare commodity”
End note
Investing is laying out today’s money for more in the future. Its about performance of the underlying assets. Success in investing is the outcome of a disciplined approach.
Happy Investing !
1. Assess the entry barriers created by a company
Entry barrier should be preferably intellectual in character
Remember, a stock is nothing but a stake in the company’s business. So, observe the company’s business and the entry barriers created by it. The entry barrier should be more ‘intellectual’ in character rather than ‘physical’. This is because while it is next to impossible to compete with a strong brand (an intellectual barrier), competitive advantage associated with a piece of land (a physical barrier) disappears when a competitor acquires one as well.
Strong brands such as ‘Thums-Up’, ‘Parle-G’, etc. have enabled their companies to retain the top spot. However, at times, there could be exceptions. For instance, the entry barrier associated with TISCO would be its large base of iron ore and coal, which allows it to lower its raw material cost drastically vis-à-vis its competitors for long time to come.
Entry barrier should be long-lasting
An entry barrier should not only be strong, but also long lasting. Such companies will keep making money because their entry barriers keep working for them. For instance, Britannia may not be the best managed company but its strong brand continuously earns money for it.
Buy into such companies at the earliest
As an investor, buy into such businesses ahead of the crowd. If an entry barrier has been established very recently, it may not yet be exploited by the business. Accordingly, the market would not have valued it in the company’s share price.
For instance, when Financial Technologies (promoters of MCX) got its commodity exchange license and launched it, the popular opinion held was that it would be unable to execute the business well. But, today, it has emerged as a premier commodity exchange. Investing in such companies before the market sees their potential delivers best appreciation.
“Though difficult to practice, think ahead of the crowd”
2. Management should be competent and passionate
Choose companies that are led by a team and are competent and passionate. Both these attributes are equally important. Competence or passion alone will not work. An individual with a local degree combined with passion would have greater growth prospects than one who has a Harvard degree but no passion. A company like Pantaloon Retail is a shining example of how passion can create wealth.
“The definition of a great company is one that will remain great for many years”
3. Management should have integrity
Integrity is the most crucial quality that a company’s management must have. Such companies not only run their businesses in an honest manner, but, are honest to all their stakeholders, whether they are employees, the government or the shareholders.
If honesty is part of a company’s DNA, it will be fair to its smallest stakeholders – the minority retail shareholders. Companies such as Tata and Infosys have this quality, which has added to their growth and market attractiveness immensely.
“Without management integrity, no margin of safety can be high enough”
The above-mentioned three characteristics (long lasting intellectual entry barrier, competent and passionate management and integrity) must all be simultaneously present in a company that you choose to invest in.
4. Buy low
The price that you pay for a stock determines your rate of return. So, it is essential that you get your purchase price right. While some companies come out on top with respect to all the first three parameters, the returns falter when it comes to the purchase price.
For instance, HLL comes on top with respect to all the first three parameters but has not delivered as much as far as its stock goes. Its stock delivered a CAGR of approximately just 3 per cent over the last 5 years, when the market delivered a CAGR of approximately 44 per cent over the same period.
The quote - “In the bible it is said that love takes care of a lot of sins. In investments, purchase price takes care of a lot of mistakes” – is very apt. You can make mistakes on assessing the first three parameters, since they are subjective in nature, but getting the right purchase price covers up for all your mistakes. Hence, estimate the expected value / intrinsic value of the company and keep an adequate margin of safety in the purchase price.
“It is much more important to buy cheap than to sell dear”
5. Have patience
When you buy a house you don’t expect it to appreciate overnight. You look at its appreciation over a long period. The same goes with equity. After having bought a company that conforms to all the above four criteria, you need to have patience. Investing in equities is often driven by two emotions – greed and fear. And patience is the mantra that helps overcome these emotions. Patience makes the difference between investing and speculation. It’s like a fertiliser to the investment process.
“In reality, patience is crucial, but it is a rare commodity”
End note
Investing is laying out today’s money for more in the future. Its about performance of the underlying assets. Success in investing is the outcome of a disciplined approach.
Happy Investing !
IFCI FOR FREE FALL
OUR BTST- BALRAMPUR CHINI
FII Gross purchases Rs 3446 Cr, Gross sales Rs 5896 Cr, Net Sellers Rs 2449 Cr.
MF Gross Purchases Rs 895 Cr, Gross Sales Rs 514 Cr, Net Buyerss Rs 381 Cr.
OUR PICKS - RELCAP,PENINSULA LAND,ANUH PHARMA,DCB
SELL N SELL IFCI TILL 75-80 LEVELS ON OPENING
Today, Nifty has support at 5,672 and resistance at 5,847 and BSE Sensex has support at 18,872 and resistance at 19,384.
The market may edge higher amid steady-to-firm Asian markets. However, a major upmove is likely as traders are unlikely to build large positions ahead of a long weekend. The market remains closed on Friday, 21 December 2007 on account of Bakri Id and also on Tuesday, 25 December 2007 on account of Christmas.Traders are likely to start building positions towards the end of the month based on expectations of Q3 December 2007 results due next month.
As per provisional data, FIIs were net sellers of shares to the tune of Rs 1454.06 crore on Wednesday, 19 December 2007. Domestic funds bought shares worth a net Rs 350.60 crore on that day.
Stocks in News:
IFCI stake sale has been called off due to differences with Sterlite-Morgan Stanley consortium over management control.
Kingfisher and Deccan board approves merger.
Glenmark receives domestic patent for its asthma molecule, Oglemilast.
BHEL’s bid to build Rs84bn electricity-generation factory gets rejected.
Reliance Industries (RIL) is in talks with Tata Chemicals to sell KG basin gas.
Tata Power eyes shipping and logistics business and plans to raise Rs40bn from domestic and international market.
SAIL signs a pact with Rail Vikas for transportation of 5 lakh tons of imported coking coal per year.
Vale, world’s largest iron ore pellets manufacturer, is in talks with Tata Steel to set up a steel slab plant in Brazil.
Reliance Retail to enter food trading business as a part of major re-structuring of its food and grocery initiative.
Dabur India is planning acquisitions of an FMCG company in foods or personal care segment.
Hero Honda forays into used two-wheeler trading business under the ‘Hero Honda SURE!’ brand.
Union Bank is planning to enter mutual fund business and venture capital business.
Welspun India buys 76% stake in Portugal-based company for Rs600mn.
MRF plans to spend Rs5bn towards setting up a greenfield two-wheeler and four-wheeler tyre facility in TN.
Rolta India plans to enter real estate business through a group company, Rolta Infrastructure.
JK Tyres to hike tyre prices in next quarter.
EMCO promoters keen to raise stake in the company to 51%.
The telecom spectrum panel recommends the government to consider new allocation options, including auction.
Allahabad High Court asks UP Government to rework the cane state advisory price SAP) fixed by it for purchase of sugarcane.
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
FII Gross purchases Rs 3446 Cr, Gross sales Rs 5896 Cr, Net Sellers Rs 2449 Cr.
MF Gross Purchases Rs 895 Cr, Gross Sales Rs 514 Cr, Net Buyerss Rs 381 Cr.
OUR PICKS - RELCAP,PENINSULA LAND,ANUH PHARMA,DCB
SELL N SELL IFCI TILL 75-80 LEVELS ON OPENING
Today, Nifty has support at 5,672 and resistance at 5,847 and BSE Sensex has support at 18,872 and resistance at 19,384.
The market may edge higher amid steady-to-firm Asian markets. However, a major upmove is likely as traders are unlikely to build large positions ahead of a long weekend. The market remains closed on Friday, 21 December 2007 on account of Bakri Id and also on Tuesday, 25 December 2007 on account of Christmas.Traders are likely to start building positions towards the end of the month based on expectations of Q3 December 2007 results due next month.
As per provisional data, FIIs were net sellers of shares to the tune of Rs 1454.06 crore on Wednesday, 19 December 2007. Domestic funds bought shares worth a net Rs 350.60 crore on that day.
Stocks in News:
IFCI stake sale has been called off due to differences with Sterlite-Morgan Stanley consortium over management control.
Kingfisher and Deccan board approves merger.
Glenmark receives domestic patent for its asthma molecule, Oglemilast.
