Market OUtlook

Hi ,
The Mayhem effect of 2006 reminds me about the fact market can change its 200 or 100 or 50 DMA crossover in 3-4 trading sessions. Keeping that as a fear in mind we all know what momentum can do to market. The last leg of momemtum before election can take NIFTY to 3635-3720 level and even 3830 levels. We need two things Reliance to consolidate above 1825 levels. Else market cannot test these levels. Banking to support the upsurge.
Now take a closer look at laggards and movers.
Prefer Cement Stocks: its investor heaven but not any more till august: Rainy season impact
Automobiles: Low base effect played an important role but going forward I seriously doubt the fact that automobiles is a space to stay invested.
Reliance: GRM's will be under pressurebut momentum can do anything. Banking except the great HDFC and AXIS i doubt other banks has credentials to take an upward surge from here on. ICICI can do a little on upmove.
Others LT and Bhel: Will come in to support falling market but it would be difficult when momentum reverses.
The three crucial levels of break down are 3539-3547. than 3603 and 3672 and 3841.
As defensive move keep shorting Index at these levels with tight sl above 10 pts from the recommended levels. I dont see market to fall below 2960 but at the same time elections, govt and other clouds cannot allow momentum to get bigger and bigger and if it goes big sell sell sell. Everyone has stocks in the portfolio. Rather than exiting use nifty strategies at recommended levels to hedge position and use right breakdown signals to exit all the stock position. If marlet after touching 3547 closes below 3422, breakdown will start with a tgt of 3230 and than lets market decide further breakdown or not. Market is in a place where it can easily shed 40% of its gain i.e 400 nfty pts on a slight negative news. This is a right time to catch on unrealized profits with SL to confirm you exit with a profitable position. For eg. If JK lakshmi cement closes below 56 than the stock momentum is dead for a while but on contrary keep a hold wid a tgt of 72 test way back to 64 and than 83 in days to come. Similar for Zylog do not exit the position if you ar holding on to it. Wid a SL of 121 remain long the stock will test 157 and 183 sooner than later.
This is an Outlook on market for next week. Strenght is not visible to me but going against momentum at current levels would be suicidal. Sell at right time make small entry and exit with tight sl one can make more profit. Last resistance is wht one shld look to cover the position on shrt as it acts as a support for this time

alok industries

I do not deny the fact that it cannot touch 1 or 10 rs. But I cant stop people from selling Gold at throw away price. The Debt and Equity of the firm is a consideration. But investment positives over shadows few concerns. Like

Concern 1: D/E makes it finanically over leverage agreed. Think from restructuring prospects for the firm it has raised huge amt through Right Issue.

Concern 2: I am not a fool, after considering the EPS post dilution its still available at a PE of 4.5-5.

COncern 3: Profit: If its not a Satyam it definitely has posted true results in that case. The Cash in balance sheet is at 9% of debt through NEt profits add 440 crores added throughdilution and rights. The company can reduce its debt to almost 50%.

Concern $: Its all in the mind. A company that has posted a growth of over 20% in last 5 years is available at PE of less than 4 come-on I assure you you people will find this stock attractive at 45 when my analyst frieds after decent accumulation will come and talk about it.

Now the fact, It has huge stake in Grabla ALok an established player in Infra space too . If i am not wrong their subsidiary bought 950 crores of property to yield 14% return through rent,Assuming that they lost 35% of value on investment still is worth over 700 crores. Market Cap at less than 1000 crores a d/e on higher side but still they have been giving good expansion growth. One simple equation if stocks like Nocil can be market flavor this definitelly qualifies for a buy.

Chart Patterns showing sign of revival and tgt is 18.55, 23.1 looks reasonable time frame 1 mnth. Forgot to mention if you hold this stock for 3- yrs it ight even hit a half century. Its IPL season thats why nos are Century Half century. This is not an investment idea its a rationale. Calculate your return from NSC and make the mistake of buying it at 45. ELse spread your investment between 13-16. This is a long term horse nd is likely that it will stay and give returns despote poor leverage and high risk attached to it Nothing worse is visible. Te stock is at 10% from its peak.

