Time for another plunge ?or BLACK MONDAY

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Due Global conditions we are expected to open negative today butwith a gap down

On the downside we find immediate support at 5200 but that is not expected to be held, and we may drag down straight between 5110 - 5130.


The zone between 5110- 5130 should act as a good support and any break below this and trade below this level for sometime can create panic and we could see 4880 - 4920on Nifty.

The zone between 5360 - 5410 is acting as a very good resistance and many time I kept on saying that. And why we say that --- see market is taking reversal either coming nearer to this zone or by entering and then reversing. Let us have a few look at it

On 25th Jan market saw a high of 5399 and close at 5383. and then on 28 Jan (as 26 and 27 Jan we holidays) we saw market reversing even came down to 5071 but closed at 5274 The next day 29 Jan again market went high to 5391 then again reversal happened and market close at 5280

On 4th Feb Market again tried to cross 5400 and this time it was successful and even went high up to 5545 but then close at 5463 and the next trading day (6th Feb) we saw reversal and market came down and close at 5322 by hitting a low of 5257

On 19th Feb, market went high to 5368 and then it saw a reversal from there and from there market went down to as low as 5116 on 20th Feb.

And recently on 27 Feb, market again went high again to 5368 and then a reversal from there made market went low to 5098 on 29 Feb.

Let market give the direction clear and then enter. Expected to play between 5110 - 5200 any side breakout should then be carefully taken

Chidambaram, Indian Finance Minister as expected announced more reforms, wasting a golden oppurtunity to boost the reeling Dalal Street. Though there were not much of expectations from the budget this year negative global cues might have a say on the street today. Trading volumes reduced by as much as 30 percent in the last two months. Brokerage stocks are likely to be impacted negatively on the news of increase of STT.

Few midcaps are likely to continue the run on positive implications from the budget. Indian markets are going through a bad patch, inline with their global peers. We are still positive on the economy and favour the Bulls. We expect a worst case scenario of BSE Sensex slipping to 14,000 levels in case of a recession. But value investors should not be concerned about the same.

Watch for VSNL (Tata Communications), Tata Teleservices and GTC Industries in today's trade

Stock in news - GTC Industries, ICSA, Kinetic Engineering,Tata Teleservices, VSNL are the stocks in news today.


Shipping Corporation in reported to be in talks with Korea’s STX for a shipbuilding Joint Venture.

Tata Communications Ltd, formerly Videsh Sanchar Nigam Ltd, is in discussions with Temasek Holdings Pvt. Ltd for a possible stake sale in its retail and broadband business.

Cigarette manufacturer GTC Industries announced that its board of directors has considered and granted an in-principle approval to demerge the tobacco and the real estate business into two separate entities.

ICSA is eyeing Rs 100 crores from oil and gas infrastructure projects.

Spice Communications registered Rs 399.92 crores net profit in Q3

Reports say ICICI Securities Ltd, the broking arm of ICICI Bank Ltd is planing to sell about 3% of its equity to institutional investors through private placement.

Tata Teleservices will launch Virgin Mobile, a UK based Virigin Group Company in 50 cities initially and in more than 1,000 cities by the year end.

Pune based Kinetic Engineering sold 14.5 percent stake to AIG.

Thumbs Up to FM's budget today

Finally budget day.
But cautious is advised as today the market to swing in the tune of FM.
On the downside the Nifty finds a support at 5220 and then at 5170 and then 5130
5020 is a good support which is not expected to be broken in tomorrow trade.

On the upside Nifty faces a resistance at 5320, 5350 and as usual still maintaining my words the zone of 5370 - 5410 is a tough resistance

Trading strategy -- Don' trade simply because you want to trade. Can skip tomorrow trade, or else do quick buying and selling

Indian Markets are in no mood to couple with global markets from the last couple of days though F&O settlement tried to create ripples. Markets are lacklustre and are expected to react sharply on the up today unless Mr.Chidambaram hands over a negative surprise. With very low expectations set in the run up to budget the downsides are negligible. Lets take a peek at the Industry wish list.

1. IT Sector - Looking for an extension of the STPI (Software Technology Park of India) scheme, which expires on March 31, 2009.