BHEL’s bid to build Rs84bn electricity-generation factory gets rejected.
Reliance Industries (RIL) is in talks with Tata Chemicals to sell KG basin gas.
Tata Power eyes shipping and logistics business and plans to raise Rs40bn from domestic and international market.
SAIL signs a pact with Rail Vikas for transportation of 5 lakh tons of imported coking coal per year.
Vale, world’s largest iron ore pellets manufacturer, is in talks with Tata Steel to set up a steel slab plant in Brazil.
Reliance Retail to enter food trading business as a part of major re-structuring of its food and grocery initiative.
Dabur India is planning acquisitions of an FMCG company in foods or personal care segment.
Hero Honda forays into used two-wheeler trading business under the ‘Hero Honda SURE!’ brand.
Union Bank is planning to enter mutual fund business and venture capital business.
Welspun India buys 76% stake in Portugal-based company for Rs600mn.
MRF plans to spend Rs5bn towards setting up a greenfield two-wheeler and four-wheeler tyre facility in TN.
Rolta India plans to enter real estate business through a group company, Rolta Infrastructure.
JK Tyres to hike tyre prices in next quarter.
EMCO promoters keen to raise stake in the company to 51%.
The telecom spectrum panel recommends the government to consider new allocation options, including auction.
Allahabad High Court asks UP Government to rework the cane state advisory price SAP) fixed by it for purchase of sugarcane.
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
Wednesday, December 19, 2007
Relief rally haaaaan
OUR BTST - NIFTY ,BANKNIFTY,PATEL ENG
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
FII Gross purchases Rs 4117 Cr, Gross sales Rs 5216 Cr, Net Sellers Rs 1089 Cr.
MF Gross Purchases Rs 701 Cr, Gross Sales Rs 495 Cr, Net Buyerss Rs 207 Cr.
Today, Nifty has support at 5,698 and resistance at 5,837 and BSE Sensex has support at 18,936 and resistance at 19,416
Markets on the back of positive global cues are likely to trade in the positive zone.A business daily reports that RCF is planning to sell the Mumbai land. If turned true the stock is likely witness huge action and likely to propel stocks like Bindal Agro travelling in the same boat. Land bank stories are still active and come 2008 we believe slowly market is likely to lose interest in the land bank buzz. But Realy and Infrastructure are likely to enjoy market favour unless any setbacks in the form of next year's fiscal budget.
HOT PICKS - PATEL ENG,ELDER HEALTHCARE,JB CHEMICALS,NEYVELI LIGNITE,ONGC,ISPAT(all time darling)
Pyramid Retail(Rs.174.55) stock price is likely to continue the upside journey after the buy out by IndiaBulls
Stocks in News:
PowerGrid Corporation plans foray into entertainment business and is in talks with Zee Network for a JV.
Pfizer is short of clinical research staff as it is set to expand the number of trials done in India.
Royal Orchid would make an international foray with plans to @������<���om beach resort over a 30-acre property in Dar-es-Salaam, Tanzania.
JSW Steel looking at buying an ore mine in Latin America.
The hearing for US$400mn claim filed by Flag Telecom against VSNL would be decided by early 2008.
BEML expects to start producing medium speed rail coaches from 2008-09.
BEML expects Rs40bn order book by the end of the current financial year.
Wockhardt is conducting phase-II clinical trials of an anti-infective molecule WCK771
Maruti has offered discounts ranging from Rs18,500 to Rs57,500 across models before January price hike.
Indian Oil Corporation has set aside US$3bn for overseas acquisition.
Jindal Power likely to invest over Rs50bn in adding another 1,320MW to its thermal power project in Chhattisgarh.
Voltas has entered the water treatment business.
The Bombay High Court has approved the demerger of Bajaj Auto into two separate entities.
Rallis India plans foray into newer specialty chemicals segment and will look at areas such as construction chemicals.
GTL Infra to invest $450-600mn over next three years for setting up telecom towers.
Glenmark to acquire multi generic front end US$15mn company in Europe.
REL plans to foray in to Africa, to bid for projects in 3 African countries.
HDFC has sought the approval of NHB to retain stake in HDFC Bank.
Spice Jet, Air Deccan to hike prices by around Rs500-1,000.
PSU banks to go on strike from February if proposed plan on consolidation and mergers is not withdrawn.
Farmers' association wants a removal of ban on wheat and rice futures.
Regulators agree to partially open the ECB window for NBFCs.
States to meet Prime Minister to take up new mineral policy.
The Government to ease norms governing airport construction, to allow new airports to come up within 150km of existing ones.
Maharashtra Government plans to invest in Co-Operative Sugar factories to reduce burden of loans.
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
FII Gross purchases Rs 4117 Cr, Gross sales Rs 5216 Cr, Net Sellers Rs 1089 Cr.
MF Gross Purchases Rs 701 Cr, Gross Sales Rs 495 Cr, Net Buyerss Rs 207 Cr.
Today, Nifty has support at 5,698 and resistance at 5,837 and BSE Sensex has support at 18,936 and resistance at 19,416
Markets on the back of positive global cues are likely to trade in the positive zone.A business daily reports that RCF is planning to sell the Mumbai land. If turned true the stock is likely witness huge action and likely to propel stocks like Bindal Agro travelling in the same boat. Land bank stories are still active and come 2008 we believe slowly market is likely to lose interest in the land bank buzz. But Realy and Infrastructure are likely to enjoy market favour unless any setbacks in the form of next year's fiscal budget.
HOT PICKS - PATEL ENG,ELDER HEALTHCARE,JB CHEMICALS,NEYVELI LIGNITE,ONGC,ISPAT(all time darling)
Pyramid Retail(Rs.174.55) stock price is likely to continue the upside journey after the buy out by IndiaBulls
Stocks in News:
PowerGrid Corporation plans foray into entertainment business and is in talks with Zee Network for a JV.
Pfizer is short of clinical research staff as it is set to expand the number of trials done in India.
Royal Orchid would make an international foray with plans to @������<���om beach resort over a 30-acre property in Dar-es-Salaam, Tanzania.
JSW Steel looking at buying an ore mine in Latin America.
The hearing for US$400mn claim filed by Flag Telecom against VSNL would be decided by early 2008.
BEML expects to start producing medium speed rail coaches from 2008-09.
BEML expects Rs40bn order book by the end of the current financial year.
Wockhardt is conducting phase-II clinical trials of an anti-infective molecule WCK771
Maruti has offered discounts ranging from Rs18,500 to Rs57,500 across models before January price hike.
Indian Oil Corporation has set aside US$3bn for overseas acquisition.
Jindal Power likely to invest over Rs50bn in adding another 1,320MW to its thermal power project in Chhattisgarh.
Voltas has entered the water treatment business.
The Bombay High Court has approved the demerger of Bajaj Auto into two separate entities.
Rallis India plans foray into newer specialty chemicals segment and will look at areas such as construction chemicals.
GTL Infra to invest $450-600mn over next three years for setting up telecom towers.
Glenmark to acquire multi generic front end US$15mn company in Europe.
REL plans to foray in to Africa, to bid for projects in 3 African countries.
HDFC has sought the approval of NHB to retain stake in HDFC Bank.
Spice Jet, Air Deccan to hike prices by around Rs500-1,000.
PSU banks to go on strike from February if proposed plan on consolidation and mergers is not withdrawn.
Farmers' association wants a removal of ban on wheat and rice futures.
Regulators agree to partially open the ECB window for NBFCs.
States to meet Prime Minister to take up new mineral policy.
The Government to ease norms governing airport construction, to allow new airports to come up within 150km of existing ones.
Maharashtra Government plans to invest in Co-Operative Sugar factories to reduce burden of loans.
Tuesday, December 18, 2007
SUBSCRIBER NOW TO KNOW MORE
The market is expected to open on a weak note today;
traders are advised to assume short positions if Nifty fails to
hold 5750 levels with a stop loss placed at 5820 levels for
downsides of 5700 and 5640 levels. Alternatively, long positions
can be assumed if Nifty finds support at 5640 levels.