ALOK INDS

Alok Inds can test 18 85 with volumes building in around 16.15 a tight SL of 15.40 the stock can be bought wid a tgt of 18 85 and 19.70 in days to come.
The stock is a great value buy wid EPS of over 6 and F n O stock can be another hunting ground of speculators 20-22%% in a days time or so
SCRIP code 521070

Nifty trading Strategy

Right time to go long on PUT 3300 for NIFTY and hold it will definitely touch 80 in days to come currently at 53

Midcaps are Blazing like fire when Large boyz are consolidating

Its another round of irrational exuberance or are we trying to break the ice with the help of midcap. No way I see data has bottomed out. The only issue is Speculative players has given an igntion to market. DO not chase handsome returns with am 3-4 day view also because one will definitely be stuck and the circuit story will not allow you to exit. It looks good that one makes profit on papers but can you actually expect this to continue. Three rallies and a downturn. We need to cross 3466 and beat the 200 DMA which is not a certainity. From all angles its a sure short play for shorting index because on upside you will have a tight stop loss and also strong resistance. History suggest that bulls try to exit before 200 DMA expecting other players to beak the ice and thus they have to attmpt twice or thrice . This is first significant attempt thus it will fail in all circumstance on downside I don see any reason to fall below 2720 either. Right now best way to stay in market is increase your SL for your invstment holdings and book profits on every rise.
One stock that will hog limelight is SIntex Industry its up on charts needs one strong move and can give 20% return from here on. Hold on Mid Cap IT, The satyam saga can extend to beaten down valuation of these players. Keep a strong watch on INFY mgmt guidance be4 trading into market. But I Don see next year guidance beyond 109 thus the stock is available at 14 times forward a PEG of 1 will mean the stock should at one point of time will see atleast 1282 on downside. Who knows if the result is better than poor expectaton the stock can rally to 1578 also in two or three days but tha flow should always be used as an exit. Even in uncertain times we have lot many small medium and large cap avilable at less than .5 book and PE of 6 max which is reasonable in financial prudence to survive the thunder of slowdown.

Is the bear dead????

Market showing irrational movements is a clear indicator that we are in the grip of a bear phase though sentiments have improved across the globe but this run up is not sustainable. One major reason is th rally is not concentric, its broadbased name a sector which is not up by atleast 25% mid cap line up( i mean). For a good base to form or even a bull run to take place leaders should be identified but this run is a mixed bag Realty, Banks,CAP goods IT Oil gas all up in disproportiontae form. SO this is first indicator that we will slide again. Use the last phase of short term rally to exit. Penny stocks have also started hitting cirucits.
The next trigger is Elections. Data really reflect that there has to be a rally post election if stable govt forms which is a big question in itself. In India for years I see mili juli sarkar.
This is a macro sense of equity linkages. Now lets see what my analyst friends have to say.
Without offence these were people who told @8000 we are in deep trouble. Nothing happened to Index on downside but on upside after a decent rally these players talk about bottoming of Indian economy IIP numbers etc etc... I seriously doubt there conviction and understanding on our market. I am not an investor with decades of experience but last 5 years have taught me a simple game that large players play. This rally needs a decent 1000 plus point correction on Sensex if at all it has to improve my belief that we have bottomed out. We need to see large cap going up and mid caps to stuck and only selected sectors to make a move thus giving us a sector as market leader.
I dont see India going ahead to post the phenomenal 7-8% growth with the widening of deficits. If manifestos will provide free things to poor and higher tax scale to middle class. From were the Government will get money from to fund for Infrastructure. They will burden us with debt. How can we grow. Politicians are promising something for their vote banks I pray this time let it be words of promise what they are famous for because if they implement this time market can test 8000 also. Yesterday IIP nos are significantly lower and if this continues for couple of quarters also we are in midst of contraction and we will stagnate somewhere between 3.8-4.67% in next two to three quarters.
Newsmakers can cheer for Inflation at 0.26% but for me is Inflation really down except for energy pack we are not actually down. Two yrs back the Cooking Oil was 78 rs a litre last yr it was 115 this yr its 102. Calcualte the two yr effect, Sugar from 18 to 27 and god knows if ts gonna be 30-32 in shrt term. Flour 10 kg bag from 192 to 210+ ( in Subhiksha Stores Aashirwad atta) in one year where have we gone down. Pulses dal are in the range of 50-70. Potato from 9 to 11.5 and so on. The list is not ending and i dont see any reason for us to cheer. Newsmakers have got same things to interpret in different ways.Business channels whethers its 18 or profit they create hype over simple issues. Beware investor frieds about mid cap F N O stocks you may hit fortune overnigt and also turn beggar the next morning. Ispat 17.5 call was at 1.5 it CMP was at 14 rs. and 15 put available at 2.5 day be4 yesterday. Write 17.5 call write 15 put and go long on 12.5 put go long on share. A strategy that many players would be using to make money as it seems quite interestingly poised on risk reward side. This is a BOX formed pay off is profitable above 13.2 till the range of 18.5. Its irratonal again "happy investing" but beware market does not allow so easy profit and large range scalability as visible you can burn your hands stick out your neck from this position if you are not high risk player as I did.

