Sunday, January 24, 2010

Weekend Views On Nifty!!!

There are two kinds of news, the good and the bad, and then there is only one kind of market and this market has a mind of its own! Now whatever this market does, the news channels will need to justify it, and they do it so, by taking out the appropriate dress (good/bad news) and dress it up accordingly!

Right now is the right time to feel bearish; coz right now there is a bubble threat in China, coz right now Obama wants to reform the STREET, coz right now our own Inflation numbers aint looking good, right now the Dollar is looking strong and finally right now everyone wants to see the color RED!

And mind it, all of the above will hold water till the next close! Yes if we manage a V shaped recovery from here, then the news might be; China bubble dangers were unfounded and rumors of vested interests (maybe the Chinese will blame Google for spreading em), Obama will say he was misquoted, and Inflation is just another number and Dollar...well Dollar’s rise will be negated by fall in commodities and not the SnP!

I guess we as traders should stick to our charts and more importantly to our STOPS and trade! We might never know the exact reason or timing of the fall but we do know when the warning bells ring. Please see the two charts I posted on the 17th and the 20th of January, I guess they were screaming caution irrespective to the news that was yet to come!

Moving on to the chart below, we can see that we have just managed to penetrate the short term TL (three strikes done, now the fourth might be brutal!) and any fall from here is straight to 4800 and 4650..a good 10 % correction eh?

Meanwhile a pullback from here will depend on how we react at 5095/5115! Above that, its back to testing THE 5180! All in all for all long 4950 or near bouts is a good stop! Time to buy some value stuff, better do it in tranches and better do it after you have done your homework!

Gold Views!!!

SnP 500 Views!!!

It’s almost after two weeks I am doing the SnP 500 thing; see the chart I posted on the 3rd of Jan, and read the complete post here! Well we did get our first target (and I guessed Obama chipped in to :-) )!

From the chart above you can see that the wedge has broken down and now we are staring down at the 200 periods MA and the significant low at 1040 and 1030 respectively. We have reached the OS levels in a jiffy and now it remains to be seen how we react to a pullback from here. Assuming that this fall is an another “buy the dip” and not THE DEEP, then also I would be personally satisfied once we are back to 1140 and above, till then it would pay to be a bear or sit aside!!!

Dollar Views!!!

I won’t add to analysis of the USD Index, as I still have the same views which were mentioned in the last post here and USD Index hasn’t done anything drastic yet that warrants any change of views!

By the way just for illustrative purpose I have drawn a fib projection on the chart which shows how the rough target of approx $82 was inferred! A typical AB=CD move in the making! It’s still at the volatile 200 periods MA and once again at the risk of being repetitive I would like to say that USD Index is likely to be strong as long as it trades above $77!

Saturday, January 23, 2010

HCC Views!!!

Hindustan Construction Co (HCC), founded in 1926 by Seth Walchand Hirachand, is an engineering construction private company.

There is a lot of buzz about its LAVASA project dubbed as the “Free India’s Largest Hill City”.

Even after recording higher sales, Hindustan Construction Company (HCC) has posted a 36% drop in net profit in the December quarter because of a write-back of excess tax in the comparable period last year!

Now the question is that was the share dumped coz of the above news or was it that it was caught up in the grand scheme of things i.e. the markets falling!

Let’s look at the Daily chart of HCC, from the chart below we can see;

  • A failed breakout above 150 and now back into the range.

  • A rising wedge accompanied by negative divergences gets broken.

  • The 20/50 periods MA’s give way and now the only average below is the 200 at 120!

It looks now to test the 130 zone, and below that it’s 120. It’s a good company and is not bad if you get it at 120/10(wedge targets) odd levels with long term targets at 250+! For the lesser mortals; us traders, we can see if it takes support at 130, thereby try and get in with a tight stop below 130 for a ride to 150. As for the momentum guys it’s a clean break above 150 that will again set up this stock into bullish territory!

Friday, January 22, 2010

Bilcare Ltd Views!!!

I had done a post on the pharma industry earlier and decided to check out a stock, much liked by a friend of mine; Bilcare Ltd!

First some basic info about the company;

Bilcare is an innovation-led solutions provider that partners with the global pharmaceutical and healthcare industry to improve patient healthcare outcomes. We endeavor to deliver effective and affordable solutions that enhance the speed and quality of drug discovery and help build and protect brands by ensuring the delivery of genuine medicines to patients.

  • Founded in 1995 by Mohan Bhandari, Bilcare Ltd. is listed on Bombay Stock Exchange (BSE).
  • Three defined business areas - Pharma Packaging Innovations, Global Clinical Supplies and nonClonable™ Security Technologies for brand authentication and security.
  • 500+employees, with 50% workforce based outside India.
  • Operations spread over 4 continents with more than 500 pharma customers globally.
  • Manufacturing plants and R&D centres located in Pune, Singapore, U.S. and UK.
  • Revenues of USD 162 million (FY07-08)

And for numbers one can click this link.

