Global Markets make a come back

(27-11-2009 10:13:28): Buy minifty at 4850-4855 sl 4800 hold btst.wait for level to come for buy

Book nifty today in good Profits

Dalal Street will open in the positive zone after hit strongly courtesy UAE central bank's commitment to stand behind debt hit local and foreign banks by opening new lending window to banks.

Indian markets like other global markets are waiting for an oppurtunity to correct after flirting with the over bought zones. The massive bull rally unfolded in March, driven by excessive liquidity flows across the globe.

Time for investors to step back

While no one denies the fact that we are in for a multi year bull run, one should be cautious investing in the current global economic scenario with ripples of credit hit crises hitting the capital markets in bouts.

Realty space to get hit

Realty space will be the worst hit again given the huge rally in the last few months. These stocks are prone to corrections more than rest of the stocks. Investors are advised to go slow and try to avoid the sector in the next 2-3 months.

We are in for a corrective market in the next 1 to 2 quarters with consolidation mantra gaining momentum

Dubai World default to rattle investors on Dalal Street

Stocks are set to crash in the first hour of trade on the first day of new F&O series. A possible default by Dubai World on its dent might cause tremors in the Indian market. Expect the benchmark index or the Sensex to give up more than 2 percent for the day.

There was blood bath in the European markets on Thursday as fears of a potential default in Dubai sent shock waves through financial markets weighing on European equities.The U.S. dollar off of recent lows as investors sought out safe havens. Asian markets are in red for the second day in a row with Nikkei, Shanghai and Hangseng losing between 2 to 3 percent for the day. One can expect this sentiment to rub off on stocks in Dalal Street.

We advice investors to stay away from Real Estate stocks as there is a likely hood of these stocks getting hammered in the open. We recommend shorting stocks like Unitech, DLF and HDIL as we might see a big fall in this space in the coming days. Investors also should think about cutting their exposure to private banks, especially Yes Bank and Kotak Bank.

Engineering is another space that might take a hit with Dubai World default, as there companies like L&T, Punj Lloyd, Voltas and many other who has exposure to Dubai. These stocks might be hit as there is less likelihood of new business in the near future and also a possibility that they might get stuck collecting their dues.

We advice investors to sit out of the market till the new year and take a call on markets at a later date. We do not recommend bottom fishing or shorting at this time, with the exception of some Realty counters.

Markets to pull back on profit booking

The Indian stock markets are getting ready for another flat day with a negative bias, after ending little changed for the past few sessions. We expect the markets to trade in a band of 17,150 and 17,300 for the day

FMCG and Oil & Gas were the winners from yesterday's trade, while Healthcare and Realty were the laggards. Auto stocks like Hero Honda and Maruti onitnued their up trend on Wednesday. We recommend booking partial profits in Hero Honda, Maruti and Tata Motors, as we believe that there might be a snap back in share prices in the near term.

There was some fund buying in FMCG stocks like ITC and HLL today and this looks like a one time event and we do not see any follow up buying in these stocks. The new listing Astec Life Sciences closed up 2 percent from the issue price at Rs 84. We do not like the fundamentals of the company, but reserve our comments from a trading perspective especially after the kind of move we have seen in Think Soft.

Hilton Metal, Atlanta, Plethico Pharma and Midcap IT counters like KPIT Cummins and Mastek were active yesterday. We recommend staying out of the market for now, as the trend is not clear yet and with the F&O expiry ahead it is tough to take a call on the markets from an intra-day perspective. Overall, we expect a negative open and a flat close for the day.

Markets to trade in a narrow band for the second day in a row

Stocks in Mumbai are headed for another day of lacklustre trade ahead of the expiry in couple of days. We are likely to see the indices trading in a narrow band with the Nifty hovering in 5,050 and 5,100 band in sub-dued trade

Auto stocks were in limelight on news reports that there will be a price hike by major manufacturers in the near term. Maruti. M&M and Tata Motors helped the sectoral index gain 1.45 percent for the day. Metals stocks took a breather yesterday as investors booked profits in Steel stocks.