2. Telecom Sector - Looking for a cut in license fee

3. Oil Sector - Looking for series of tax and duty changes related to oil product retailing, exploration activities and natural gas

4. Textiles - More sops to the sector like enhanced TUF(Technology Upgradation Fund).

5. Consumer Durables - Looking for more attention in the form of incentives as a slow down is visible.

6. Automobile - Looking forward to a reduction in excise duties.

7. Pharma - Looking for Price control and tax benefit from investments in R&D

8. Agricommodities - We believe this sector is likely to grab major attention today from Mr. FM

9. Fertilizers - More subsidies look imminent here

10. Infrastructure - Looking for more allocations towards the development of infrastructure in the country

General

Positives : Increase in FII investment in sectors like such as media, banking and insurance.

Negatives : Likely tax net on Mauritius registered VC's

It is always tough to read the mind of the FM, proved number of times. But the expectation that the budget will prefer the common man will be spot on as the Government will try to pacify him along with the political allies in the wake of next year's general elections.

Majority analysts feel the budget is a non-event. We think otherwise and this is the only opportunity for Bulls to take advantage visible for the next 40 days or so. Keep fingers crossed and the coin tossed till Mr.Chidambaram opens the mystery bag.

Stock in news - Aban Lloyd, IB Real Estate, Matrix Labs, DLF, Gammon and other stocks hit the headlines today.


NIIT Technologies has acquired German-based SofTec GmbH, a specialist in providing IT solutions and services in the airline revenue accounting and operations space.

Sonata Software Ltd has teamed up with Oceanus, a UK based company to enhance their development of integrated Case Management Solutions and Environment Management Solutions, which are specifically designed for customer service environments.

DLF is likely to invest about $5 billion or Rs 20,000 crore to build and operate more than 25,000 rooms in the next 7-8 years.

Gammon India has filed the Red Herring Prospectus in connection with the IPO of its subsidiary Gammon Infrastructure Projects Ltd (GIPL).

Apollo Hospitals is likely to set up a Rs 280 cr hospital in Mauritius

Indiabulls Real Estate (IBREL) will acquire its partner Dev Property Development (DPD) in an all-stock deal worth

Aban Offshore Ltd has received a 3 well contract offshore Myanmar, for the jack-up drilling rig Deep Driller 5, with an estimated duration of 4 months. This contract will be in direct continuation of the current contract with Cairn Energy Sangu Field Ltd. The estimated contract value is approximately USD 25 million

Subdued US Market, Bears are the likely target

Bernake came into the resuce of the wall street after a down opening yesterday. The Fed chief re-iterated that inflation concerns will not stand in front of another rate cut. Dow Jones ended the day up 9 points at 12,694 and Nasdaq up 8.7 points at 2,353. This is the fourth consecutive positive closing for the Dow Jones while a hatrict for the Nasdaq. We are the first ones to report the Dow Jones forming a Medium term botton on Satruday morning IST.

Indian Markets are not able to latch on to the early gains built yesterday due to credit concerns and negative news flow from the Europe. When the big brother is able to withstand the negative news why the emerging market like India is looking at every oppurtunity to fall. It once again nails down to the huge short positions built up by the FII's for the Feb Series. There are reports in the market that shorts were rolled over to the March Series. We believe Budget will signal the end of the bearish saga haunting from the last 45 days.

Markets are likely to open in a subdued fashion only to pick up later in the day. Except a 200-300 point gain today on the BSE Sensex. Momentum Calls like OnMobile, KS Oils and McLeod Russel, Dhanus Tech tasted success while few others are on the way to reach targets. Subscribe to get the best value advice in the Indian markets.

We again re-iterate that fundamentals cannot be over shadowed for longer period and many stocks are still trading at attractive valuations. The hang over will be over soon and FM is likely to be the torch bearer for the next rally.

Stock in news - Dabur Pharma, Spice Jet, UTV Software, Shasun Chemicals and many more hit the headlines today.

Shasun Chemicals formed an exclusive deal with global pharma biggie Merck & Co thats allows the American company the use of Shasun’s proprietary technology to make bulk drugs.

ET reports that Dabur Pharma is looking out for a buyer and said to be in advanced stage talks with a renowned PE firm.

SpiceJet is likely to fly to gulf and china.

ABC news is likely to take stake in UTV news.

Sun Pharma gets USFDA nod to market generic demadex tablets.

BGR Energy Systems has won a BOP contract worth Rs 793 crore from the Andhra Pradesh Power Generation Corporation for a 500-MW coal-based project in Kothagudam.

Aries Agro is likely to increase capacity by five fold

Nagarjuna Constructions is actively looking for a foreign partner for getting into auxiliary equipment business, used in power plants.

