MARKET OUTLOOK
Global buoyancy ensured a positive opening for the markets as Nifty opened closer to the 5300 mark.
Metals were on fire as strong momentum was seen in many metal counters. Nalco was up more than 15%
while JSW Steel and Hindalco shot up by more than 10% on huge volumes. Strong buying in JSW energy
re-invigorated the power counters as stocks like Adani Power, Rpower, CESC and JP Hydro attracted lot of
investor and trader interest. MTNL was the surprise package of the day as it zoomed higher by around 11%.
Other big gainers included SCI, Tata Tea, JP Associates, Essar Oil, Indian Info, Uniphos and IDFC. Auto
stocks were under pressure on account of profit taking as stocks like Maruti and Tata Motors slipped. Other
losers were IB Real, Cipla, Lupin, ACC and Mphasis.
Markets continues to retain positive bias and Nifty could move to the technical targets of 5375- 5400 in
coming sessions. Strong momentum was seen in metals and one needs to be cautious now as frontline stocks
notched up gains of more than 10% during the day. Infrastructure stocks are showing some positive
momentum now and one could see higher levels in stocks like Punj, Nagarjuna, IVRCL and GVK Power. JP
associates has some resistance around 165 and beyond that it could target 176-178. IDFC and ITC have
given a breakout on daily charts and could move up to around 175 and 266-68 respectively. Others that look
positive are SCI, BOI, Andhra Bank, Kotak, Rpower, Suzlon, Idea, Cairns and Financial Technologies.
Nifty has intraday support around 5210-20 while above 5285 it could target 5340-50.
DERIVATIVE PICK
FINANCIAL TECHNOLOGIES ( CASH – Rs.1473.95) : Buying is advised above Rs.1486 for a target of
Rs.1510 and Rs.1532. Higher target of Rs.1554-1566 is also possible. Stop Loss of Rs.1449 should be kept.
The time frame for the trade would be around 8-10 trading sessions.
STOCKWATCH
IGL ( Rs.200) : The stock is in steady uptrend and the weekly and monthly charts too are showing a lot of
promise. Buying is advised above Rs.200 or on declines to Rs.190 for a target of Rs.214 and Rs.232. Higher
target of Rs.252-255 is also possible. The time frame for this trade would be around 20-25 trading sessions.
ION EXCHANGE – ( Listed in BSE - Rs. 147.70) : The stock has broken out of a bullish pattern in the
and is headed for higher levels. Buying is advised above Rs.148 for a target of Rs.162 and Rs.178. Higher
target of Rs.188-190 is also possible. The time frame for the trade would be around 20-25 trading sessions.
INVESTMENT PICK
JINDAL DRILLING
Present Price – Rs.541, Projected price – Rs.625-630
Jindal Drilling & Industries Ltd (JDIL) is a value & asset play in the domestic offshore oil drilling sector. It
also operates in the fields of directional drilling and mud logging. Jindal is among the pioneers in India who
ventured into the high technology area of Offshore Drilling and over the last two decades have emerged as
one of the major players in Indian Oil & Gas industry providing highest quality services and performance to
the entire satisfaction of clients. Currently JDIL is operating five jackup rigs all on long term contract with
ONGC.
The business is organized into following principal operating segments:
• Offshore Drilling for Oil & Gas
• Horizontal & Directional Drilling
• Mud logging Services
Offshore oil drilling business requires exceptional engineering skills and requires experience to handle
critical project management skills. We believe that JDIL has developed these skill sets over a period of time.
Exploration and Production (E&P) activity by several large oil majors have been announced with significant
capital expenditure planned ahead due to sharp increase in oil prices and rising demand for oil.
The company has an Equity Capital of Rs.11.47 cr in which the promoter’s hold 75%. The Book Value
stands strong at Rs.118. Last paid dividend was 25%. We expet the company to report EPS of Rs.35 plus for
FY11.
On the technical front, the stock is looking strong and is on the verge of a big breakout. Once it crosses the
level of Rs.560, the stock can easily reach the level of Rs.625-630.
The time frame for the target of the stock would be around 2-3 months.
Technical Trends
The Nifty continues its up move, coming near 5300. The number 5300 is useful to remember since the last
Pivot High in the Nifty before the big 2008 crash, was made at 5298.85 in the week ending may 4, 2008.
Much water has flown through the ganges, since then. After a period of 20 months, the Market is finally
getting enough steam to touch the levels seen long ago.
The Nifty is likely to continue with its gains. Seasonality also favors such gains since this is the pre budget
period when stocks normally rally. Corrections will come, probably suddenly. Investors should buy on dips,
assuming that the uptrend remains intact. Traders should exit their long positions when their charts suggest a
decline. Going short is probably not a good idea.
Support for the Nifty seen around 5300 and Resistance for the Nifty is around 5180
Corporate Highlights
• Net profit of Prism Cement rose 35.26% to Rs 41.97 crore in the quarter ended December 2009 as
against Rs 31.03 crore during the previous quarter ended December 2008. Sales rose 7.07% to Rs 229.97
crore in the quarter ended December 2009 as against Rs 214.79 crore during the previous quarter ended
December 2008.
• Sadbhav Engg bags order worth Rs 1,350 Cr
• Viceroy Hotels is going to mull fund raising on January 7. The company will also mull re-structuring of
hotel assets.
• SRF gets around 1.2mlncarbon credits worth Rs 105 cr
• JSW Steel has posted 88% growth in quarterly crude steel production in Q3 FY2010. The company
achieved the highest production for Rolled flat and Rolled long products.
• Micro Technologies has launched device for remote management of motor pumps used by farmers. The
product is being pitched as a cost effective solution that helps reduce water leakages, pilferage and
wastage. The management is working towards making the product available across the country.
• Lanco Infra bags order worth Rs 2,106 Cr
• Uttam Galva hikes product prices by Rs 3,000/t
• Gujarat Narmada Valley Fertilisers has received subsidy in cash and on time. The order given to L&T
is to convert the plant from LSHS to gas. Cost of production will come by 80% when the company
converts to gas. GNFC's H1FY10 EPS stood at Rs 6.59. In recent developments in fertilizer sector,
fertilizer subsidy is estimated at Rs 71,000 crore, which will be paid via cash. Urea pricing policy ends in
March 2010. Nutrient-based subsidy is an ongoing process, and there is no finalisation yet. It is likely
around April 1, 2010.