Now get down to brass-tacks; weekly chart;

As you can see from the chart above that it has reacted from the 200 periods MA above, and now is heading back to test the 20/50 confluence (452/55) below. By the way we have a nice range here where the monthly hi/lo at 556/485.20 is also as same as the weekly hi/lo! So this 485 becomes quite significant, where, in that vicinity, a few long stops might be crouching! I would rather be keen to see on how it behaves at the confluence of weekly 20/50 MA’s (455 area) below. It is there where one might get some value buy! Anyway from traders perspective it’s buy the supports and sell the resistances, and from the investors point of view especially the medium termish view, a buy here and add some at lower levels, can be held for 700/750! Once the monthly and weekly Hi along with the 200 periods MA is taken out with volumes, this can become a good momentum play!

The Serenity Prayer!!!

How the Serenity Prayer Can Help You Become a Better Trader…Click on the link to read a brilliant write up by Craig!

I was really moved by this, so decided to share it here on my blog for the benefit of people who might have missed this awesome post! I guess when you want to learn anything you just need to look around and LIFE teaches you all you want to know!!!

Asian Electronics Views!!!

Thursday, January 21, 2010

Suzlon Views!!!

Suzlon looks good for accumulation at lower levels…..Yeah after today’s fall I must be crazy saying the word buy??? Yup… but then I would buy Suzlon as an investment and not for trading and even if I were to trade it I would wait for my sell price patiently ( I guess that patience would turn my trade into an investment anyway). After a whole lot of problems Suzlon is back at making the right buzz;

Done with the news, let us move to the weekly chart below and see if there is a story there too;

Ok…from the chart above we can see that;

  1. The price is nestled between the 50 and the 20 periods moving averages.
  2. We CAN have an Inverse H&S as long as we now trade above 75/80(if we trade below it then this pattern would become suspect). The neckline being roughly 92/95 area. You are free to see the patterns as long as you don’t pre-empt them but trade their actual breakouts. It’s safe that way!
  3. A strong break and a close above 95/100 can propel it straight to 150, where it might consolidate to form yet another bullish pattern; THE CnH! And the world will then scream BUY!

Assuming this pattern thingie is all bullshit and right now is the right time to wait then the right thing would be to try and get in at 60 odd levels if you get em there!

A few more numbers to chew on;

· 52 Week Hi/lo 145.85/33.05

· Market Cap 12,913.09 Crores

· Book Value 41.73

· Face Value 2.00

By the way I DID buy some Suzlon today!

NF Hourly... DT Target Done!!!

Wednesday, January 20, 2010

Nifty...A Pause Or Signs Of Reversal???

Pharma...New Playground For The Smarts!!!

By the way all this talk about Pharma thingie I am going to put below is from an Investment point of view, traders need not even waste there time with this post!

Another sector that has been buzzing with activity is the Pharma Sector! I have not delved into individual pharma companies but have tried to gather all the buzz I could find from different newspapers and sites (yups a bit of copy/paste at work here). A due diligence ought to be done by you before entering this sector. There are plenty of companies in this field and not all of them can be THE BEST BARGAINS! Remember a rising tide lifts all boats even the leaking ones, therefore its always better to do your homework first and then think of going out and investing.

A brief intro to the pharma industry in India;

The pharma industry generally grows at about 1.5-1.6 times the Gross Domestic Product growth.

Globally, India ranks third in terms of manufacturing pharma products by volume

The Indian pharmaceutical industry is expected to grow at a rate of 9.9 % till 2010 and after that 9.5 % till 2015.

In 2007-08, India exported drugs worth US$7.2 billion in to the US and Europe followed by Central and Eastern Europe, Africa and Latin America.

The Indian vaccine market which was worth US$665 million in 2007-08 is growing at a rate of more than 20%.

The retail pharmaceutical market in India is expected to cross US$ 12-13 billion by 2012.

The Indian drug and pharmaceuticals segment received foreign direct investment to the tune of US$ 1.43 billion from April 2000 to December 2008

And now some news from all over the place;

· Baring Private Equity Partners is in discussions with a few mid-sized privately held pharma companies which could see the PE firm investing up to $150 million (over Rs 675 crore) in the next few months, a Baring executive said.

· "We are planning to set up zones for pharma products at international cargo terminals. These new zones will ensure appropriate storage condition, testing facility and custom clearances," Azad told reporters at the opening ceremony of the zonal FDA Bhavan here. At present, annual production of pharmaceutical products in the country is worth Rs 90,000 crore and out of which exports account for about Rs 39,000 crore, he said.

