HOT STOCKS FOR 07 - 04 - 08

STATISTICS :

Market which witnessed a sell on friday due to high inflation 7%, today can see a recovery to 4720 levels, and would be rangebound between levels 4600 - 4750. has some support @ 4610 level and resistance @ 4712. Once Nifty closes above this level can see Nifty moving till 4810 levels in coming days.

INTRADAY :

SAIL : buy for a tgt of 170+, sl @ 161.5

IndiaBullsSEC : buy for a tgt of 94, sl @ 86.5

FUTURES :

ZEEL : buy for a tgt of 251+, sl @ 234

RNRL : buy for a tgt of 102+, sl @ 92

SAIL : buy for a tgt of 171+, sl @ 161, tgt is 188+ for delivery

RCOM : buy for a tgt of 540+ , sl @ 485 for delivery

DLF : buy for a tgt of 640+, sl @ 597 for delivery

Nifty : buy for a tgt of 4725+, sl @ 4601, for delivery : tgt is 4900+

OPTIONS :

SAIL : buy call 170 for a tgt of 18+, sl @ 4.5

RCOM : buy call 540 for a tgt of 19+, sl @ 5

RNRL : buy call 100 for a tgt of 8+, sl @ 3

Nifty : buy call 4900 for a tgt of 140+, sl @ 30

HEDGE CALLS :

1> ....SAIL : buy 1 lot fut for a tgt of 190+,

.........SAIL : sell 1 lot put 160 above 6 rs, sl @ 10

2> RCOM : buy 1 lot fut for a tgt of 540+

.........RCOM : sell 1 lot put 500 above 23rs, sl @ 35

Reliance plans rig building foray

Growing demand, coupled with acute shortage of rigs, has spurred the country’s major private oil & gas company Reliance Industries Limited (RIL) to invest in offshore services business including building rigs and supply vessels.

According to Atul Chandra, president of the company’s international business, “We are planning to get into rig manufacturing as well as offshore vessels to support our exploration business.” However, the final decision will be taken only next year, added Chandra.

At present, RIL has six deepwater rigs and faces an acute shortage of rigs. Sources also said that over the next year, the number of rigs should double. RIL is paying more than $4,00,000 a day until August 2008 to rent the deepwater rig, more than twice the rate it used to pay earlier. Chandra also mentioned that the company might go for joint venture or launch an SPV for the same.

According to sources, RIL is going to spend over $146 million per rig per year over the next two to three years. The initiative to build its own rig would give as much as 40% saving on its total cost in future, added sources.

Worldwide, the offshore rig market is currently witnessing an acute shortage of rigs. In last three years, the day rate for a 250-300 ft have jacked up, which was around $50,000 in 2004, and currently stands over $15,0000.

...E&P in LatAm likely

Mukesh Ambani promoted Reliance Industries Limited (RIL) is likely to invest in oil and gas exploration in Latin America. According to Atul Chandra, president of international operations, petroleum and E&P, RIL, “We are seeing two projects in Latin America and looking at a majority stake in one of them and will be the operator in at least one of them.” However, he did not disclose the particular country the company will invest in. Sources said that the company is chiefly looking into countries like Colombia and Brazil for the same. The discussions is going on and probably RIL would come up with a final decision within few months, added sources.

View on IT stocks: in the neutral gear

The indice confirmed an intermediate uptrend indicating that the rally has started. The Sensex and Nifty have made a small inverted head and shoulder pattern, giving these indices a minimum target of 17,900 and 5,350 on the upper side. The indices have exhibited descending intermediate tops and bottoms and are in a major downtrend. The Sensex and the Nifty will have to move past 18,896 and 5,545 in the current intermediate rise for the major uptrend to be reinstated. The CNX Mid Cap index has not yet confirmed an intermediate uptrend, as the stock has yet to exhibit rising minor tops and bottoms and will do so after the next minor decline. The trading volumes on Friday, when the indices and scores of stocks confirmed an intermediate uptrend was moderate and below the 50 DMA (50 days moving average) and the low volumes also suggest that the current intermediate rise is just a rally within the major downtrend.