The breadth of the market declined to 228:954
suggesting selling pressure prevailed in mid -cap and small-cap
stocks as well. Nifty Futures have witnessed fresh build up of
short positions; Nifty December futures have added 7 lakh
shares in open interest with premium shrinking to 2.80 points
from 24.10 points. On the options front Nifty call options have
witnessed buying while, put options have seen short closure
shuggesting market to remain highly volatile with a downward
bias .
HOT PICKS - GTL INFRA,UNICHEM LAB,BHARATI TELE,KAUSHALYA INFRA
We have a Cautiously Bullish view on Reliance. We recommend a Protective Put strategy:
o Buy One Reliance Dec Fut @ 2790-2800
o Buy One Reliance Dec 2800 PA @ 55 – 60
o BEP: 2860
o Investment: Rs.80,000 (Approx)
o Time Frame: 8-10 Days
traders are advised to assume short positions if Nifty fails to
hold 5750 levels with a stop loss placed at 5820 levels for
downsides of 5700 and 5640 levels. Alternatively, long positions
can be assumed if Nifty finds support at 5640 levels.
The breadth of the market declined to 228:954
suggesting selling pressure prevailed in mid -cap and small-cap
stocks as well. Nifty Futures have witnessed fresh build up of
short positions; Nifty December futures have added 7 lakh
shares in open interest with premium shrinking to 2.80 points
from 24.10 points. On the options front Nifty call options have
witnessed buying while, put options have seen short closure
shuggesting market to remain highly volatile with a downward
bias .
HOT PICKS - GTL INFRA,UNICHEM LAB,BHARATI TELE,KAUSHALYA INFRA
We have a Cautiously Bullish view on Reliance. We recommend a Protective Put strategy:
o Buy One Reliance Dec Fut @ 2790-2800
o Buy One Reliance Dec 2800 PA @ 55 – 60
o BEP: 2860
o Investment: Rs.80,000 (Approx)
o Time Frame: 8-10 Days
Monday, December 17, 2007
Market highly volatile
SUBSCRIBER NOW TO KNOW MORE
FII Gross purchases Rs 6910 Cr, Gross sales Rs 5827 Cr, Net Buyers Rs 1082 Cr.
MF Gross Purchases Rs 1011 Cr, Gross Sales Rs 1192 Cr, Net Sellers Rs 181 Cr.
As per provisional data, FIIs sold shares worth a net Rs 647.10 crore on Friday, 14 December 2007. Domestic institutional investors bought shares worth a net Rs 105.18 crore on that day.
FIIs were net sellers of index futures worth Rs 1359.88 crore on Friday. They were net sellers to the tune of Rs 50.63 crore in index options on that day. FIIs net sold stock futures to the tune of Rs 785.05 crore. They net sold individual stock options to the tune of Rs 10.71 crore.
We expect a softer opening today and another volatile day for the market today. The main attraction will be outside the key indices.Today, Nifty has support at 5,923 and resistance at 6,102 and BSE Sensex has support at 19,680 and resistance at 20,125
Indian midcaps/smallcaps are in no mood to listen to the global music, continue to flare up. Though the run up is broad based the intensity of the run up is definitely a cause of concern. Operator driven stocks are running crazy leaving behind the valuations. Extreme caution is adviced in rumour based stocks and remember history repeats but trying to time the fall is not advisable
Indiabulls Financial will be in action as the Delhi High Court has cleared its demerger plans.
HOT PICKS - INDIA CEM,RDB INDUSTRIES,FORTIS HEALTHCARE,FINOLEX INDUSTRIES
Market: News for the day...
1) Ford set to announce Tata Group as preferred bidder for Jaguar and Land Rover.
2) Tatas eye UK investment bank Close Brothers. Tata among six others suitors.
3) IFCI board meet today, sets conversion price of Rs 107 for FIs, 3 firms Shinsei-PNB, Sterlite-Morgan and Cargill-Texas in fray.
4) Lanco Infra to create holding co for verticals and appoints AT Kearney & E&Y to recommend changes.
5) NSE F&O curb: Alok Industries, Neyveli, TTML, Power Grid, Rajesh Exports, Essar Oil, MRPL, Gitanjali Gems, Nagar Fert, Hotel Leela, Bongaigaon, Adlabs, and GMR Infra. Out of curb: Oswal Chem, Parsvnath, IFCI, Arvind Mills.
6) Phoenix Lamps eyes Surya Roshi's lightining biz.
7) Bajaj Auto Demerger - hearing in Bombay HC concludes; HC to issue order on Monday.
8) Govt may rein revenue sharing agreement to compensate GMR lead consortium for possible loss of revenues due to proposed Greater Noida airport.
9) SBI eyes more banks abroad.
10) Bid for Govt's 36.7% stake in Gujarat Alkalies will be invited post elections.
11) Jindal Drilling: To make pref issue of 1.2 m shares to Citigroup at Rs 1,280/share. Jindal Drilling Issue to Citi represents 10.47% of post-issue cap.
12) Era Infra Engineers open offer at Rs 615/sh.
13) General insurance to get full pricing freedom from Jan 1.
14) India Glycols acquires Shakumbari Sugar and Allied Ind for Rs 47 cr.
15) Power Grid gets finance ministry clearance to procure USD 1600m loan from World Bank and ADB.
16) Coal India hikes prices by 10-15%.
17) Mold-Tek will sell 10% in KPO unit to PE firms.
18) ABG Shipyard to raise USD 200m for expansion.
19) Cummins India eyes USD 2bn auto sourcing deals.
20) Colgate to resume trading and would be part of NSE F&O; lot size 550 shares; options strike prices between Rs 80-680.
21) Manaksia IPO opens today; offer of 1.55 cr shares; price band Rs 140-160.
22) Precision Pipes IPO opens today; offer of shares up to Rs 75 cr; price band Rs 140-150.
23) Porwal Auto Components IPO opens today; offer of 50 lakh shares; price band Rs 68-75.
24) Phoenix Mills board meet on Dec 19 on stock split.
25) Mahindra Holidays & Resorts India files DRHP for IPO of 1.07 cr shares.
26) Allied Digital: Likely to close about USD 5 m domestic co buy in Dec. Sees FY09 revenue at Rs 650 cr; profit at Rs 75 cr.
FII Gross purchases Rs 6910 Cr, Gross sales Rs 5827 Cr, Net Buyers Rs 1082 Cr.
MF Gross Purchases Rs 1011 Cr, Gross Sales Rs 1192 Cr, Net Sellers Rs 181 Cr.
As per provisional data, FIIs sold shares worth a net Rs 647.10 crore on Friday, 14 December 2007. Domestic institutional investors bought shares worth a net Rs 105.18 crore on that day.
FIIs were net sellers of index futures worth Rs 1359.88 crore on Friday. They were net sellers to the tune of Rs 50.63 crore in index options on that day. FIIs net sold stock futures to the tune of Rs 785.05 crore. They net sold individual stock options to the tune of Rs 10.71 crore.
We expect a softer opening today and another volatile day for the market today. The main attraction will be outside the key indices.Today, Nifty has support at 5,923 and resistance at 6,102 and BSE Sensex has support at 19,680 and resistance at 20,125
Indian midcaps/smallcaps are in no mood to listen to the global music, continue to flare up. Though the run up is broad based the intensity of the run up is definitely a cause of concern. Operator driven stocks are running crazy leaving behind the valuations. Extreme caution is adviced in rumour based stocks and remember history repeats but trying to time the fall is not advisable
Indiabulls Financial will be in action as the Delhi High Court has cleared its demerger plans.
HOT PICKS - INDIA CEM,RDB INDUSTRIES,FORTIS HEALTHCARE,FINOLEX INDUSTRIES
Market: News for the day...
1) Ford set to announce Tata Group as preferred bidder for Jaguar and Land Rover.
2) Tatas eye UK investment bank Close Brothers. Tata among six others suitors.
3) IFCI board meet today, sets conversion price of Rs 107 for FIs, 3 firms Shinsei-PNB, Sterlite-Morgan and Cargill-Texas in fray.
4) Lanco Infra to create holding co for verticals and appoints AT Kearney & E&Y to recommend changes.
5) NSE F&O curb: Alok Industries, Neyveli, TTML, Power Grid, Rajesh Exports, Essar Oil, MRPL, Gitanjali Gems, Nagar Fert, Hotel Leela, Bongaigaon, Adlabs, and GMR Infra. Out of curb: Oswal Chem, Parsvnath, IFCI, Arvind Mills.
