Fwd: Market view & Stock Pick
Prabhakar A.K
Nifty (6237) Nifty after making all time high 6415 has corrected till 6230 making lower low and lower high so that trend has to change and the day it closes above previous day high rally would gain strength. Nifty has closed Gap created on 9th December while 5th December pending gap levels (6209-6230) if gap closes then 6194 & 6141 are downside levels being 50% & 61.8% retracement for rally from 5972 to 6415. Today Nifty below 6230 then 6206 or 6180 would give good support but if Nifty starts to trade positive then rally till 6273 & 6311 becomes possible.
Data Reading—CPI Inflation @ record high while IIP data contracts and with RBI policy on December 18th 25basis hike on cards as per many Economist report I track. Capital goods key surprise in IIP numbers, in my view Bull market has started in August 2013 and which can see rally till 2017 with odd correction. First 2years of bull market mostly rises on very negative data and will never give a chance for traders to make money.
Chart of the day-DIVISLAB Rs.1140 Market Cap-Rs.15134crs EBITA margin 38% http://www.divislabs.com has one of the highest margins in segment it operates and exports contribute 89% of the revenue.
Stock made all time Rs.1234 in November 2012 and from there made low of Rs.905 and consolidated for 13months and ready to target Rs.1320 & 1440 in next 8-12months. On Weekly Charts Stock has made Pole & pennant and if Rs.1090 holds and closing basis then target of Rs.1300 around levels is possible in 8-13weeks.
A.K.Prabhakar
Prabhakar A.K
Nifty (6168) Nifty has gapped-down (6230-6208) making a prefect Negative island reversal near the highest point but we need 3-4days more confirmation to see if this will sustain. Negative Island if sustains then it can be very negative in short term and in recent past we have had positive or negative island on very regular basis so we will not hurry much. Nifty has corrected 4days and now chances of a recovery become possible if 6200 above if nifty trades while below 6125 short term weakness would continue. Today crossing holding 6140 and crossing 6188 is important for any rally while crossing 6230 which become strong resistance. Post Gaps we normally see market in narrow range for 1-2days.
Advance tax number and results next trigger: RBI policy & FED tapering has kept markets on pressure, whatever is the outcome market post event would start it’s up move. Last date for advance tax payments extended to December 17 so in next 2-3days stocks would take cues from Advance tax numbers, IT, Private banks, Pharma Select FMCG Stocks have been consistent, while surprise from Capital Goods and Metals can be expected.
Chart of the day-WIPRO Rs.518 Market Cap-Rs.127893crs (Long Term)
WIPRO is unique charts in long-term basis, this is only stock in Nifty which after making all time high in Year2000 Rs.1033 (adjusted for all events) has never touched those euphoric peaks and I expect the stock to cross those levels by 2016 which is almost double from current levels.
Every stock in Index presently has made all time high between 2007-2013 while WIPRO is only Index stock where all time high of 2000 even after 13years is not crossed.
In 2010 I had recommended HINDUNILEVER around Rs.300- HUL Rs.323 High made in year 2000 was breached in 2010; which was 10years break-out which has more than doubled in 3years 2013 July high Rs.725. in similar way if Wipro crossed all time high Rs.1033 then chance of stock performing same way can’t be ruled out.
A.K.Prabhakar
Prabhakar A.K
Nifty (6154) Nifty has corrected for 5trading days now and after making 6415 all time high corrected till 6146 and with 61.8% retracement from recent move 5972-6415 if we hold 6141 and cross previous day high 6183 then chances of strong recovery insight. Today Nifty crossing 6184 then 6248 & 6280 could be possible while below 6141 then 6102 will be major support. Nifty today holding 6141 and crossing 6230 then our month end target 6571 looks possible and can exceed.
Advance tax number has started to flow LUPIN again seems to surprise positive while SBIN has disappointed this time also, YESBANK has paid Rs.268crs vs 210 http://www.business-standard.com/article/finance/sbi-s-advance-tax-payment-down-33-at-rs-1-130-cr-113121600531_1.html if YESBANK holds Rs.357 then rally till Rs.390 & 425 becomes possible.