The targets for the intermediate uptrend to fizzle out are at 15,869 for the Sensex and 4,769.60 for the Nifty. Keep on trailing this stop as these indices move higher. As per the time cycle we are likely to see the bullish trend to continue for the next seven trading days and traders can look to buy in declines and sell higher in this period.

In the last week, the Sensex gained 9.18% and the Nifty gained 8.05%. The CNX Mid Cap index ended 8.65% higher. Among the sectors, the BSE Consumer Durable index ended 12.94% and was followed by the BSE Reality index, which gained 12.66%. On the weaker side, the BSE Auto sector ended 4.13% higher and the next was BSE Healthcare index which gained 5.01%.

Our Markets continue to follow the world Markets and this is likely to continue. An intermediate rally has already started in some of these Markets and more Markets around the world are following suit. The earlier intermediate downtrend, which had started on February 4, has now ended on the March 18. The major trend remains down and only if we see a sort of consolidation between 14,500 and 18,500 for the next few months and then breakout on the upper side, a new major uptrend will start. However, currently the major trend remains down and investors must stay away and wait and only trade in the direction of the intermediate trend. They must remember that the current intermediate uptrend is an intermediate rally, unless the indices are able to move past the targets suggested above.

Today, I will take a look at the tech stocks, which have been improving and are poised to move higher in the current intermediate rally.

Infosys

Infosys was an underperformer in the earlier major uptrend, as the stock has been in a major downtrend since the beginning of 2007. The stock has been staying below its falling 30 WMA and will have to move past its earlier intermediate top of 1,685 in the current rally for the major trend to turn up. However, as this level is below its falling 30 WMA, higher levels by the stock will see profit-taking and investors must not be in a hurry to get into the stock. The current intermediate rise is a good trading opportunity for traders on the long side. The weekly MACD Histogram is making rising bottoms indicating that the bears are becoming weaker at this stage n this stock.

Wipro

Like most of the tech stocks, Wipro also went into a fresh intermediate uptrend by exhibiting rising minor tops and bottoms. The stock is in a major downtrend and is exhibiting descending intermediate tops and bottoms. It has come closer to its falling 30 WMA and could move higher in the current week after some consolidation. The earlier intermediate top for the stock is at 552 and the stock will have to close past this level if the major trend of the stock has to turn up. Before the stock moves past this level, it has to face a strong resistance from the major descending trendline. The relative strength line for the stock has started to improve and it is a good trading opportunity for the intermediate rally.

TCS

TCS will have to close past its earlier minor top of 899 to confirm an intermediate uptrend. However, with most of the stocks in the tech sector already in an intermediate uptrend, TCS will follow suit. Once the stock moves past 875, traders can look for long positions with a stop at 840. Trail this stop as the stock moves higher. The 30 WMA for the stock has been falling and this long term moving average will act as a strong resistance to the intermediate rally. The trading volumes for most of the stocks and the indices will be low in the rally. Investors must stay away for some more time till we see signs of the indices bottoming.

View on Banking sector

After a strong close in the last week and hopes for higher levels, the intermediate uptrend fizzled out on Monday when the Sensex and the Nifty dropped below their respective targets indicating that the intermediate trend is down or at the most sideways. The Sensex will have to move back past 16,237 and the Nifty past 4,916.75 for the intermediate uptrend to be reinstated.

As of now the intermediate uptrend, which had started on the. March 18, fizzled out on the. March 28, lasting for just ten days, which is quite usual in a bear market. The trading volumes remain thin indicating a very low trading activity as the disgruntled bulls continue to remain sellers at all levels. The CNX Mid-Cap index dropped into an intermediate downtrend on Friday as the last intermediate rise lasted for a few more days and ended on the April 2 with a high of 6,388.35.