6) Phoenix Lamps eyes Surya Roshi's lightining biz.
7) Bajaj Auto Demerger - hearing in Bombay HC concludes; HC to issue order on Monday.
8) Govt may rein revenue sharing agreement to compensate GMR lead consortium for possible loss of revenues due to proposed Greater Noida airport.
9) SBI eyes more banks abroad.
10) Bid for Govt's 36.7% stake in Gujarat Alkalies will be invited post elections.
11) Jindal Drilling: To make pref issue of 1.2 m shares to Citigroup at Rs 1,280/share. Jindal Drilling Issue to Citi represents 10.47% of post-issue cap.
12) Era Infra Engineers open offer at Rs 615/sh.
13) General insurance to get full pricing freedom from Jan 1.
14) India Glycols acquires Shakumbari Sugar and Allied Ind for Rs 47 cr.
15) Power Grid gets finance ministry clearance to procure USD 1600m loan from World Bank and ADB.
16) Coal India hikes prices by 10-15%.
17) Mold-Tek will sell 10% in KPO unit to PE firms.
18) ABG Shipyard to raise USD 200m for expansion.
19) Cummins India eyes USD 2bn auto sourcing deals.
20) Colgate to resume trading and would be part of NSE F&O; lot size 550 shares; options strike prices between Rs 80-680.
21) Manaksia IPO opens today; offer of 1.55 cr shares; price band Rs 140-160.
22) Precision Pipes IPO opens today; offer of shares up to Rs 75 cr; price band Rs 140-150.
23) Porwal Auto Components IPO opens today; offer of 50 lakh shares; price band Rs 68-75.
24) Phoenix Mills board meet on Dec 19 on stock split.
25) Mahindra Holidays & Resorts India files DRHP for IPO of 1.07 cr shares.
26) Allied Digital: Likely to close about USD 5 m domestic co buy in Dec. Sees FY09 revenue at Rs 650 cr; profit at Rs 75 cr.
Friday, December 14, 2007
8 reasons why stock market traders lose money
Many people think trading is the simplest way of making money in the stock market. Far from it; I believe it is the easiest way of losing money. There is an old Wall Street adage, that "the easiest way of making a small fortune in the markets is having a large fortune."
I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach.
1. Trading during the first half-hour of the session
The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day's trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day.
Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts.
2. Failing to hear the market's message
Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not.
I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market.
This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market's message is to keep out.
Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples' expectation. Let us consider two recent Indian events of significance.
One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country's economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge.
Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case.
The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India and Pakistan. And markets hate war and uncertainty.
In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed.
Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn't care who you are and it's certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself.
3. Ignoring which phase the market is in
It is important to know what phase the market is in -- whether it's in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength.
Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick.
You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in.
4. Failing to reduce position size when warranted
Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares.
This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market's mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken.
5. Failing to treat every trade as just another trade
Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out.
Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they -- rarely! -- occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk.
6. Over-eagerness in booking profits
Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market.
If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits.
Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target.
Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It's boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates.
7. Trading for emotional highs
Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress.
8. Failing to realise that trading decisions are not about consensus building
Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do.
Trading is a loner's job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market.
If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.
I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach.
1. Trading during the first half-hour of the session
The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day's trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day.
Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts.
2. Failing to hear the market's message
Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not.
I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market.
This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market's message is to keep out.
Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples' expectation. Let us consider two recent Indian events of significance.
One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country's economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge.
Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case.
The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India and Pakistan. And markets hate war and uncertainty.
In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed.
Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn't care who you are and it's certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself.
3. Ignoring which phase the market is in
It is important to know what phase the market is in -- whether it's in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength.
Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick.
You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in.
4. Failing to reduce position size when warranted
Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares.
This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market's mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken.
5. Failing to treat every trade as just another trade
Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out.
Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they -- rarely! -- occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk.
6. Over-eagerness in booking profits
Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market.
If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits.
Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target.
Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It's boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates.
7. Trading for emotional highs
Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress.
8. Failing to realise that trading decisions are not about consensus building
Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do.
Trading is a loner's job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market.
If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.
Market highly volatile
HOT PICKS - ISPAT,MUNDRA PORT, RAMA NEWSPRINT, HIND ORGANICS
Today, Nifty has support at 5,946 and resistance at 6,143 and BSE Sensex has support at 19,829 and resistance at 20,319.
we believe the markets are likely to trade up today. Daily it is a routine to witness new stocks rallying and sitting pretty on circuits. The trend is likely to continue irrespective of the front liners. We always believed in midcaps due to low valutions and rapid growth and never concentrate on large caps except few.The market is expected to stay sideways in absence of major positive trigger in near term. However high volatility may be seen as the market consolidates at higher levels. Overseas cues will also to some extent dictate the near term sentiment. However small and mid-cap stocks may continue their rally on momentum buying, as indicated by strong market breadth in the past few days
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 401.76 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 226.65 crore on Thursday, 13 December 2007.
GMR Share is tipped to touch Rs.280 mark by the year
Tata Tele(Mah) is likely to divest 49% of the stake in its tower business.we have our bet placed likely to double from these levels in the next one year
Abhishek Mills(Rs.71) mentioned couple of times in this section is a multibagger. The stock appear to be eyeing the century level
SUBSCRIBER NOW TO KNOW MORE
Today, Nifty has support at 5,946 and resistance at 6,143 and BSE Sensex has support at 19,829 and resistance at 20,319.
we believe the markets are likely to trade up today. Daily it is a routine to witness new stocks rallying and sitting pretty on circuits. The trend is likely to continue irrespective of the front liners. We always believed in midcaps due to low valutions and rapid growth and never concentrate on large caps except few.The market is expected to stay sideways in absence of major positive trigger in near term. However high volatility may be seen as the market consolidates at higher levels. Overseas cues will also to some extent dictate the near term sentiment. However small and mid-cap stocks may continue their rally on momentum buying, as indicated by strong market breadth in the past few days
As per provisional data, foreign institutional investors (FIIs) sold shares worth a net Rs 401.76 crore, while domestic institutional investors (DIIs) were net buyers of shares worth Rs 226.65 crore on Thursday, 13 December 2007.
GMR Share is tipped to touch Rs.280 mark by the year
Tata Tele(Mah) is likely to divest 49% of the stake in its tower business.we have our bet placed likely to double from these levels in the next one year
Abhishek Mills(Rs.71) mentioned couple of times in this section is a multibagger. The stock appear to be eyeing the century level
SUBSCRIBER NOW TO KNOW MORE
Thursday, December 13, 2007
BULLS vs BEARS
SUBSCRIBER NOW TO KNOW MORE
OUR TRADING CALL OF KS OILS ALSO FLARED ALMOST 10% OH GOD. WHAT A GAIN.
OUR BTST are NTPC,RNRL,PUNJLLOD,INDIAN OIL
The market is expected to open on a flat to positive note today.
However, profit booking from the higher levels cannot be ruled
out. Traders are advised to assume long positions from lower
support of 6150 and 6120 levels with final stop loss placed
below 6110 levels.However, Nifty witnessed
sharp bounce from the lower support of 6000 levels in the initial
hour of the trade itself. Buying in telecom pivotal assisted the
Nifty to test li fe time high at 6175 levels. Buying continued in
mid -cap stocks as indicated by strong market breadth at
797:377. Nifty December futures have seen fresh accumulation
of long positions ; December futures have added 40 lakh shares
in open interest with significant increase in premium to 29.75
points from 10.05 points. On option fronts ; call options have
seen mixed trend while put options have witnessed writing
across the strikes suggesting limited downsides in the market.
HOT PICKS - SPICE TELE,NICHOLAS PIRAMAL,PORRITTS & SPENCER
Delivery
EDELWEISS CAP. : Short Term Target 1700+
IFCI : Target 150+
AMD Metplast(Rs.51.75) is being cornered by insiders. Watch for good gains in the short term
Buy MTNL Buy for a target of 215 and above for 4 days
Adlab target 2000
We have a moderately view on NTPC. We recommend a Covered Call strategy:
o Buy One NTPC Dec Fut @ 252 - 254
o Sell One NTPC Dec 260 CA @ 7.00 – 7.50
o BEP: 247
o Investment: Rs.1,56,000 (Approx)
o Time Frame: 8-10 Days
Maruti Buy 1050-1060 sl 1043.10 for target 1110-1120 for 2-3 Days
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
OUR TRADING CALL OF KS OILS ALSO FLARED ALMOST 10% OH GOD. WHAT A GAIN.
