Monday, February 9, 2009

US stimulus plan to give a jolt to the Sensex

Budget Expectation :1. Security Transaction Tax - Will be out of the Market for the boost of Capital market.

2. Dividend Distribution Tax likely abolished.

3. Short Term Capital Tax likely reduced from 15% to 10% or 5%.

Airline stocks like Jet Airways, Spice Jet and Kingfisher Airlines might see some early gains on the news that Kingfisher Airlines might sell 25 percent stake for nearly Rs 2000 crore giving it a hefty valuation over the prevailing marketprice of Rs 32.

SEBI later this week has released the list of companies that have pledged shares to avail loans from banks and financial institutions.Aban Offshore, Asian Paints, Dr Reddy’s Lab, Godrej Consumer Products, Great Offshore and JB Chemicals are names of some of the more prominent companies whose promoters have pledged shares against loans availed by them.

Banking, Metal and Realty stocks are likely to be the leaders in today's market. We see both the indices opening sharply higher and consolidate from there on. So it is not a great idea for the day traders to jump in, in the morning and take positions. Overall, a positive day for the market in the offing, on the first trading day of the week

HCL Technologies
We recommend a buy in HCL Technologies from a short-term trading horizon. It is evident from the charts of HCL Technologies that it had been on an intermediate-term downtrend from its September 2008 high of Rs 261 till its January 2009 low of Rs 102. However, the stock reversed direction, after taking support at Rs 102, which is a significant medium-term support level. Since then, the stock has been on a short-term uptrend. This trend reversal has been supported by a prolonged positive divergence in the weekly relative strength index (RSI). In late January, the stock breached its intermediate-term down trendline as well as 21-day moving average. Moreover, recently the stock crossed over its 50-day moving average and is trading well above the averages. The daily RSI is rising in the neutral region towards the bullish zone and the weekly RSI has entered the neutral region from the bearish zone. Our short-term forecast is bullish for the stock. We anticipate it to move up until it hits our price target of Rs 140 in the forthcoming trading session. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 119.