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Markets look to open strong for the third day in a row as Bulls look to come back and regain some lost ground in the past few months. The global cues are good with the US markets ending up and Nikkei joining the gainers club
On the domestic front Reliance Industries Ltd announced that it discovered natural gas in Mahanadi and this will definitely reflect on the stock performance today. The overall sentiment in the market has started improving as we have seen some selective buying in some sectors like Tea which has underperformed the market for the past 12 months. The focus has now turned to Budget 2008 which is due on Friday, ignoring the upcoming F&O expiry. We strongly believe and are nearly certain that Agriculture (fertilizers in particular) and Textiles will be the two key sectors to watch out for in the upcoming budget.

Mid cap and Small cap indices which have underperformed the index for the last 6 sessions made a come back yesterday and are likely to outperform the large caps in the coming days. We see a gain of 1.5 to 2 percent on BSE today with selective buying in sectors which could gain from budget sops.

Stock in news - RIL, BHEL, Concor, Cairn India, Petronet LNG are Newsworthy stocks today.


Reliance Finds Natural Gas in Mahanadi Basin.Reliance owns 90 percent in the area and Canada's Niko Resources Ltd. holds 10 percent of the area

Bharat Heavy Electricals Ltd won a $269 million) order for a power project in Gujarat from Gujarat State Energy Generation Ltd for a 350-megawatt turbine-based plant that will be located at Hariza.

Container Corporation of India (Concor) is all set to add eight new rail-linked inland container depots) with an investment of Rs 320 crore by the end of 2009

Cairn India has entered the race for acquiring two oil exploration blocks in Sri Lanka, by bidding for blocks 001 and 002 under the ongoing Sri Lankan licensing round.

Asian Development Bank is likely to exit Petronet LNG Ltd by selling its 5.2 per cent holding in the country's biggest liquefied natural gas importer possibly to promoters or billionaire Lakshmi Mittal.

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On the upside market faces an immediate resistance at 5234 and then 5280 upon successfully crossing this level and stay above this level can take Nifty straight to 5310.Above which the market can even touch 5380 - 5410.

But again remember the level between 5380 - 5410 is an important resistance currently Nifty is facing, we have seen from past few days that reversal happening around this level. So be careful.

On the downside market finds immediate support at 5160, If this level is broken then we can see more fall and the Nifty could show 5020

Pick No 1 - Buy Guj AMbuja (cmp 122.55) - Trader can buy around yesterday close keeping a stop loss of 120. Final target and stop loss only to clients

Pick No 2 - Buy K . S. Oil (cmp 96.60) - We kept on saying on Thursday and Friday and continuously told our paid clients to hold and see today where it is from 86 - 84 to 98 today. Traders can buy around this level with a stop loss below 93 target 100 and 103

Stock in news - GMR Infra, Godavari Power, Crompton Greaves and ONGC make the headlines

GMR Infrastructure which has New Delhi, Hyderabad and Istanbul airport projects in its kittyis now foraying into air charter services. The company is diving into the corporate jet market with a capital expenditure plan of Rs 700 crore.

Godawari Power and Ispat (GPIL), based in Chhattisgarh, is mulling foray into commercial power generation with projects in Chhattisgarh or Jharkhand with capacities ranging between 300 to 1,000 mw with coal and coal rejects as fuel.

Electrical equipment manufacturer Crompton Greaves on Monday announced a tie-up with Dutch firm Lemnis Lighting for launching LED lighting products

ONGC has notified four discoveries of crude oil and natural gas to the Directorate-General of Hydrocarbons this month. The board has also cleared three major investments for growth-oriented projects which includes Dahej Petrochemicals Project.

Tulip IT Services having raised $150 million via foreign convertible currency bonds (FCCB), has earmarked around $40 million for an acquisition in the US having managed services capability.

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Stock in news - Reliance Power, Tourism Finance, IRB Infra, IOC and many other stocks hit the headlines today.


IRB Infrastructure is listing on the bourses today.

Tourism Finance is planning a Rs 400 crore equity fund reports Mint. Earlier RBI permitted FII's to increase stake in the company.

Entertainment Network India Limited is likely to benefit from TRAI's recommendation of FM radio channels allowing broadcasting news and increasing FDI

Bombay Dyeing is reporedly planning Rs 60 cr retail expansion, foray to UAE.

Reliance Power approved bonus in the ratio of 3:5

Renaissance Jewellery is likely to sell its retail venture soon

On the upside market faces an immediate resistance at 5160 - 5180 upon successfully crossing this level and stay above this level can take Nifty straight to 5310.Above which the market can even touch 5440.