OUR BTST are NTPC,RNRL,PUNJLLOD,INDIAN OIL
The market is expected to open on a flat to positive note today.
However, profit booking from the higher levels cannot be ruled
out. Traders are advised to assume long positions from lower
support of 6150 and 6120 levels with final stop loss placed
below 6110 levels.However, Nifty witnessed
sharp bounce from the lower support of 6000 levels in the initial
hour of the trade itself. Buying in telecom pivotal assisted the
Nifty to test li fe time high at 6175 levels. Buying continued in
mid -cap stocks as indicated by strong market breadth at
797:377. Nifty December futures have seen fresh accumulation
of long positions ; December futures have added 40 lakh shares
in open interest with significant increase in premium to 29.75
points from 10.05 points. On option fronts ; call options have
seen mixed trend while put options have witnessed writing
across the strikes suggesting limited downsides in the market.
HOT PICKS - SPICE TELE,NICHOLAS PIRAMAL,PORRITTS & SPENCER
Delivery
EDELWEISS CAP. : Short Term Target 1700+
IFCI : Target 150+
AMD Metplast(Rs.51.75) is being cornered by insiders. Watch for good gains in the short term
Buy MTNL Buy for a target of 215 and above for 4 days
Adlab target 2000
We have a moderately view on NTPC. We recommend a Covered Call strategy:
o Buy One NTPC Dec Fut @ 252 - 254
o Sell One NTPC Dec 260 CA @ 7.00 – 7.50
o BEP: 247
o Investment: Rs.1,56,000 (Approx)
o Time Frame: 8-10 Days
Maruti Buy 1050-1060 sl 1043.10 for target 1110-1120 for 2-3 Days
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
Wednesday, December 12, 2007
GAP DOWN OPEN
The Market is likely to have negative opening, as the cues from global markets are not in favor. The market surged yesterday to hit new landmarks by creating a rally over the sectoral indices scrips on the back of heavy buying across the counters. Both the benchmark indices closed lifetime high with handsome gains.
Today, Nifty has support at 5,962 and resistance at 6,139 and BSE Sensex has support at 19,928 and resistance at 20,396
The Index of Industrial Production (IIP) data for October 2007 is due today, 12 November 2007. IIP had slumped 6.4% in September 2007 over 12% in September 2006. Industrial output moved down 9.2% in April-September 2007 compared with 11.1% in April-September 2006.
Stocks in News:
Wipro is looking to earn one-sixth of its global revenues by March 2009 from system integration business.
Pfizer's patent for new HIV follow up treatment drug Celzentry in India may face opposition from patient groups and NGOs.
Marico is currently test marketing hair oil, gel and shampoo for children.
ITC to provide supply solutions to help small stores place orders over mobile phones.
TV18 Group to buy a majority 53% stake in Infomedia India.
Ansal API receives UP government’s approval for two SEZs.
Jindal Drilling plans to divest 10% stake to fund expansion plans.
Nalco is investing Rs300bn over the next five years for setting up smelter and power plant in Indonesia.
SBI expects slowdown in personal loans by 5-10% in second half of FY08.
Shriram Transport Finance is looking at the replacement market to sustain its loan growth at 50% in H2 FY08.
Idea Cellular offers Rs16.5bn for additional 4.4MHz spectrum.
Reliance Industries to spend US$12bn to develop three gas basins.
IOC says it would stop fuel supply to the railways if the latter continues to insist on discounts.
United Phosphorus is set to bid for Australia's largest agriculture chemical company, Nufarm.
Tata Steel has entered into a joint venture with SODEMI for the developing Mount Nimba iron ore deposits in Ivory Coast in West Africa.
Suzuki announces that Maruti Suzuki India will make its next global car, the A-Star.
Mercator Lines raises about US$142.5mn from its listing at the Singapore stock exchange.
Reliance Industries sings contracts for exploration in two oil and gas blocks in Colombia.
Reliance Energy led consortium will contest Sea King while bidding for the Mumbai Trans-Harbour link.
Reliance Energy’s 4,000MW Shahapur project gets environment clearance.
L&T acquires 26% stake in New Delhi based consulting and engineering firm Feedback Ventures for Rs400mn.
JSW Energy invites bids for BoP package for its proposed 3x400MW coal fired power plant in Ratnagiri.
Commerce Minister Kamal Nath rules out any possibility of relaxation of land rules for SEZs.
The RBI may soon tighten norms for foreign exchange derivatives.
The Government is likely to extend Software Technology Parks of India scheme only to Indian ITES/BPO firms beyond 2009.
The Petroleum & Natural Gas Regulatory Board has urged the petroleum ministry to offer targeted subsidy on petrol, diesel, LPG and kerosene.
Today, Nifty has support at 5,962 and resistance at 6,139 and BSE Sensex has support at 19,928 and resistance at 20,396
The Index of Industrial Production (IIP) data for October 2007 is due today, 12 November 2007. IIP had slumped 6.4% in September 2007 over 12% in September 2006. Industrial output moved down 9.2% in April-September 2007 compared with 11.1% in April-September 2006.
Stocks in News:
Wipro is looking to earn one-sixth of its global revenues by March 2009 from system integration business.
Pfizer's patent for new HIV follow up treatment drug Celzentry in India may face opposition from patient groups and NGOs.
Marico is currently test marketing hair oil, gel and shampoo for children.
ITC to provide supply solutions to help small stores place orders over mobile phones.
TV18 Group to buy a majority 53% stake in Infomedia India.
Ansal API receives UP government’s approval for two SEZs.
Jindal Drilling plans to divest 10% stake to fund expansion plans.
Nalco is investing Rs300bn over the next five years for setting up smelter and power plant in Indonesia.
SBI expects slowdown in personal loans by 5-10% in second half of FY08.
Shriram Transport Finance is looking at the replacement market to sustain its loan growth at 50% in H2 FY08.
Idea Cellular offers Rs16.5bn for additional 4.4MHz spectrum.
Reliance Industries to spend US$12bn to develop three gas basins.
IOC says it would stop fuel supply to the railways if the latter continues to insist on discounts.
United Phosphorus is set to bid for Australia's largest agriculture chemical company, Nufarm.
Tata Steel has entered into a joint venture with SODEMI for the developing Mount Nimba iron ore deposits in Ivory Coast in West Africa.
Suzuki announces that Maruti Suzuki India will make its next global car, the A-Star.
Mercator Lines raises about US$142.5mn from its listing at the Singapore stock exchange.
Reliance Industries sings contracts for exploration in two oil and gas blocks in Colombia.
Reliance Energy led consortium will contest Sea King while bidding for the Mumbai Trans-Harbour link.
Reliance Energy’s 4,000MW Shahapur project gets environment clearance.
L&T acquires 26% stake in New Delhi based consulting and engineering firm Feedback Ventures for Rs400mn.
JSW Energy invites bids for BoP package for its proposed 3x400MW coal fired power plant in Ratnagiri.
Commerce Minister Kamal Nath rules out any possibility of relaxation of land rules for SEZs.
The RBI may soon tighten norms for foreign exchange derivatives.
The Government is likely to extend Software Technology Parks of India scheme only to Indian ITES/BPO firms beyond 2009.
The Petroleum & Natural Gas Regulatory Board has urged the petroleum ministry to offer targeted subsidy on petrol, diesel, LPG and kerosene.
Tuesday, December 11, 2007
FII buying slows down
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
Today, Nifty has support at 5,908 and resistance at 6,039 and BSE Sensex has support at 19,773 and resistance at 20,278.The market is likely to open on a positive note tracking firm Asian markets in current trades and the gains in the US markets. The global crude oil prices trading near $88 and strong FII inflows may boost the market sentiment. Among the local , the Nifty could test 6,200 on the upside and may slip to 5,750 on the downside. The Sensex has a likely support at 19,300 and may face resistance at 21,000
Midcaps are flying across the board with new stocks joining them every day.Things continue to look bullish as the markets are in the hands of domestic operators and HNI's. Slowly getting into cash is not a bad idea
Breaking 20,000 appears to be a difficult task but it only a matter of days. A break will give us couple of thousand point rally in no time. Sugar, Hotels and Textiles are in the front seat in yesterday's midcap run.
