Market Outlook For 14th Jan 2010
Markets staged a smart recovery late in the day as stocks rallied sharply after looking a bit tired. IT
heavyweights led the turnaround as stocks like TCS and Wipro rallied to new highs. Nifty slumped to
around 5170 before making a comeback. TCS was up more than 5% while both Infy and Wipro added more
than 3% each. Metals too supported the upmove particularly during the second half as steel stocks surged
higher. SAIL was up 3% while Tata Steel, JSW Steel and Hindalco too moved higher. Prominent gainers for
the day were GTL Infra, PTC, ACC, Bhushan Steel, Ultratech Cement, Petronet, BRFL, Voltas, Tech
mahindra and Biocon. Some of the stocks that ended amongst the losers were LITL, India Info, M&M,
Educomp, Mcdowell, Crompton, Sterlite, HCC, Sun Pharma and Cairns. Nifty finally shut shop around
5240.
Nifty staged a rebound exactly from 5170 and could now rally to around 5280 where it finds some
resistance. IT stocks have provided a much needed fillip to indices and now it is for the other prominent
sectors like Autos and metals to take it further from here. Steel stocks in particular have bounced back
nicely from short term support levels and followup buying in stocks like SAIL, JSW Steel and Tata Steel
could take them higher from current levels. Cement stocks were in demand and stocks like ACC and
Ultratech have given a strong breakout. More
upside is likely in both as well as India Cements. Ashok Leyland is on the verge of a strong breakout and
sustained trade above 55 could take it higher to atleast around 62-63. Similar pattern is developing in GVK
Power and here the breakout level is above 53 with breakout targets being 57 and 60. Others that are
showing positive bias are Biocon, Rolta, Colgate, Petronet, Century, Aban , JP Associates, GE Shipping and
ABB.
Nifty has support around 5160-70 and then around 5125 while resistance is likely around 5280-85.
Scrip Buy Above/Sell Below S.L. Target Horizon
JINDAL SAW CASH BUY ABOVE Rs.212 199 223/232 3-4 DAYS
JSW STEEL CASH BUY ABOVE Rs.1150 1124 1166/1185 3-4 DAYS
TECH MAH CASH BUY ABOVE Rs.1088 1064 1115/1145 5-6 DAYS
MPHASIS CASH BUY ABOVE Rs.738 714 752/770 5-6 DAYS
WELSPUN GUJ CASH BUY ABOVE Rs.283 278 288/292 3-4 DAYS
STOCKWATCH
ENIL ( Rs.236.50 ) : The stock has now broken out of its consolidation range and is ready for an explosive
breakout.. Buying is advised above Rs.238 or on declines to Rs.228 for a target of Rs.252 and Rs.264.
Higher target of Rs.273-282 can also be expected. The target of the investment would be around 15-20
trading sessions.
JINDAL SOUTH WEST HOLDINGS ( Rs.2004.90) : Buying is advised above Rs.2020 for a target of
Rs.2150 and Rs.2325. Higher target of Rs.2450-2500 can also be expected. The time frame of the
investment would be around one month plus.
JAYSHREE TEA ( Rs.410.75) : Buying is advised above Rs.412 for a target of Rs.440 and Rs.462. Higher
target of Rs.480 is also possible. The time frame of the investment would be around 20-25 trading sessions.
INVESTMENT PICK
KGL
Present Price – Rs.22.55
Projected Price – Rs.35-38
Karuturi Global is the world’s largest producer and exporter of cut roses with its operations spread across
Ethiopia, Kenya and India. It is now aiming to broadbase our product portfolio to become an integrated agriproducts
company with global presence. The company has been given about 300,000 hectares of land to the
Company, for cultivation of a wide variety of crops including oil palm, sugar, cereals and vegetables. Of
40,000 hectares that has already been acquired, cultivation has commenced over an area of 11,000 hectares.
In the initial phase, we have started cultivating maize, rice and vegetables.
To meet the rising demand for cut vegetables from Europe, besides the local demand in Ethiopia, Karuturi is
foraying into vegetable cultivation. About 2,250 acres of land is being earmarked to cultivate diversified
commercial vegetables such as runner beans, fine beans, sugar snaps, salad onions, baby corn, courgettes,
chillies, okra and manage touts. A combination of short and long-term, and seasonal crops would ensure
year-round production.
This will also result in greater economic return, low incidence of crop failures and reduced dependence on
single crop. We advise buying in reasonable quantities in one’s portfolio. We intend to cover this stock in
detail shortly after meeting the management. The time frame of the investment would be around six months.
NIFTY BOUNCES BACK
The Nifty seems to have completed a period of correction, and is well poised for another round of gains. If
this is a false signal, the first sign will come if the Index closes below 5176 - today's low. Until that happens,
I feel the trend is UP and buying should be done.
Resistance for the Nifty seen around 5300 and Support for the Nifty is around 5170-5180
Corporate Highlights
• Oil Ministry will propose increasing petrol price by Rs 2.50-3/litre
• Cement makers are set to hike prices by Rs 3-5 per 50 kilogram bag from Friday in northern, southern
and western markets, third time in past three months on the back of an improved demand due to the
government-led infrastructure spending and recovery in the housing construction segment.
• Bajaj Electricals has fixed 29 January 2010 as record date for subdivision of existing equity shares from
each 1 equity share of Rs 10 each into 5 equity shares of Rs 2 each.
• Banswara Syntex receives order for Specialty High Performance Fabrics meant for Defence Services. It
is expected that there will be a large demand for this specialty fabrics. The company has also received
third repeat order of 20,000 meters for Technical Fabrics from a reputed customer in USA.
• Pratibha Industries board meet on Jan 31 to mull share issue
• IVRCL Infrastructures & Projects has bagged an order worth Rs 1,550 crore from National Highway
Authority of India (NHAI) for construction of road. The project is for constructing shortest connecting
road between Indore and Ahmedabad,
• Deepak Nitrite has launched new products in fuel additives space. Domestically, the company is the only
manufacturer of fuel additives. Globally, too, there are very few fuel additives manufacturers. Annualised
revenue of the company is seen at Rs 75-100 crore from this segment. There is adequate manufacturing
capacity in place to meet initial demand. The demand will be met from planned capacity expansion at
Dahej.