Tuesday, 23 September 2008

Buy: Federal Bank

CMP: Rs 219.60
Target: Rs 242 (Short term target)
Recommended By: Hindu BusinessLine
Reason: Technical Analysis

Buy: Havells India

CMP: Rs 300
Target: Rs 450
Recommended By: KIM ENG Securities
Reasons: stock is down 60% year to date; Business growing at 20%; year and next year of about 20% of growth

Tech Stocks

Technical Analyst, Rajat K Bose is of the view that Technology stocks are suggesting more weakness ahead.
Bose told CNBC-TV18, "Technology stocks are suggesting more weakness ahead, especially if you look at TCS and Wipro. They are suggesting that more downside perhaps would be there going forward and TCS falling below Rs 715-710 range could mean that another 40-50-point cut in the short-term is likely. Only some amount of strength is still there in Infosys of course firstly the strength will evaporate, if Rs 1,500 were to be broken." He further added, "Satyam, I would say that as of now you can only hope that Rs 324-320 level holds, if it doesn’t then it will also experience quite a deep cut."

Source: MoneyControl

Sugar Stocks

Rajat K Bose, Technical Analyst, has said that one can buy Sugar stocks at lower levels with a medium term perspective.

Don’t buy on dips, stay cautious: Sajiv Dhawan

It was another day of weakness on Dalal Street. The indices were bogged down by stocks in IT, realty, and banking getting battered and finally closing near the day's lows. The Nifty closed at 4,127 down 96 points, while the Sensex shut shop at 13,570 down 425 points.

Sajiv Dhawan of JV Capital Services said this is not time to be aggressive and start buying the index as a contrarian call. "You need to see where this market is going to breakout. That means at least a 100-150 points on the upside. There is no point trying to trade the Nifty for just 20-30 points, that’s too tricky for most traders at the moment."
He feels investors should remain cautious and sit on the sidelines rather than buying this dip. "We have been advising clients for the last several weeks that 4,500-4,600 was the cap for the market, there is no reason for it to go above that. We had that good bounce back to 4,300, but have seen a lack of follow-up buying. The markets are still very concerned because the situation in the US is very fluid. It’s very difficult to call whether it’s going to hit 4,300 or 3,800 first. But any investor who comes in at 3,800-4,000 levels can hold on for three-six months and will see decent upsides. But timing in short-term is very tricky."

Source: MoneyControl

Market Volatile

Dhiraj Agarwal, Independent Market Analyst, feels the markets will continue to remain fairly volatile with significant amount of downward pressure. "The market will continue to remain fairly volatile with significant amount of downward pressure. We will continue to see very large single day moves, which is not very healthy. This volatility needs to tone down for any meaningful recovery to happen. I won't rule out a retest of previous lows from which we bounced back because of liquidity and sentiment at this point of time. I don't think there is too much downside from a valuation perspective, but there could be some more hammering down from flows or sentiment perspective."

He sees about 3,800-3,900 on the lower side and about 4,500 on the upper side as the current range for the Nifty. "It is impossible to say whether we break through 3,800 or not, but even if we do, we will go down to significant new lows. I don't think the range will persist through the year. The range will break on one side or the other as we go towards the end of the year. After chopping around a couple of times in this range, it will probably break-up towards the end of this year in a strong bear market rally. Such high volatility after a deep cut or a strong rally is usually a sign of a trend reversal. However, we see a number of bouts of ups and down before the trend reversal finally sets in. "

Source: MoneyControl

Goldman Sachs and Morgan Stanley loss is IT's gain!!

When Goldman Sachs and Morgan Stanley gave up their independent investment banking status, it gave reason for Indian IT vendors to smile. For, more regulations, as a commercial bank, could mean more business for software service providers. While the collapse of the other investment banks in the past few months sent jitters among the software vendors in India, government control of Goldman Sachs and Morgan Stanley gave the Indian IT some reasons to cheer. Because, morphing into a full-fledged bank not only implies greater access to funds but also more regulation. And tighter regulation could mean tweaking their existing technology by adding more software and processes. They would have to adopt systems in areas such as retail banking, consumer banking, cards and corporate banking.

Source: Economic Times

Stocks to buy

CMP: Rs 721
Target Price: Rs 938
Recommended By: Citigroup Global Markets
Reasons: Small acquisitions and the buyout of a majority stake in Pharma Dynamics of South Africa
Rating: Medium risk

Opto Circuits
CMP: Rs 287.25
Target Price: Rs 463
Recommended By: Kotak Securities
Reasons: Strong market positioning, potential introduction of new products, front end R&D set up (with the Criticare acquisition) and strong management.
Rating: Low risk

DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.