Reliance likely to acquire a global retail chain
Alok Indutries jumped big time and we were bullish on this stock from last month
Alok Industries(Rs.91.25) is likely to shoot towards 125 levels. De-merger news is boosting the stock price.
HOT PICKS - RADICO KHAITAN,YES BANK,BILT,PVR
SUBSCRIBER NOW TO KNOW MORE
FOR OUR SUBSCRIBER'S ONLY
Today, Nifty has support at 5,908 and resistance at 6,039 and BSE Sensex has support at 19,773 and resistance at 20,278.The market is likely to open on a positive note tracking firm Asian markets in current trades and the gains in the US markets. The global crude oil prices trading near $88 and strong FII inflows may boost the market sentiment. Among the local , the Nifty could test 6,200 on the upside and may slip to 5,750 on the downside. The Sensex has a likely support at 19,300 and may face resistance at 21,000
Midcaps are flying across the board with new stocks joining them every day.Things continue to look bullish as the markets are in the hands of domestic operators and HNI's. Slowly getting into cash is not a bad idea
Breaking 20,000 appears to be a difficult task but it only a matter of days. A break will give us couple of thousand point rally in no time. Sugar, Hotels and Textiles are in the front seat in yesterday's midcap run.
Reliance likely to acquire a global retail chain
Alok Indutries jumped big time and we were bullish on this stock from last month
Alok Industries(Rs.91.25) is likely to shoot towards 125 levels. De-merger news is boosting the stock price.
HOT PICKS - RADICO KHAITAN,YES BANK,BILT,PVR
SUBSCRIBER NOW TO KNOW MORE
Monday, December 10, 2007
Markets to open flat to low
SUBSCRIBER NOW TO KNOW MORE
Nifty has support at 5940, 5880 and 5820 levels and will face resistance at 6040, 6065 and 6115. Closing above 6065 and also sustaining above the same may result in fireworks and change the picture in total favour of the bulls. On the downside, 5680 will be the critical level to watch out for
Foreign institutional investors' net sold equity worth Rs 253.84 crore on Friday while mutual funds were net buyers of equity worth Rs 339.64 crore, according to provisional data on NSE
Though the bulls managed to lift the Sensex and the Nifty above 20k and 6k, respectively, they could not hold those levels owing to some profit booking. The same scenario may play out this week as well. The undertone is largely positive, but the trend will remain choppy and the key indices are likely to consolidate after reaching new lifetime highs.
Today, we expect the key indices to be cautious to slightly higher at the opening bell, though the rally in small- and mid-cap shares may continue. But one has to be weary of the spurt in small- and mid-cap stocks, as a steep fall may leave one high and dry
Sensex appears to struggle to close above 20k and today might be the day of the record.IT stocks swung into action with the second rung stocks making come back after a long time
Fed is likely to go ahead with a 25 basis point cut next week and the same is factored in. Definitely the downsides appear to be capped and the major depends on the liquidity and with the holiday season coming up do not expect a run away rally
Reliance Power may be forced to push its initial public offering (IPO) to early next year, as the Securities and Exchange Board of India (Sebi) is still grappling with the fine print of the red herring prospectus.
Buying was observed in Royal Orchid(Rs.146.95)
OUR Picks STERLITE OPTICALS,ROLTA, NAGARJUNA FERTILIZERS,MARUTI,TRIVENI ENGG,ICICIBANK,RCOM
STILL THINKING FOR A REASON TO JOIN US
Nifty has support at 5940, 5880 and 5820 levels and will face resistance at 6040, 6065 and 6115. Closing above 6065 and also sustaining above the same may result in fireworks and change the picture in total favour of the bulls. On the downside, 5680 will be the critical level to watch out for
Foreign institutional investors' net sold equity worth Rs 253.84 crore on Friday while mutual funds were net buyers of equity worth Rs 339.64 crore, according to provisional data on NSE
Though the bulls managed to lift the Sensex and the Nifty above 20k and 6k, respectively, they could not hold those levels owing to some profit booking. The same scenario may play out this week as well. The undertone is largely positive, but the trend will remain choppy and the key indices are likely to consolidate after reaching new lifetime highs.
Today, we expect the key indices to be cautious to slightly higher at the opening bell, though the rally in small- and mid-cap shares may continue. But one has to be weary of the spurt in small- and mid-cap stocks, as a steep fall may leave one high and dry
Sensex appears to struggle to close above 20k and today might be the day of the record.IT stocks swung into action with the second rung stocks making come back after a long time
Fed is likely to go ahead with a 25 basis point cut next week and the same is factored in. Definitely the downsides appear to be capped and the major depends on the liquidity and with the holiday season coming up do not expect a run away rally
Reliance Power may be forced to push its initial public offering (IPO) to early next year, as the Securities and Exchange Board of India (Sebi) is still grappling with the fine print of the red herring prospectus.
Buying was observed in Royal Orchid(Rs.146.95)
OUR Picks STERLITE OPTICALS,ROLTA, NAGARJUNA FERTILIZERS,MARUTI,TRIVENI ENGG,ICICIBANK,RCOM
STILL THINKING FOR A REASON TO JOIN US
Friday, December 7, 2007
Time to buy or exit - only for Clients
Still waiting for subscriptions ?? great ??
OUR BTST - BHARATI AIRTEL
Nifty (5955) Sup 5902 Res 6036
The Sensex and the Nifty may close above 20k and 6k, respectively today. Trading will be choppy as investors may develop cold feet with the indices at new lifetime highs. Small-cap and Mid-cap stocks will continue to hog the limelight. We expect another strong start and hopefully, a better closing than yesterday.
FII Gross purchases Rs 5515 Cr, Gross sales Rs 4434 Cr, Net Buyers Rs 1081 Cr.
MF Gross Purchases Rs 1098 Cr, Gross Sales Rs 1290 Cr, Net Sellers Rs 192 Cr.
Stocks in News:
Eicher Motors could attract attention amid reports that it could form a JV with Swedish CV major Volvo.
Reliance Communications gets all-India GSM license from DoT. (ET)
Glaxo pulls-out patent applications of two anti-AIDS medicines in India. (ET)
Bank of England reduced interest rates indicating that Fed rate cut is almost on cards. Though the market is discouting 25 basis point cut Bull run always looks for an excuse for big jumps.
Unitech is another stock in limelight after the company announced the plans of major expansion and de-merger of the retail business
Gammon India(Rs.600.20) is in the buy list of savy funds. WE expect 700 levels soon
STOCK ON RADAR - IDEA,UNITECH,BHARATI,HTML GLOBAL.........
SUBSCRIBER NOW TO KNOW MORE
OUR BTST - BHARATI AIRTEL
Nifty (5955) Sup 5902 Res 6036
The Sensex and the Nifty may close above 20k and 6k, respectively today. Trading will be choppy as investors may develop cold feet with the indices at new lifetime highs. Small-cap and Mid-cap stocks will continue to hog the limelight. We expect another strong start and hopefully, a better closing than yesterday.
FII Gross purchases Rs 5515 Cr, Gross sales Rs 4434 Cr, Net Buyers Rs 1081 Cr.
MF Gross Purchases Rs 1098 Cr, Gross Sales Rs 1290 Cr, Net Sellers Rs 192 Cr.
Stocks in News:
Eicher Motors could attract attention amid reports that it could form a JV with Swedish CV major Volvo.
Reliance Communications gets all-India GSM license from DoT. (ET)
Glaxo pulls-out patent applications of two anti-AIDS medicines in India. (ET)
Bank of England reduced interest rates indicating that Fed rate cut is almost on cards. Though the market is discouting 25 basis point cut Bull run always looks for an excuse for big jumps.
