Technical Analyst, Rajat K Bose is of the view that one can buy Suzlon Energy on dips.
Bose told , "Suzlon Energy long term looks pretty bullish technically. If there is a dip then that would be a good buying opportunity because medium term target would be Rs 135-140 for a minimum. I do not expect it to really go below Rs 93-91 kind of range and if we get a dip further towards say double digit levels of Rs 99-98 that would be a good buying opportunity because you are actually placing a stop below Rs 90 and keeping a target of Rs 135-140. So maybe it is not a buy right now but somewhat at lower levels definitely I would like to consider buying it."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.
Tuesday, June 23, 2009
Nifty may test but won't breach 4,000: CLSA
Laurence Balanco of CLSA said support for the Nifty stood between the 4,000 and 4,100 level. “That level is a key support that dates back to the lows we saw in 2007-08,” Balanco said. “It’s also the breakaway gap that we saw post the elections. I think we will see a pullback and a test of that level. However, I would expect that level to hold in the short term.”
Here is a verbatim transcript of Laurence Balanco’s exclusive interview
Q: What’s your short-term outlook on what’s happening with the Sensex and the Nifty?
A: Looking at the Nifty, there is more risk towards the 4,090 level — that’s a key support level that dates back to the lows we saw in 2007-08. It’s also the breakaway gap that we saw post the elections, so the 4,000 level is an important psychological number. I think we will see a pullback and a test of that level. However, I would expect that level to hold in the short term.
Q: What about the global indices, the S&P closed below 900 yesterday after quite a while, any signs of a breakdown or you are reading it just as a re-tracement?
A: I am looking at a re-tracement at this level, the key technical level sits at 875 and that level dates back to the January and February peaks and also the lows that we saw in May. So that’s quite a significant level to look at. As long as S&P holds that level, I would still look for a move up to the 1,000 mark before we see the risk of a pullback towards 800. As long as 875 holds, the potential up-move to 1,000 is still valid.
Q: Corresponding with that, you think the Nifty might find support at 4,000-4,100 and pull back to take out its recent high of 4,600-ish, or is that being too optimistic?
A: The roadmap which we are looking towards the Nifty is the 4,200-4,100 area and the support level to hold and look for a retest of the peak — if not a move towards 5,000-5,500. India is one of the markets within Asia that we think has potential to at least take out new highs for the March lows. We have seen markets with similar structure like Taiwan, we have also seen that come back and follow up with a breakaway gap and we would look for those two markets to lead the recovery towards a new half or the March low. The key is that the S&P can hold 875, so those two markets look likely to retest the peaks at least.
Q: The doomsday scenario in the market’s mind is if the S&P were to go back to 666, even on a medium-term basis, how probable or improbable does that seem to you?
A: If you look at the longer-term structures, particularly for the US markets, I would still classify them as a secular bear market and if we go back to the basis of technical analysis, which started with the Dow theory, the sell signal that was in place from November 2007 is still in place. The recent rally that we have seen in the US had the Dow Jones Industrial making a high towards a January peak but the transports failed to confirm. I would still classify the US markets in a secular bear market. The other simple theory one can throw into the US is that talks about holding above the 200-day moving average (DMA) and the simple 200 DMA hasn’t changed direction to up. The 200 exponential moving average (EMA) has been a strong resistance with the S&P at 940. So the longer-term structure for the US markets is still bearish and the retest of those lows are probably but I think that happens in the next six months, probably not, but I think but what lies ahead for that market is the large sideways trading range that eventually lands up retesting those lows.
Q: Your thoughts on what’s been happening with crude and what kind of targets you see over there?
A: if we go back to December 2008 on the chart, the basic pattern developed below USD 50 per barrel and we broke above that in May and the minimum upside target that we are looking for that base break was between USD 71-76 per barrel. We think the biggest part of that move is now done and any rebound back towards USD 72-73 per barrel would be an opportunity to reduce exposure. The upside is quite limited at the levels we are looking at — above USD 70 per barrel.
Q: So net-net you are saying that this is not the big sell-off which people have been fearing after this massive rally, you are saying there is one more leg-up before any kind of a bigger correction seeps in globally and in India?