Update-INFY closes above 3500 then target in next 11-13Months Rs.4380 & 4630(20th November Report and now INFY heading towards 3499 which is all time high after 34Months)
IT Stocks in focus
FED tapering major beneficiary is India; as Gold & Crude prices would correct and this would strength Dollar. There can be short term negative impact due liquidity drying up, but it would reduce Inflation and CAD in medium to long term while boosting our exports and our economy would return to 8-9% growth again. If U.S starts to grow then Indian IT Companies should be in focus TCS & HCLTECH has done well in weak global environment and they will continue to do good if Global economy recovers strong while WIPRO, INFY and TECHMAH are stocks which can give 50% above returns in next 18 months.
A.K.Prabhakar
Prabhakar A.K
Nifty (6139) Nifty has failed to hold 6141 and till 6190 is not crossed market can be range bound. Now important support is 70.7% retracement 6102 for rally of 5972-6415, Nifty has closed below 50DMA 6150 while 100DMA 5924 & 200DMA 5888. Today if Nifty doesn’t cross 6172 then pressure would continue while 6115 is a major support of rising trend-line if that holds post RBI policy then recovery can be sharp. Nifty has already corrected 6trading days and bottom could be formed in 1-2days.
Today we have RBI Policy and 25bps rate hike is already priced in by market but new governor has a tendency to surprise positive with other measure, we have to watch carefully. Nifty crossing and sustaining 6190 one hour after RBI policy then rally can be a sustainable one and above 6230 worst is over in short term.
Update- Given on 25th/November report -TVSMOTORS Rs.51 buy for target of Rs.58 & 64 in next 3-4months and Stop loss Rs.47 Stock crossing Rs.52.80 would make it highest in 21months. Long term target can be Rs.87.40 and 120 in next 3years. Stock had been my pick for investors in last 12months @ various levels. Trading Stop loss now would be Rs.52 for target of Rs.64 & 70.
Chart of the day--- DENABANK Cmp Rs.56 Stop Rs.52 Target Rs.70 & 76
Market cap-Rs.1962crs FY14 EPS Expectation is 22 trading @2.5times while Dividend yield 8.3% Book Value-164 Branches 1509
Stock on weekly chart has made Open-Low Rs.55.65 and this is only PSUBANK which is holding positive in last 8 trading days. Stock crossing Rs.58 then it gives major weekly break-out which would be a better confirmation for traders to enter.
Investor getting high dividend yield stock when the going is tough for PSUBANK can make sense as fresh slippage are controlled and RBI is taking lot of measures to curb NPA’s which would take time but long term in PSUBANK can be good if you are looking @ 2-3years time frame.
Disclosure DENABANK has been my pick in http://bullseye.moneycontrol.com along with TNPL
A.K.Prabhakar
Prabhakar A.K
Nifty (6217) Nifty made low of 6129.95 and rallied to close the Negative Island around 6230 and has shown sign of reversal. Nifty if 6160 holds and crossing 6275 then rally would continue 6442 & 6571 by end of the month. Today Nifty above holding 6185 and crossing 6240 then 6306 & 6354 are levels to watch while below 6185 retesting 6140-6130 is possible.
December Impact to play- Events like RBI & Fed are behind now December impact on market can play out. In early 90’s December month had holidays but things changed once FIIs inflow became sizable and exchange timing was increased and working days was streamlined. Post which in last 15years December has been mostly positive reason Global Fund manager’s bonus is linked to year end close. Now we have 8trading days still for this month which is still flat lets us see if December really works this time also.
http://www.marketwatch.com/story/us-stocks-up-on-strong-housing-data-2013-12-18?dist=tbeforebell U.S. stock indexes notched record closing levels on Wednesday as markets interpreted the Federal Reserve’s decision to begin the tapering of bond purchases in January as confidence in the underlying strength of the economy and welcomed its commitment to low rates for a considerable time.
Chart of the day--- IDFC Cmp Rs.106 Stop Rs.100 Target Rs.130
Market cap-Rs.16101crs FY14 EPS Expectation is 13 Book Value-97
Stock is moving up on rising channel and has taken good support around Rs.103 and showing strength to rise and target higher band of the channel in 2-3months.
IDFC is value @ these levels and has high chances of getting banking license, Company has good holding in listed & unlisted companies and any stock market rally will benefit IDFC in big way.
A.K.Prabhakar