FIBONACCI LEVELS for 22-06-2009

ABOUT FIBONACCI LEVELS:
Fibonacci levels are basically Support and Resistance levels generated using 5-day’s chart (i.e) 5 day’s High, Low and Close. Hence they are more accurate than Pivot levels which are generated using previous day’s High, Low and Close.
Generally stocks look bullish above the previous day’s High and bearish below previous day’s Low. So Previous Day’s high is the minor resistance (MIR) for the scrip and the Previous Day’s low is the minor support (MIS) for the scrip.
Stocks look strong above the 5-day’s High and weak below 5-day’s Low. So Previous 5-day’s high is the major resistance (MR) for the scrip and the 5-day’s low is the major support (MS) for the scrip.
So,
MR INDICATES MAJOR RESISTANCE- 5 DAY’S HIGH
MS INDICATES MAJOR SUPPORT- 5 DAY’S LOW
MIR INDICATES MINOR RESISTANCE- PREVIOUS DAY’S HIGH
MIS INDICATES MINOR SUPPORT- PREVIOUS DAY’S LOW
SCRIP LOOKS BULLISH ABOVE PREVIOUS DAY’S HIGH
SCRIP LOOKS STRONG ABOVE 5 DAY’S HIGH
SCRIP LOOKS BEARISH BELOW PREVIOUS DAY’S LOW
SCRIP LOOKS WEAK BELOW 5 DAY’S LOW
LTP is the Last Traded Price for the scrip

HOW TO USE IT:
For e.g. For Aban Offshore June Futures LTP is 3480 .MS is 3235 which is the major support below which the stock is extremely weak and MR is 3579 which is the major resistance above which the stock is extremely strong.
Suppose the stock currently trades at 3510, above 3512 long position can be built for the first target of 3579 and if it cuts 3579 it can go up to the second target of 3645 and the stop loss can be placed at 3473. Since the trend is sideways it becomes bullish after it cuts 3505(MIR) and becomes extremely strong after it cuts 3579(MR) levels.




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Mahindra Holidays & Resorts India Ltd- IPO (Subscribe)

Company Profile
Mahindra Holidays & Resorts India Ltd (MHRIL) is incorporaed in 1996. MHRIL is an
established player in the leisure hospitality segment, and provides holidays through
vacation ownership memberships. The members enrolled for the company’s
offerings can reside at resorts in a range of locations, for a pre-determined number
of days for a fixed period.
MHRIL’s flagship brand is Club Mahindra Holidays, which has been selected as
Superbrand 2009. MHRIL has also introduced new vacation ownership offerings such
as Zest and Club Mahindra Fundays, Mahindra Homestays, travel and holiday related
services through club mahindra.
The cumulative member base increased to 92,825 in fiscal 2009 from 38,691 in
fiscal 2006. As of May 31, 2009, MHRIL has 96,067 members and 27 resorts across
India and Thailand, of which it own 11 properties and others are leased. About
35.18% of new member additions in FY09 came from referrals by existing members.

Objects Of The Issue

Investment Rationale

Market leader: It is one of the leading leisure hospitality providers in
India. The Club Mahindra vacation ownership members increased to 96067
members in May 2009 from 38,691 members in 2006.

Domestic expansion: The Company is expanding its network by launching
seven new projects at Pondicherry, Kumbhalgarh (Rajasthan),
Kodambakkam (Tamil Nadu), Binsar (Uttaranchal), Theog (Himachal
Pradesh) and Tungi (Maharashtra), which will increase its top line in the
long run.

Expanding internationally: It is in the process of evaluating markets such
as South Africa and China, and it has also plans for investment in Austria.
This will increase its member base and resort inventory thus resulting in
increased revenues.
Investment Concern

The company’s revenues are highly dependent on the travel industry and
declines in or disruptions to the travel industry, such as those caused by
terrorism, natural disasters, financial instability or a downturn in economic
growth, may adversely affect its financial condition and results of
operation.

Industry Profile

The domestic trips are expected to grow at a CAGR of 11.7% over 2007-
2012, to reach approximately 871 million trips in 2012 from 527 million
domestic tourists in the year 2007.Further the domestic tourism
expenditure is expected to rise to Rs 2,621.1 billion, growing at a CAGR of
13.6% over 2007-2012.


Valuation
The company has priced its issue at 29.02x of its FY09 earnings. The issue seems to
be normally priced compared with its peer. Further its consistence financial
performance, growing Indian economy and increase in consumer spending looks
attractive for the company. So we recommend to “SUBSCRIBE” the issue for long
term perspective and listing gains.

WEEKLY MARKET OUTLOOK-19062009

NIFTY remains in bull mood.!!! Considering the bull has a lot of force …
In the previous weekly market outlook letter, as we mentioned that NIFTY may
continue its bullish trend, but it has to grab relax point…!!! Of course…NIFTY
exactly grabbed it.
Going on to the GLOBAL face, the Asian equity indices NIKKEI & HANG SENG are
drastically down by more than 3% against previous week, after having failed to produce
a meaningful rebound on Wall Street due to profit booking. The weekly chart of most
global equity indices are signaling that an uptrend can continue for few more weeks.
On the domestic wall, as of last week, the market shadow climate was characterized by
heavy selling by foreign institutional investors and profit booking by domestic investors.
Overall NIFTY is likely to remain in BULL mood and the short-term bull mood will face
resistance at 4601 and then 4693 levels. NIFTY technically created lower top lower
bottom formation over the last five trading sessions, which suggests pessimistic signal.
At the same time, the bull has a lot of force behind the bear when market is in uptrend.
So one can go fresh long if NIFTY trades above 4375 levels on expectations of short
covering. Above 4494 levels, NIFTY can move towards 4537 and 4601 levels. Looking
at the downside, the support zone for NIFTY is seen at 4206 and 4092 levels. If NIFTY
crosses this level, then the downtrend decider can be expected to capture the market.
What about Futures & Options market…!!! The fall in Nifty open interest put call ratio to
below one against last week denotes reduction in short positions in the market.
Generally if PC Ratio is below one, it indicates market is in oversold zone. Hence an
upside bounce back can be expected at any time on NIFTY due to short covering. The
INDEX open interest increased by 14.70% (WoW) while the June contract price was
down by roughly 5.73%, suggesting that short positions has build up in the NIFTY JUNE
contract. The weekly average cost of carry was positive and NIFTY June futures trading
at premium against spot market, suggest positive signs. The weekly average Implied
Volatility (IV) of all INDEX call and put options increased by 6.15% and 5.46%
respectively. This could be due to the expectations about a limited upside and downside
movement in the INDEX. Considering the above said F&O factors, investors are
advised to go fresh long if NIFTY trades above 4375, until then trade cautiously.







MARKET ANALYSIS

The investors seem to have booked profits after the recent solid surge in the stock
prices. The domestic stock market closed on a weak note for the week on back of
heavy selling pressures across the sectors. Weak global cues and Foreign Institutional
selling during the week weighed on the markets, bringing them down by about 5%.