A: 875 is the key level we are watching on the S&P: if it holds, we would expect one more leg-up to mark the peak of this move for the Asian markets. For the October lows and for the developed markets are off the March lows would look at a seasonal weak pattern coming through into August-September. If that happens, then the pullback happens on lower volumes, one could start to get more interested in the market for another rally attempt but if we see a volume turnaround, I think the higher probable pattern over a six month period is a large trading range.
Q: What are you seeing on the charts of influential markets like Shanghai and Hang Seng as well which we take cues from?
A: The Hang Seng is testing quite a key support level at 17,500, if we do close below that level, this will trigger a minor double top pattern and that would suggest weakness down to 16,100. As far as the Shanghai market goes, that is still in an uptrend, the concern is that momentum continues to dissipate so each new high made by the Shanghai Composite is not being confirmed by those momentum indicators. We think that trend is quite mature and we would recommend taking some profits on the Shanghai Composite there.
Here is a verbatim transcript of Laurence Balanco’s exclusive interview
Q: What’s your short-term outlook on what’s happening with the Sensex and the Nifty?
A: Looking at the Nifty, there is more risk towards the 4,090 level — that’s a key support level that dates back to the lows we saw in 2007-08. It’s also the breakaway gap that we saw post the elections, so the 4,000 level is an important psychological number. I think we will see a pullback and a test of that level. However, I would expect that level to hold in the short term.
Q: What about the global indices, the S&P closed below 900 yesterday after quite a while, any signs of a breakdown or you are reading it just as a re-tracement?
A: I am looking at a re-tracement at this level, the key technical level sits at 875 and that level dates back to the January and February peaks and also the lows that we saw in May. So that’s quite a significant level to look at. As long as S&P holds that level, I would still look for a move up to the 1,000 mark before we see the risk of a pullback towards 800. As long as 875 holds, the potential up-move to 1,000 is still valid.
Q: Corresponding with that, you think the Nifty might find support at 4,000-4,100 and pull back to take out its recent high of 4,600-ish, or is that being too optimistic?
A: The roadmap which we are looking towards the Nifty is the 4,200-4,100 area and the support level to hold and look for a retest of the peak — if not a move towards 5,000-5,500. India is one of the markets within Asia that we think has potential to at least take out new highs for the March lows. We have seen markets with similar structure like Taiwan, we have also seen that come back and follow up with a breakaway gap and we would look for those two markets to lead the recovery towards a new half or the March low. The key is that the S&P can hold 875, so those two markets look likely to retest the peaks at least.
Q: The doomsday scenario in the market’s mind is if the S&P were to go back to 666, even on a medium-term basis, how probable or improbable does that seem to you?
A: If you look at the longer-term structures, particularly for the US markets, I would still classify them as a secular bear market and if we go back to the basis of technical analysis, which started with the Dow theory, the sell signal that was in place from November 2007 is still in place. The recent rally that we have seen in the US had the Dow Jones Industrial making a high towards a January peak but the transports failed to confirm. I would still classify the US markets in a secular bear market. The other simple theory one can throw into the US is that talks about holding above the 200-day moving average (DMA) and the simple 200 DMA hasn’t changed direction to up. The 200 exponential moving average (EMA) has been a strong resistance with the S&P at 940. So the longer-term structure for the US markets is still bearish and the retest of those lows are probably but I think that happens in the next six months, probably not, but I think but what lies ahead for that market is the large sideways trading range that eventually lands up retesting those lows.
Q: Your thoughts on what’s been happening with crude and what kind of targets you see over there?
A: if we go back to December 2008 on the chart, the basic pattern developed below USD 50 per barrel and we broke above that in May and the minimum upside target that we are looking for that base break was between USD 71-76 per barrel. We think the biggest part of that move is now done and any rebound back towards USD 72-73 per barrel would be an opportunity to reduce exposure. The upside is quite limited at the levels we are looking at — above USD 70 per barrel.
Q: So net-net you are saying that this is not the big sell-off which people have been fearing after this massive rally, you are saying there is one more leg-up before any kind of a bigger correction seeps in globally and in India?