The bulls continue to shift from the leaders of the past four years to the defensive sectors like the FMCG and healthcare sectors. In the last week, the BSE Capital Goods sector was the largest loser ending 12.69% lower and was followed by the BSE Power sector ending 10.23% lower. The defensive sectors fared better as the BSE Healthcare sector lost 0.24% and the BSE FMCG sectors ended 1.11% lower. The Sensex lost 6.28% and the Nifty ended 5.97% lower.

The Sensex has a support at the 14,500 level and below this level the Sensex will be heading towards the next support of 13,300. The Nifty has support at 4,050 and below this level the Nifty is headed towards 3,850 levels. On the other hand, if these indices are able to build a base at these levels, which is the 61.8% retracement level, than we could see a new bull run after a couple of months once the basebuilding is over. However, if this does not happen, than the bear market will witness a deeper correction and the indices will continue to exhibit descending intermediate tops and bottoms.

The market breadth remained weak throughout the week as the declines scored over advanced. The trading volumes remained thin and were well below the 50 days moving average indicating that the indices and the stocks continued to decline on thin volumes. This means that the investors are willing to part with their investments at lower levels.

SBI

SBI is in a major downtrend as the stock has been exhibiting descending intermediate tops and bottoms and is trading below its 30 WMA. The stock is currently at the strong support of 1,580-1,600 level and a drop below 1,580 will result in a strong downward momentum and will give position traders an opportunity to look for short positions.

The weekly MACD indicator for the stock is trading well below its trigger line indicating a weak momentum and lower levels in the next intermediate decline. A drop below the support of 1,580-1,600 will result in the stock testing the next support at 1,375.

Axis Bank

Axis Bank is one of the private banks which has lead the earlier bull run and is now leading the ear run. The stock has been falling faster than the indices and as a result the relative strength line for the stock has turned weak. The weekly MACD histogram has been making new lows indicating higher weakness in the next intermediate downtrend and any pull back or rallies must be used to look for short positions.

The stock is at the support of 700 and a drop below these levels could take the stock to test the next supports at 660 and 600. Position traders must use the breakdown from this support to add to the short positions. The stock has witnessed a sell-off in the last few weeks with a strong surge in trading volumes indicating that big investors are booking profits in the stock.

ICICI Bank

ICICI Bank is one of the weakest stocks in the private sectors as the relative strength line for the stock is very weak and will soon test the one year lows. This means that the stock is underperforming the indices. The stock has already broken the strong support at the 800 level and is headed towards the next support of 630.

Investors who are still holding long positions must look to get out in the next rally or if the stock breaks down the recent support of 720 with high volumes. Traders must use rallies to look for short positions.

ICICI Bank introduces `Global Indian Account`

ICICI Bank, India`s second largest bank, announced the launch of the `Global Indian Account` facility. The facility being the first of its kind in India addresses the comprehensive banking needs of Indians moving overseas. These customers, prior to their departure from India, will have a bank kit comprising the host country bank account, debit card and internet banking deliverables, subject to regulatory requirements.

The Global Indian Account facility will be available for Indians moving to UK, US and Canada for work, study or immigration. Customers will have the opportunity to complete the documentation required for the host country account in India itself. Along with this account, they would also get a non-resident rupee account in India, which would facilitate instant money transfers between their host country account and their India account. This would help them manage their India banking requirements when away from India.

Sonjoy Chatterjee, executive director, responsible for corporate & international banking, at ICICI Bank said, ``We are leveraging on our international presence to offer a seamless banking service to Indians moving overseas, with access to local banking facilities from the time they enter that country``.

ICICI Bank is India`s largest private sector bank and the second largest bank in the country, with consolidated total assets of USD 115 billion as of Dec. 31, 2007. ICICI Bank`s subsidiaries include India`s leading private sector insurance companies and among its largest securities brokerage firms, mutual funds and private equity firms. ICICI Bank`s presence currently spans 19 countries including India.