Unitech is another stock in limelight after the company announced the plans of major expansion and de-merger of the retail business
Gammon India(Rs.600.20) is in the buy list of savy funds. WE expect 700 levels soon
STOCK ON RADAR - IDEA,UNITECH,BHARATI,HTML GLOBAL.........
SUBSCRIBER NOW TO KNOW MORE
Thursday, December 6, 2007
POWER STOCK IN DEMAND
SUBSCRIBER NOW TO KNOW MORE
OUR BTST - BANK NIFTY, POWERGRID, GAIL,
The market is expected to open on a positive note today;
traders are advised to assume long positions if Nifty sustains
above 5995 levels else from lower supports of 5940 for upside
targets of 6050 and 6125 levels.
FII Gross purchases Rs 3974 Cr, Gross sales Rs 3954 Cr, Net Buyers Rs 20 Cr.
MF Gross Purchases Rs 1028 Cr, Gross Sales Rs 1062 Cr, Net Sellers Rs 34 Cr
Nifty December futures witnessed long accumulation; it added 6 lakh shares in open
interest on the back of premium increasing significantly to 37.15
points. The overall market has seen addition of 2.84 percent of
open interest on the back of increasing cost of carry indicating
positive sentiments prevailing. On the options front call options
have seen fresh buying while put options have witnessed
shorting indicating limited downsides form the current levels.
We have a moderately bullish view on IDBI. We recommend a bull call spread strategy:
o Buy One IDBI Dec 180 CA @ 9.50 – 10.50
o Sell One IDBI Dec 190 CA @ 6.50 – 7.50
o BEP: 183
o Investment: Rs.1,30,000 (Approx)
o Time Frame: 5-6 Days
IDBI Buy at 175 sl 172.10 for target 183-185 for 5-6 Days
Watch for big moves from MTNL and Alok Industries soon
RED HOT STOCK POWER GRID,INDUSIND BANK ,DCB, GAIL NTPC,RNRL
STILL THINKING FOR A REASON TO JOIN US
OUR BTST - BANK NIFTY, POWERGRID, GAIL,
The market is expected to open on a positive note today;
traders are advised to assume long positions if Nifty sustains
above 5995 levels else from lower supports of 5940 for upside
targets of 6050 and 6125 levels.
FII Gross purchases Rs 3974 Cr, Gross sales Rs 3954 Cr, Net Buyers Rs 20 Cr.
MF Gross Purchases Rs 1028 Cr, Gross Sales Rs 1062 Cr, Net Sellers Rs 34 Cr
Nifty December futures witnessed long accumulation; it added 6 lakh shares in open
interest on the back of premium increasing significantly to 37.15
points. The overall market has seen addition of 2.84 percent of
open interest on the back of increasing cost of carry indicating
positive sentiments prevailing. On the options front call options
have seen fresh buying while put options have witnessed
shorting indicating limited downsides form the current levels.
We have a moderately bullish view on IDBI. We recommend a bull call spread strategy:
o Buy One IDBI Dec 180 CA @ 9.50 – 10.50
o Sell One IDBI Dec 190 CA @ 6.50 – 7.50
o BEP: 183
o Investment: Rs.1,30,000 (Approx)
o Time Frame: 5-6 Days
IDBI Buy at 175 sl 172.10 for target 183-185 for 5-6 Days
Watch for big moves from MTNL and Alok Industries soon
RED HOT STOCK POWER GRID,INDUSIND BANK ,DCB, GAIL NTPC,RNRL
STILL THINKING FOR A REASON TO JOIN US
Wednesday, December 5, 2007
Technical picks
MoserBaer - MoserBaer had made a double top earlier
around 340 levels, and slipped sharply
from the highs. It is currently trading
around the major support level which is
also a double bottom for the stock around
240 levels. The stock has found support
and has reverted back with an increase in
volumes, suggesting an excellent bottomfishing
opportunity in the stock. The
leading indicator like 14-day RSI has given
a strong buy signal, as it bottomed out
around the oversold territory. However,
the stock currently is trading below all the
major moving averages barring the 200-
day EMA, from where we had earlier seen
a bounce back in the stock. The stock may
face trouble around 280 levels on the
upsides above which it could witness a
unidirectional movement towards its all
time high levels of 350. This stock is an
excellent bottom fishing pick from the
current levels. All long positions in the
stock should be protected with a stop loss
placed below 238 levels on a closing basis
DLF - DLF had been consolidating lately around
its rock solid support zone of 850-900 levels.
The stock made a high of 999 in the recent
past. However, profit booking forced the
stock to test lower levels of 800. The stock
is currently consolidating around the 900
mark and a further decline in the stock is
largely ruled out. The 14-day RSI is hovering
around the oversold territory and hasgenerated a
strong buy signal from the current levels.
Immediate resistance isplaced at around the all time
high levels. A sustained close above that level will
induce fresh buying interest in thestock which might
guide it to test new highs of 1080-1100 levels.
The 50-day EMA level is placed at around 850
levels which is unlikely to be broken in the near term.
Investors are advised to assume long positions in the
stock in the range of 900-925 levels for a medium term
target of 1050 and 1100 levels. All long positions in the
stock should be protected with a stop loss placed below
840 levels on a closing basis.
Cinemax - declared its 2QFY08 resultswhich were lower
than our expectations.This was due to a delay in the
launch ofits new properties as compared to our
expectations. The delays have been due to mix of
late handing over of properties,delay in getting
the fit-outs done and getting the specific clearances
like no objection certificates from the municipal
authorities. The company has currently
15 properties under operation with 44
screens and 12,057 seats. The topline of
the company grew by 7.5%, while the bottomline rose
by 36.8% QoQ on account of larger number of
screens under operation. The company also
reported a 70% QoQ jump in its other income from
Rs.8.9 mn to Rs.15.1 mn, thereby aiding its bottomline
growth. As the company was listed in (2H FY07), the
corresponding figures of (2QFY07) are not available for
comparison. Moving forward, they now have pushed back
the launch of new properties on account of various reasons
as outlined. On an average, we now estimate that upcoming
properties may be delayed by a quarter. Hence, we have revised
our FY08E and FY09E topline numbers. Our FY08 sales
are revised downwards by 17% from Rs.1,580 mn to
Rs.1,306 mn, while FY09 sales from Rs.2,864 mn to
Rs.2,414 mn. Inspite of this reduction in our estimates,
we still rate Cinemax as a ‘BUY’ with a reduced price target
of Rs.168 against our previous target of Rs. 200. The
stock currently trades 15.2x FY08E and 8.7x FY09E. The
revised price target implies a 41% upside from the current
market price and is at 12.3x FY09 estimated earnings.
around 340 levels, and slipped sharply
from the highs. It is currently trading
around the major support level which is
also a double bottom for the stock around
240 levels. The stock has found support
and has reverted back with an increase in
volumes, suggesting an excellent bottomfishing
opportunity in the stock. The
leading indicator like 14-day RSI has given
a strong buy signal, as it bottomed out
around the oversold territory. However,
the stock currently is trading below all the
major moving averages barring the 200-
day EMA, from where we had earlier seen
a bounce back in the stock. The stock may
face trouble around 280 levels on the
upsides above which it could witness a
unidirectional movement towards its all
time high levels of 350. This stock is an
excellent bottom fishing pick from the
current levels. All long positions in the
stock should be protected with a stop loss
placed below 238 levels on a closing basis
DLF - DLF had been consolidating lately around
its rock solid support zone of 850-900 levels.
The stock made a high of 999 in the recent
past. However, profit booking forced the
stock to test lower levels of 800. The stock
is currently consolidating around the 900
mark and a further decline in the stock is
largely ruled out. The 14-day RSI is hovering
around the oversold territory and hasgenerated a
strong buy signal from the current levels.
Immediate resistance isplaced at around the all time
high levels. A sustained close above that level will
induce fresh buying interest in thestock which might
guide it to test new highs of 1080-1100 levels.
The 50-day EMA level is placed at around 850
levels which is unlikely to be broken in the near term.
Investors are advised to assume long positions in the
stock in the range of 900-925 levels for a medium term
target of 1050 and 1100 levels. All long positions in the
stock should be protected with a stop loss placed below
840 levels on a closing basis.