A: 875 is the key level we are watching on the S&P: if it holds, we would expect one more leg-up to mark the peak of this move for the Asian markets. For the October lows and for the developed markets are off the March lows would look at a seasonal weak pattern coming through into August-September. If that happens, then the pullback happens on lower volumes, one could start to get more interested in the market for another rally attempt but if we see a volume turnaround, I think the higher probable pattern over a six month period is a large trading range.
Q: What are you seeing on the charts of influential markets like Shanghai and Hang Seng as well which we take cues from?
A: The Hang Seng is testing quite a key support level at 17,500, if we do close below that level, this will trigger a minor double top pattern and that would suggest weakness down to 16,100. As far as the Shanghai market goes, that is still in an uptrend, the concern is that momentum continues to dissipate so each new high made by the Shanghai Composite is not being confirmed by those momentum indicators. We think that trend is quite mature and we would recommend taking some profits on the Shanghai Composite there.
ABG Shipyard makes counter offer for Great Offshore
ABG Shipyard has made a counter offer for Great Offshore at Rs 375 per share.
reported on June 1 that ABG Shipyard had intentions to acquire a significant stake in Great Offshore. Back then, it appeared difficult for a player with about 2% stake in the company to challenge a player that has about 15% stake in the company (Bharati Shipyard) but it has released its business offer in a leading business daily. ABG Shipyard says it wants to acquire a 32.1% stake in Great Offshore at a price of about Rs 335 price — this is at a discount of the current market price.
How does it affect involve the three entities: for Great Offshore, the news is positive because the asset is being seen as a premium asset by many shipyard players.
For Bharti Shipyard, life gets a bit difficult because it has already made an offer at Rs 344 per share compared to ABG Shipyard’s Rs 375.
ABG Shipyard’s CFO, on the other hand, went on record to state that the company had no intention to acquire Great Offshore.
ABG Shipyard has a debt position of about Rs 1,600 crore of which about Rs 900 crore is capex and about Rs 600 crore is working capital. So a Rs 471 crore offer definitely stretches its balance sheet, its debt to equity is about 1.85. It has indicated that it will be raising about Rs 450 crore via a QIP.
So even as ABG Shipyard looks to acquire 32.1% in Great Offshore, it remains to be seen how things pan out for Bharti Shipyard.
reported on June 1 that ABG Shipyard had intentions to acquire a significant stake in Great Offshore. Back then, it appeared difficult for a player with about 2% stake in the company to challenge a player that has about 15% stake in the company (Bharati Shipyard) but it has released its business offer in a leading business daily. ABG Shipyard says it wants to acquire a 32.1% stake in Great Offshore at a price of about Rs 335 price — this is at a discount of the current market price.
How does it affect involve the three entities: for Great Offshore, the news is positive because the asset is being seen as a premium asset by many shipyard players.
For Bharti Shipyard, life gets a bit difficult because it has already made an offer at Rs 344 per share compared to ABG Shipyard’s Rs 375.
ABG Shipyard’s CFO, on the other hand, went on record to state that the company had no intention to acquire Great Offshore.
ABG Shipyard has a debt position of about Rs 1,600 crore of which about Rs 900 crore is capex and about Rs 600 crore is working capital. So a Rs 471 crore offer definitely stretches its balance sheet, its debt to equity is about 1.85. It has indicated that it will be raising about Rs 450 crore via a QIP.
So even as ABG Shipyard looks to acquire 32.1% in Great Offshore, it remains to be seen how things pan out for Bharti Shipyard.
Daily View
RESEARCH -Nifty (FUT) R- 4270/4320/4400 S- 4190/4140/4010; Sensex
(CASH) R- 14420/14575/14820 S- 14175/14025/13625; MARKET OUTLOOK:
NEGATIVE BIAS (9:00A)
(6/23/2009 9:46:24 AM): RESEARCH: MARKET OUTLOOK: Overall market trend is likely to remain uptrend. If NIFTY breaks the key support level of 4092 on daily closing basis, then the downtrend decider can be expected to capture the market. As for intraday’s trade, the support zone for NIFTY is seen at 4206 and 4189. Below 4115 levels, then it could test at 4092. On the higher side, the resistance will be at 4266 and 4300. Banking stocks are looking more demand and investors are advised to buy on every dip.volatility may remain high ahead of F&O expiry.
