Skip to main content

By C. Kutumba Rao - November 9th, 2009


Recovering most of its losses during the early part of the week, markets ended a highly volatile week finishing higher for the week.

On the Bombay Stock Exchange, the Sensex gained 262 points to end the week above 16,000-level at 16,158 and the Nifty on the National Stock Exchange (NSE) logged 85 points to close at 4,796.

Statements from the Union finance ministry putting at rest speculation about the withdrawal of stimulus packages, positive news flow about the public sector units disinvestment policy and clarifications over the implementation of new direct tax code have helped markets "recover" quickly.

A renewed buying support from both foreign and domestic institutional investors and positive global cues turned the sentiment positive for near term.

Keep an eye on IIP (Index of Industrial Production) numbers (expected to be weak on underperformance of the infrastructure sector in September) and cues over global economies from G-20 conference in Scotland.

For the week ahead, chartists predict a trading band of 15,620-16,800 for the Sensex and 4,600-4,980 for the Nifty.

High intraday volatility is back; traders are cautioned to trade lightly. Be bullish only above 16,400 or 4,900 on the closing basis.

You can trim long positions, if the Nifty trades below 4,700-level. Market players expect 4,650-4,700 level to act as a strong support; and 4,850-4,900 level as strong resistance for the near term.

Investment ideas are about information and insight. Information is valuable if it is proprietary.

Insight is valuable if we know what that information means. Identifying likely losers is every bit as important as picking winners.

F&O

Nifty futures recovered 300 points from the intraweek low on technical basis. Overall open interest incre-ased by nearly Rs 10,000 crore to Rs 94,000 crore. VIX has shot up from 25 to 29 suggesting a high short-term volatility.

Punters suggest strangle strategy by buying OTM call option of 4,900 strike and OTM put option of 4,700-strike in the Nifty to take advantage of high volatility.

Among the stock futures that witnessed long build up are Ranbaxy, Biocon, Ashok Leyland, Voltas, Mphasis and Bajaj Hindustan.

After the acquisition of Shantha Biotech by Sanofi-Aventis SA, MNC market watchers are looking at a next possible candidate. Punters put a target price for Biocon at Rs 350 in next few weeks. A rebound in realty, metals, banking and autos was on expected lines.

Select counters like HDIL, Sterlite, Tata Steel M&M, IOB, Andhra Bank and PNB may move up further on sustained buying. From the infrastructure pack, NCC, HCC, Lanco Infratech and IVRCL look good more returns in near term. A heightened buying in Lanco Infra on news flow may see it touch Rs 575 in coming days tip punters. Among the side counters, Voltas, Trive-ni, Cummins, Welspun Guj, LIC Housing, GSPL and PTC grab attention.

SATTA Gupshup

* Arshiya is setting up FTWZs across various locations in India and commissioned rail container transportation business through its 100 per cent subsidiary ARIL. Buy for a target price of Rs 250 in medium term.
* Volume action in Gateway clearly indicates that some major 'news' development in near term. Buy for short term target of Rs175 with suitable trailing stop loss.
* Gati has reported excellent second quarter numbers and a preferential issue at high premium reflects that worst is over and that the company is back on rails. Buy for a target price of Rs 85 in medium term.
* SE Investments focuses on microfinance and works with low income families to provide financial solutions. It also has a wind energy division. Buy on declines for a target price of Rs 300.
*M&M Financial Services can be treated as a proxy for micro finance company since the company operates in the underpenetrated rural financing segment. Its plans to diversify into mutual fund business have triggered buying interest in the counter. Buy for a medium-term target of Rs 350.
* HBL Power is the pioneer in the design, development and manufacture of specialised batteries and DC systems in India for defence, aviation, telecommunication and railway sectors. Available cum split, the stock is a good bet for an ex-split target of Rs 60.
* Indo Borax is synonymous with Boric Acid and has market leadership in the segment. A steady growth makes the counter a good long-term bet for a target price of Rs 90.
* Fresenius Kabi (earlier Dabur Pharma) is attracting buying interest due to its robust performance. Buy on declines for a target price of Rs 125.


Popular posts from this blog

Bio-fuel has top investors powered up

23RD ,JUNE India's fortune-hunters believe their new-found love for biofuel will pay off. India's well-known investors who are known for their Midas touch have spotted an opportunity in bio-fuel, betting big on ethanol, bio-mass and even bio-fuel equipment makers in India and other parts of the globe. Billionaires Rakesh Jhunjhunwala, C Sivasankaran, Vinod Khosla, founder of Sun Microsystems, and Nemish Shah, the media-shy joint partner of Enam Financial Services, are investing in bio-fuel makers quietly, expecting that bio-fuel will have a big play in the coming years as the world looks for a viable alternative to the fast depleting oil reserves. Jhunjhunwala, who is known for his ability to spot a multi-bagger at a very early stage, recently invested in Hyderabad-based bio-fuel firm Nandan Biometrics.He is also a 10 per cent stakeholder in Praj Industries, which is a bio-fuel technology provider…

up to 8,500% return in 5 years! Investors made a killing in these 30 smallcap stocks

U By Rahul Oberoi, ETMarkets.com | Updated: Dec 01, 2017, 04.06 PM IST Post a Comment
Efficiency pays in the long run. Among the top smallcap plays on Dalal Street, 30 companies with stable return on equity (RoE) and return on capital employed (RoCE) have surged up to 8,500 per cent over the past five years.

All these companies had a debt-to-equity ratio of less than 1 and have been maintaining RoE and RoCE of over 20 per cent since 2012-13.

Avanti Feeds emerged the chart topper, with an 8,527 per cent gain to Rs 2,596.60 as of November 28 from Rs 30.10 ..


ovember 28 from Rs 30.10 on November 27, 2012. The company’s return on equity for FY17, FY16, FY15, FY14 and FY13 stood at 42.65 per cent, 46.21 per cent, 52.41 per cent, 45.79 per cent and 27.60 per cent, respectively. Avanti also managed to achieve a return on capital employed of over 50 per cent in last four years. Its RoCE stood at 28.59 per cent inRoE measures net income earned for every rupee of shareholder funds, while…

5 dark-horse picks

Kwadrat/shutterstock.com Kwadrat/shutterstock.com
If you are a conservative investor, using the mutual fund route is the best way to invest in stocks. But if you are game for some excitement, you might want to dabble directly in stocks, especially small-cap stocks. Stocks that are smaller in size, in terms of market capitalisation, carry higher risk. The reasons are — one, lower traded volume increases price volatility, two, information is usually scarce on these companies, three, business risk is higher since many of these companies are dependent on a single product and four, governance risk is also higher in these stocks. That said, small-cap stocks have the capacity to deliver far greater returns when compared to large-cap stocks. Sample this: there were 16 stocks with market cap more than ₹50,000 crore in January 2009. These stocks delivered an average return of 138 per cent in the last eight years but 4 out of every 10 stocks in this group delivered negative returns. On the ot…