We see banking stocks losing ground today after remaining week yesterday. We advice investors to trim their holdings in ICICI Bank and SBI for now, as they might get a good entry point at lower levels. Auto Ancilliary stocks were in demand as there was some fund buying in this sector. Stocks like Easun Reyrolle, Eveready Ind were in demand.

Max India's stock gained more than 7 percent to Rs 227 on hopes of value unclocking in insurenace arm of the company. We see the stock doubling in the next 18 months. One can enetr in to the stock on some consolidation at current levels. There are no day trading ideas for today, as we think that it is a good idea to take a break from the markets once in a while

Markets to Consolidate at current levels

Stocks on Dalal Street are likely to open flat to negative after two consecutive days of big gains. Even though the market has technically breached the 5,100 mark which is considered as a crucial level according to most of the chartists on the street, we believe that there is lot of resistance at these levels and big upside is ruled out, atleast for the current expiry

Yesterday's move in the markets was mainly due to the gains in big boys like Reliance and ITC. We have not seen broader participation in the market, which is a concerning factor. The Banking pack, which has performed well in the previous session, was subdued as investors booked profits in this space.

Select technology counters were on fire with the likes of HCL Tech and Patni registering decenet gains. HCL Tech gained more than 5 percent on the news of $200 million insurance order, while stake sale news helped Patni gain 5 percent to close at Rs 466. We recommend selling this stock at RS 478 level. Telecom story is worsening day by day with Bharti, Rel com and Idea losing ground even in a positive market. These stocks have become favorite destination for short sellers and further downside is not ruled out.

Mahindra Forgings, GMDC, Tata Sponge and Omnitech Info were among the stocks that have attracted investor attention on Monday. Mphasis is one stock that should be closely watched for traders looking to take a bullish stance. The stock has been hammered to Rs 690 level in the past few sessions and is looking over sold at these levels. One could look to buy the stock for a target of Rs 720

Reliance Watch

Reliance Industries has made "a preliminary non-binding offer" to acquire LyondellBasell, the world's third largest petrochemical company, based in Rotterdam, Netherlands for upto US$12bn

Bulls will hope for a bounce back at regular intervals during the interim rough patch being seen on the bourses. At the same time bears will continue to scout for money making opportunities. One should remain on guard as volatility could escalate ahead of Thursday’s F&O expiry. Don’t get hurt while the bull-bear tussle is on.

The Nifty is likely to oscillate between 5100 and 4900 depending on the newsflow and fund flows

For India, the big event will be Q2 GDP data, which will be released on Nov. 30. This will be followed by quarterly results and RBI's policy review in January and Budget in February.

Reliance Industries Ltd. (RIL) would be in the spotlight today after making a bid for LyondellBasell Industries.

Essar Oil Ltd. may also rise after a report that Royal Dutch Shell Plc is acquiring a 10% stake in the company as part of a deal to sell three refineries to the Indian company.

Sugar stocks will remain in focus after the Government dumped a controversial clause in the proposed sugar ordinance.

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Indian stock markets are likely to be under pressure on Friday for the second day in a row following a sea of red in global equity markets over night. Expect the benchmark index or the Sensex to shed another 100 points in today's session.

Metals stocks are likely to be hit very hard following a rise in the dollar and we predict this sector to react sharply in the event of a crash in the markets. Stay away from counters liek Sesa Goa, Sterlite Ind and Tata Steel for the time being. Realty stocks might take another round of beating after topping the losers list yesterday.

We advice investors to hold on to quality stocks and also book partial profits. We are likely to see a lower open probably by 30 points on the Nifty and we might see the market trading in a band there after. NDTV is the stock that is looking good at RS 134 levels after selling stake to U.S based Scripps network in NDTV Life Style.

We have seen some speculative moves in stocks like BPL, Raj Oil and Resurgere mines. We advice caution on these stocks. Investors who have entered these stocks at lower levels should get rid them on every raise from here on. Sugar companies look like a good 'short' at current levels after the Govt decision to raise the Sugarcane prices offered to the farmers. GVK Power and GMR Infra might offer some decent returns for bears, who would like to be on the short si