6/23/2009 9:47:45 AM): RESEARCH-Global Market (in %): DOW JONES (-2.35%), S&P 500 (-3.06%), NASDAQ (-3.35%), FTSE (-2.57%), DAX (-3.02%), NIKKEI (-2.9%), HANG SENG (-3.18%) & SGX NIFTY (-80 POINTS)
(6/23/2009 12:05:32 PM): RESEARCH- INTRADAY CALL (CASH) : BUY RPOWER ABOVE 170 TGT 175 SL 167.50
(6/23/2009 1:32:17 PM): RESEARCH - INTRADAY CALL ( CASH ) : SHORT SELL IVRCLINFRA BELOW 288 TGT 275 SL 294
(CASH) R- 14420/14575/14820 S- 14175/14025/13625; MARKET OUTLOOK:
NEGATIVE BIAS (9:00A)
(6/23/2009 9:46:24 AM): RESEARCH: MARKET OUTLOOK: Overall market trend is likely to remain uptrend. If NIFTY breaks the key support level of 4092 on daily closing basis, then the downtrend decider can be expected to capture the market. As for intraday’s trade, the support zone for NIFTY is seen at 4206 and 4189. Below 4115 levels, then it could test at 4092. On the higher side, the resistance will be at 4266 and 4300. Banking stocks are looking more demand and investors are advised to buy on every dip.volatility may remain high ahead of F&O expiry.
6/23/2009 9:47:45 AM): RESEARCH-Global Market (in %): DOW JONES (-2.35%), S&P 500 (-3.06%), NASDAQ (-3.35%), FTSE (-2.57%), DAX (-3.02%), NIKKEI (-2.9%), HANG SENG (-3.18%) & SGX NIFTY (-80 POINTS)
(6/23/2009 12:05:32 PM): RESEARCH- INTRADAY CALL (CASH) : BUY RPOWER ABOVE 170 TGT 175 SL 167.50
(6/23/2009 1:32:17 PM): RESEARCH - INTRADAY CALL ( CASH ) : SHORT SELL IVRCLINFRA BELOW 288 TGT 275 SL 294
Monday, June 22, 2009
Reliance has support at Rs 1850: Gujral
Technical Analyst, Ashwani Gujral is of the view that Reliance Industries has support at Rs 1850.
Gujral told , "Rs 1,970-1,980 is sort of the place from where that big gap happened on that post election results day, it is right there at that point, it's filled up its gap. Now it is at a clear support, if it holds up and Reliance comes back, the market will come back. But chances are once something fills a gap, it tends to go down bit further and the next support could be Rs 1,850. And with so close to a key market support 4,100 that if something goes wrong, the market could try to fill up its gap and that becomes a very clear possibility so people should keep 4,100 stop on all positions."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.
Hold Reliance Industries, says Choksey
Deven Choksey of KR Choksey Securities is of the view that one can hold Reliance Industries.
Choksey told , "In Reliance the news flow is negative and it is going to continue for some more time till Supreme Court (SC) judgement is out. If one wants to pick up the momentum this is not the right time. Probably one will have to wait for better news flows to come in and then start buying this particular counter. If you are an investor, already invested in this particular company, one shouldn’t be unduly worried about this particular company’s business future etc."
He further added, "My own take is that SC judgement would probably give lot of clarity on whatever the issues are. High Court (HC) judgement also is largely to do with the family settlement of this particular dispute. So maybe economic interest on this particular subject would be an area where SC is going to be throwing more light on. So I would stay invested with my long-term investment portfolio and for momentum to build up, I think I will wait for some better news flows to come in and then probably buy. As of now I think hold as far as buying decision is concerned."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.
Gujral told , "Rs 1,970-1,980 is sort of the place from where that big gap happened on that post election results day, it is right there at that point, it's filled up its gap. Now it is at a clear support, if it holds up and Reliance comes back, the market will come back. But chances are once something fills a gap, it tends to go down bit further and the next support could be Rs 1,850. And with so close to a key market support 4,100 that if something goes wrong, the market could try to fill up its gap and that becomes a very clear possibility so people should keep 4,100 stop on all positions."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the stocks/sectors discussed.