Cinemax - declared its 2QFY08 resultswhich were lower
than our expectations.This was due to a delay in the
launch ofits new properties as compared to our
expectations. The delays have been due to mix of
late handing over of properties,delay in getting
the fit-outs done and getting the specific clearances
like no objection certificates from the municipal
authorities. The company has currently
15 properties under operation with 44
screens and 12,057 seats. The topline of
the company grew by 7.5%, while the bottomline rose
by 36.8% QoQ on account of larger number of
screens under operation. The company also
reported a 70% QoQ jump in its other income from
Rs.8.9 mn to Rs.15.1 mn, thereby aiding its bottomline
growth. As the company was listed in (2H FY07), the
corresponding figures of (2QFY07) are not available for
comparison. Moving forward, they now have pushed back
the launch of new properties on account of various reasons
as outlined. On an average, we now estimate that upcoming
properties may be delayed by a quarter. Hence, we have revised
our FY08E and FY09E topline numbers. Our FY08 sales
are revised downwards by 17% from Rs.1,580 mn to
Rs.1,306 mn, while FY09 sales from Rs.2,864 mn to
Rs.2,414 mn. Inspite of this reduction in our estimates,
we still rate Cinemax as a ‘BUY’ with a reduced price target
of Rs.168 against our previous target of Rs. 200. The
stock currently trades 15.2x FY08E and 8.7x FY09E. The
revised price target implies a 41% upside from the current
market price and is at 12.3x FY09 estimated earnings.
Time for IT to move
STILL THINKING FOR A REASON TO JOIN US
OUR BTST JP ASSOCIATES watch out for today
Today, Nifty has support at 5,765 and resistance at 5,908 and BSE Sensex has support at 19,529.50 and resistance at 19,691.
Turnover in F&O segment rises
Nifty December 2007 futures were at 5889, at a premium of 30.65 points as compared to the spot closing of 5858.35.
The NSE's futures & options (F&O) segment turnover was Rs 56,330.05 crore, which was higher than Rs 54,816.50 crore on Monday, 3 December 2007.
Stock on radar HCC,ESSAR STEEL, BATA INDIA,TTML
Buy TTML for a target of 58 and above for 5 days
SUBSCRIBER NOW TO KNOW MORE
OUR BTST JP ASSOCIATES watch out for today
Today, Nifty has support at 5,765 and resistance at 5,908 and BSE Sensex has support at 19,529.50 and resistance at 19,691.
Turnover in F&O segment rises
Nifty December 2007 futures were at 5889, at a premium of 30.65 points as compared to the spot closing of 5858.35.
The NSE's futures & options (F&O) segment turnover was Rs 56,330.05 crore, which was higher than Rs 54,816.50 crore on Monday, 3 December 2007.
Stock on radar HCC,ESSAR STEEL, BATA INDIA,TTML
Buy TTML for a target of 58 and above for 5 days
SUBSCRIBER NOW TO KNOW MORE
Tuesday, December 4, 2007
Midcaps and only midcaps will be the highlight of this month
OUR ESSAR OIL , HIND OIL , ISPAT , MERCATOR LINE , HITTING OUR TARGET EVERYDAY
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
The market is expected to open on flat to positive note today;
traders are advised to assume long position if Nifty sustains
above 5850 levels for upside targets of 5900 and 5950 levels.
Alternatively, the y can assume long position from lower support
of 5800 levels with a final stop loss placed at 5780 levels.
Nifty December futures open interest remained flat with premium decreased to 11.45 points from 40.75 points suggesting closure of long and fresh build up
of short positions. On the options front both call and put option
has witnessed accumulation of long position indicating volatility
is expected increase in the near term; Nifty 6200 call option
seen highest addition of 3 lakh shares in open interest
Alok Industries a huge rally in the offing due to demerger).
Watch out for TATA TEA, WELSPUN GUJARAT, ESSAR SHIPPING,RNRL, INOX LEISURE,
GUJARAT NRE COKE
JHS Svendgaard(Rs.57.60) is likely to shoot up towards 70 levels.
Rcom Buy Above 720 sl 710 for target 735-738 for 1-2 Days
Buy MTNL for a target of 190 and above for 1-2 days
We have a Rangebound view in Nifty. We recommend a Short Strip strategy:
o Sell Two Nifty Dec 5400 PE @ 78 - 82
o Sell One Nifty Dec 6000 CE @ 100 - 104
o UBEP: 6262
o LBEP: 5138
o SL: 350 (Total Premium)
o Investment: Rs.95,000 (Approx)
o Time Frame: 8 – 10 Days
SUBSCRIBER NOT TO KNOW MORE
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
The market is expected to open on flat to positive note today;
traders are advised to assume long position if Nifty sustains
above 5850 levels for upside targets of 5900 and 5950 levels.
Alternatively, the y can assume long position from lower support
of 5800 levels with a final stop loss placed at 5780 levels.
Nifty December futures open interest remained flat with premium decreased to 11.45 points from 40.75 points suggesting closure of long and fresh build up
of short positions. On the options front both call and put option
has witnessed accumulation of long position indicating volatility
is expected increase in the near term; Nifty 6200 call option
seen highest addition of 3 lakh shares in open interest
Alok Industries a huge rally in the offing due to demerger).
Watch out for TATA TEA, WELSPUN GUJARAT, ESSAR SHIPPING,RNRL, INOX LEISURE,
GUJARAT NRE COKE
JHS Svendgaard(Rs.57.60) is likely to shoot up towards 70 levels.
Rcom Buy Above 720 sl 710 for target 735-738 for 1-2 Days
Buy MTNL for a target of 190 and above for 1-2 days
We have a Rangebound view in Nifty. We recommend a Short Strip strategy:
o Sell Two Nifty Dec 5400 PE @ 78 - 82
o Sell One Nifty Dec 6000 CE @ 100 - 104
o UBEP: 6262
o LBEP: 5138
o SL: 350 (Total Premium)
o Investment: Rs.95,000 (Approx)
o Time Frame: 8 – 10 Days
SUBSCRIBER NOT TO KNOW MORE
Monday, December 3, 2007
$200 million pulled out of India
Indian markets are likely to open in the positive and Stock specific activity is likely to continue with sector. Nifty looks all set to break the resistance in 5840 –5850 range. Then usual profit booking which we see again, Global markets are in better shape and oil prices are hovering around the US$89 per barrel mark. Auto stocks will attract some attention due to the release of the monthly sales data. Maruti has reported strong numbers. Hero Honda has managed to beat the negative growth trend in the two-wheelers segment. IFCI will be in action as a financial daily reports that it has decided to sell up to 20% stake to IFC, the World Bank's private arm.
Reliance Energy will remain in the limelight. The promoters have decided to inject Rs80bn in the company to help it fund the two UMPPs at Sasan and Krishnapatnam
Realty is likely to perform this month
Mid cap stock on fire watch out for it to know more subscribe
RNRL to see more than double centuary in december
ADAG owned Reliance Energy is said to be recieving Rs.8,000 crores from the promoters.
GMR Infrastructure is eying for an international airport in the central Europe. The stock is likely to be in action in the coming days
Land sale is likely to ignite MTNL(Rs.171.85) stock. Watch for a big move above the double century mark.
Alok Industries Buy for a target of 85 and above for 5 days
Stock to watch RELIANCE ENERGY,HIND OIL,MERCATOR LINE, HOTEL LEELA
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
Reliance Energy will remain in the limelight. The promoters have decided to inject Rs80bn in the company to help it fund the two UMPPs at Sasan and Krishnapatnam
Realty is likely to perform this month
Mid cap stock on fire watch out for it to know more subscribe
RNRL to see more than double centuary in december
ADAG owned Reliance Energy is said to be recieving Rs.8,000 crores from the promoters.
GMR Infrastructure is eying for an international airport in the central Europe. The stock is likely to be in action in the coming days
Land sale is likely to ignite MTNL(Rs.171.85) stock. Watch for a big move above the double century mark.
Alok Industries Buy for a target of 85 and above for 5 days
Stock to watch RELIANCE ENERGY,HIND OIL,MERCATOR LINE, HOTEL LEELA
LOTS OF OTHER INTRADAY,BTST,INVESTMENT CALLS
FOR OUR SUBSCRIBER'S ONLY
Subscribe to:
Posts (Atom)