· Japan has veered round to considering India’s demand to open up its over $100-billion pharmaceutical market to Indian generic, or off-patent , drug producers after four years of dogged resistance, a government official involved in the talks said.

· Indian drug companies have reduced their cumulative foreign currency convertible bond (FCCB) burden by over 60 per cent. This has helped the companies improve their financial health and look for further fund-raising for expansions.

· Indian generics dominate global ranking. Global multinational drug companies’ need to outsource manufacturing to low-cost destinations like India has turned out to be a boon for leading drug companies in India such as Ranbaxy, Cipla, Dr Reddy’s Laboratories and Aurobindo. Thanks to such deals, these drug companies are now well poised to post growth in excess of 20 per cent every year for the next five to 10 years, say industry analysts.

· With drugs worth $80 billion going off patent within three years in the US, there is a huge potential for investing in India's bustling pharma sector given its capacity to produce affordable medicines. The year 2008 witnessed $20 billion of drugs going off-patent and it was $14 billion in 2009. About $35 billion drugs will go off-patent this year and $52 billion in 2011

I confess all this talk gets too cumbersome to read and follow, we should rather be seeing action with charts…Will try and put a few charts later. A very nice analysis and a writeup on one of the pharma companies can be read HERE!

Monday, January 18, 2010

SCI Views!!!

This is in continuation to my last post about the Indian PSU’s. This one’s about shipping. Yes SCI is also one of the candidates lined up for disinvestment!

The Shipping Corporation of India was established on 2nd October 1961 by the amalgamation of Eastern Shipping Corporation and Western Shipping Corporation.

Starting out as a marginal Liner shipping company with just 19 vessels, the SCI today has metamorphosed into a giant conglomerate owning 76 ships of 5.1 million DWT with substantial interests in almost all segments of the shipping trade. In addition, SCI mans / manages 60 vessels of 0.2 million tonnes DWT.

The SCI is a profitable commercial venture of Government of India and has an excellent track record of earning profits since its inception and has also been accorded the coveted status of a “Navratna” and has a market capitalization of 7454 crores!

Take a look at the chart below of the Baltic Dry Index. It’s showing some promise and signaling a reversal in shipping and increased economic activity!

And now to the technical picture where it matters the most. Below is the weekly chart which shows that SCI has broken out of 150/155 resistance and now is looking to target 200 above. With things pretty overbought and negative divergences on the indicators one does get a lil cautious. Plus the price has also drifted far away from the nearest MA; the 20 periods!

I am personally interested in this one, but my chart says BUY only when it comes down to retest the breakout levels or reverts to the 20 periods MA! That way I would be buying value. I guess I’ll pass this one for now, but aggressive buyers can get in now and ride the disinvestment buzz. For investors it’s a safe stock and can be accumulated in tranches …no hanky panky in this company!

By the way shipping as a sector also has made very smart moves, start looking around, you never know when you run into a nice bargain!!!

Sunday, January 17, 2010

The Great Indian PSU Sale!!!

It’s no secret and the buzz is already out, we are yet again staring at THE GREAT INDIAN PSU SALE 2010, with a virtual free hand in the parliament the biggest operator (the Government...chk the PSU market share here) is all set to unleash a mega sale!

  • PSU stocks hogged limelight with divestment being the flavor of the season. The government aims to sell stakes in about 60 firms in coming years. The Congress Party-led coalition government, re-elected for a second 5-year term last May, accelerated the stake sale process and has already sold shares in NHPC and Oil India for $1.8 billion. (Capital Market)
  • Investing in public sector companies could be rewarding as the government is speeding up the divestment process and taking measures to give them a free hand. (Business Standard)
  • The public sector undertaking (PSU) stocks gained between 1 per cent and 7 per cent on reports that the government plans fast-track disinvestment of three firms and aims to complete the process by the end of the current financial year. Rural Electrification Corporation (REC) was up 5 per cent to Rs 252.50, NMDC was up 3.6 per cent to Rs 434 and NTPC was up 1 per cent to Rs 233.10 on BSE. (Business Standard)
  • Government to sell stake in 60 companies (The Economic Times)
  • Two out of every three PSU stocks outperformed the Sensex in the past month (Live Mint)

I have already posted my views on NTPC in an earlier post, another interesting read on MTNL is here! Now the big question is with so much at stake for the Government…Are our markets behaving rational…ahem…I guess I’ll leave it here and let you make your own assumptions! A better advice is JUST FOLLOW THE PRICE AND PLAY!!!

Nifty Views!!!

Dollar Views!!!

Crude Views!!!