Hold Reliance Industries, says Choksey
Deven Choksey of KR Choksey Securities is of the view that one can hold Reliance Industries.
Choksey told , "In Reliance the news flow is negative and it is going to continue for some more time till Supreme Court (SC) judgement is out. If one wants to pick up the momentum this is not the right time. Probably one will have to wait for better news flows to come in and then start buying this particular counter. If you are an investor, already invested in this particular company, one shouldn’t be unduly worried about this particular company’s business future etc."
He further added, "My own take is that SC judgement would probably give lot of clarity on whatever the issues are. High Court (HC) judgement also is largely to do with the family settlement of this particular dispute. So maybe economic interest on this particular subject would be an area where SC is going to be throwing more light on. So I would stay invested with my long-term investment portfolio and for momentum to build up, I think I will wait for some better news flows to come in and then probably buy. As of now I think hold as far as buying decision is concerned."
Disclosure: It is safe to assume that analyst and his clients may have an investment interest in the above stock/sector.
Fibonacci Support and Resistance_23062009
Fibonacci Support and Resistance_23062009
Download the Report here
http://www.4shared.com/file/113398383/237af38b/Fibonacci_Support_and_Resistance_23062009.html
Download the Report here
http://www.4shared.com/file/113398383/237af38b/Fibonacci_Support_and_Resistance_23062009.html
Password for the file is http://dailytradereports.blogspot.com/
Decision on Future Ventures' IPO in 30 days: Kishore Biyani
Kishore Biyani, Managing Director of Pantaloon Retail (India) Limited, said the company was mulling an initial public offer for Future Ventures, and that a decison on the same would be taken in 30 days.
Biyani said he was looking to raise Rs 2,000 crore through the IPO and added he would put the money to use for new ideas.
“We are looking at reorganising the group business and consolidate retail under the financial business,” Biyani said, adding that the company would unfold plans to realign businesses in the next few weeks.
Q: Are you going to go ahead with the IPO and what is the exact quantum that you seek to raise?
A: I think we have started working on drawing board of how we can look at IPO of Future Ventures. So definitely something is on the cards but we will take a decision in the next 30 days and the original quantum will get reduced. We are still working on the final numbers. But we are looking at some form of IPO for Future Ventures because that is one of our largest dreams. Lot of people can participate in the growth of the consumption story. We have some big plans on Future Ventures but we will unfold it in the next few days.
Q: We hear that even if the trim down version of the IPO should be Rs 2,000 crore plus, what would you need to raise that kind of money for and will any of that money come into any of your group companies?
A: No, that is not the idea. The idea is to fund or be a mentor capitalist to a lot of consumption stories in the country. The idea is also to look at partnering with various partners in building up the consumption theme in India and also building up new projects. Maybe we might look at entry into our own brand of airtime along with somebody and they might be funded by this. So, we are looking at some big ideas to be funded out of this Future Ventures.
Biyani said he was looking to raise Rs 2,000 crore through the IPO and added he would put the money to use for new ideas.
“We are looking at reorganising the group business and consolidate retail under the financial business,” Biyani said, adding that the company would unfold plans to realign businesses in the next few weeks.
Q: Are you going to go ahead with the IPO and what is the exact quantum that you seek to raise?
A: I think we have started working on drawing board of how we can look at IPO of Future Ventures. So definitely something is on the cards but we will take a decision in the next 30 days and the original quantum will get reduced. We are still working on the final numbers. But we are looking at some form of IPO for Future Ventures because that is one of our largest dreams. Lot of people can participate in the growth of the consumption story. We have some big plans on Future Ventures but we will unfold it in the next few days.
Q: We hear that even if the trim down version of the IPO should be Rs 2,000 crore plus, what would you need to raise that kind of money for and will any of that money come into any of your group companies?
A: No, that is not the idea. The idea is to fund or be a mentor capitalist to a lot of consumption stories in the country. The idea is also to look at partnering with various partners in building up the consumption theme in India and also building up new projects. Maybe we might look at entry into our own brand of airtime along with somebody and they might be funded by this. So, we are looking at some big ideas to be funded out of this Future Ventures.
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