But again remember the level between 5380 - 5410 is an important resistance currently Nifty is facing, we have seen from past few days that reversal happening around this level. So be careful.

On the downside market finds immediate support at 5090, If this level is broken then we can see more fall and the Nifty could show 5020

We are now in a do-or-die zone with the biggest possible trigger, the Union Budget coming up on Friday Feb 29th. All eye are on Mr.Chidambaram to deliver the goods. Low expectations can be considered as a welcome sign. Export driven sectors are hoping for a relief package and are likely to get the same. All in all a populist budget is expected from the FM taking next year's general elections into consideration. At the same time Mr.PC cannot take the chance of neglecting the country's economic growth. Infrastructure needs a big boost and there might good news on the taxation front for common man.

Reliance Power declared a 3:5 bonus in yesterday's board meeting. The price after bonus works out to be Rs.269 for a retail shareholder and Rs.281 for a HNI. We leave it to Mr.Ambani to decide whether the bonus is in agreement to the extreme high valuation of the IPO or a sympathy towards the retail investor. The stock is likely to react positively to the news though we do not see a huge rally in the coming days.

Private banks are likely to be re-rated on the news of HDFC-Centurion bank merger. Stocks to watch in this space include Bank of Rajasthan, Dhanalakshmi Bank, IndusInd Bank, City Union Bank and South Indian Bank.

Given the volatility and the drag in the capital markets not many investors are likely to believe in our theory. In case of a subdued market response to the budget we are unlikely to see rallies till Q1 results or any global news that impacts Indian bourses. So in short it is a 'Now or Never' situation for Indian markets to perform.

We expect the markets to open strongly and hold on to the gains. The extent of gains are largely dependant on the pre-budget rally, which we believe will set in any time.

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On the downside market finds immediate support at 5125, If this level is broken then we can see more fall and the Nifty could show 5030. Market expected to be range bound between 5050 - 5230, opening could be negative .On the upside market faces an immediate resistance at 5210 - 5230 upon successfully crossing this level and stay above this level can take Nifty straight to 5305

Indian Markets have never witnessed this kind of drag phase in the last 4 years. Not to say there are 3-4 thousand point plunges in the Sensex but the recoveries are smart enough barring this time. It is a million rupees question for Indian investors whether to get out of stocks or stay invested in the market. We believe there is absolutely no point in getting out of the market and we strongly take this as another prolonged bear cycle with in the bull phase. Stay invested but with more patience as things cannot turn overnight.

Technology stocks as expected rejoiced yesterday on weak rupee. Markets are likely to open down a big way but recovery from the lows is a certainity. Sensex is likely to lose somewhere between 200-300 points unless pre-budget rally sets in.

Government in an unprecedented move approved a fresh Rs 500 crore assistance to help exporters after a Rs 300 crores alloted recently. Textiles and farm product related companies are likely to benefit immensely from the forthcoming budget. Infrastructure and logistics are the other sectors to watch for in the budget.

STOCK IN NEWS- Centurion Bank, Jai Corp, Financial Tech, HDIL, Indiabulls Financial Services,Wockhardt, Bharat Forge and many more stocks hit the headlines today.


Bharat Forge is planning to set up a steel unit in West Bengal.

Reports of political uncertainities in Kenya is likely to push Tea prices higher. Keep a watch on Tea stocks like Mcleod Russel and others.

Centurion Bank is likely to merge with HDFC Bank in an all-stock deal. The deal is reported to be worked out at a market price of Rs.57 a share of Centurion Bank. Buy on rumours sell on news.

Wockhardt Ltd after withdrawing its IPO for the hospital venture is looking for funds from PE companies to raise upto Rs.800 crores.

Indiabulls announced that SEBI has approved to set up mutual fund business in the country.

Bajaj Auto is likely to list the de-merged entity(Bajaj Holdings & Investment Ltd)on the stock exchange by the end of April.

RBI has permitted FIIs to pick up stakes in three companies Tourism Finance Corporation of India, Tulip IT Services and Info Edge India under the portfolio investment scheme

Housing Development & Infrastructure Ltd(HDIL) inline with the rumours has sold the Andheri property to a private company for nearly Rs 900 crores.

Jai Corp is likely to launch a mega realty fund to invest in famour "The World islands project", dubai reports ET

The Centre on Thursday cleared a new Rs. 500-crore package in the form of interest subvention for exporters, in addition to Rs. 300-crore package announced recently