Zylog Systems

This stock seems to be at a level which is lucrative xciting and definitely a multibagger. The EPS of the company stands to be close to 50 plus the stock is at a level of 100. The company when got listed was identified as one of the great company to invest and made high of 400 plus. Now with stock market retreating itself I guess the stock is shadowed in BFSi sector but good part about the company is it is giving sustinable growth all the ratios are close to its peers and business model is sustainable in tough times too. With expansion going through smoothly and lttle debt in the company the stock can touch 135 and above provided it holds 94.8 on clsoing basis. Yesterday it make an attempt to give a break out .Today i Guess it ll cross yesterday high and than fresh buying interest will come in. Technically the stok made a low of 61 from where it has gone up by over 67% if i believe technical the stock will give 128% rturn from its lows on a smooth run that iss close to weekly signal on charts too. So tgt of 135 looks achievable provided the accumulation was done by some good investors. Otherwise too look at polaris mphasis and other stocks I guess the valuation play will give atleast 100% plus in 2-3 qrtrs.
Nifty has seen fresh put being built at 3300 levels that is also a resistance level around 3380-3402. Do not get overwhelmed today could be used as a day to exit market is doing more than fundamentals. Though stock are there which can be looked with great respect and buy. i still reteriate a buy on JK lakshmi and unity though it has been up 20% in last two days. Buy such stocks but don get excited if it gives you great returns in short term exit becasue you people do not invest with a sense of owning a business else stay invested in all three.

Aashish

Stock market:Invest as if you want to own the business

The art of Investing is buy low and sell high People who made money are the ones who bought stocks in tough time and made exit when peple were too comfortable with equiy market. Investment opportunities are available in plenty. At this point of time I thought of being an entreprenuer but no i feel I will buy small chunks of the stocks that will be making money for me & buy the servuce of experience management too is free. In this respect i would share two ideas time frame is unknown but it would definitely be a multi multi bagger in bull run. No. 1 unity infraprojects This stk is available wid lot of comfort in terms of Book value and order book. The most reasoable thing about this stk is its valuation less than 2 times its net profit and if I expect that they will not grow by 5% also still the valuation is at mouth watering levels.For full year the stock EPS will be 37 odd next yr it is somewhere in the range of 38.85+ its existing assets worth over 103 plus this means on NAV basis the stk two yrs down the line will be at 176 rs cash level add more the assets and decent order book unexecuted part. The stock will be a doubler atleast from here in less than two years and if bulls go crazy it may command a minimum PE of 6-10 times meaning 3-4 times return from current level. Another stock that interests is J K Lakshmi Cement available at 1.6 PE where its peers are anywhere between 7-8 times decent growth and dividend yield expected due to expansion. PE of the stock less than two thus the stk can be in three figures in six months time currently at 53 . I know difficulty is to time market but the best way is to invest and remain invested. I own definitely an Infra COmpany and a cemet industry common stock as an entreprenuer I am making money in the first year of my investment and my ROE is somewhere in between 30% what else should i ask for. Thank you investors for patient reading but these stocks will hog limelight as these are gems of mine with lot of due diligence and understanding I am recommending you all. Own these business today for reasonable return from Business perspective. Invest for your future today and dont get jittery if it falls in the short term and dont get excited if it gives decent returns. You will mint money in three yrs to 4 yrs atleast twice of what you make in NSC bank Fd or any other instrument ( COnsidered safe).

We need to grow up before we say India is growing

Blame it on ourselves or our representatives who are sitting in Lok Sabha that India stands in a position where it will grow at a rate of 3-4%. Hindu Growth rate is what we were able to benchmark almost 15 yrs before but we dont want to go to that slow level again.
If so educated ones please Vote and choose people who do not promise you a Rice at Rs 2 per kg. Its same for all parties No manifesto talks abt reducing corruption makin it convinient for people to have access to Domestic gas but they in turn give you Television as u r poor. I thank god that Tata Nano 1 lac dream is a failure( assuming base model is useless). U politicians seriously s**k no offense to any party but the main objective is India should shine seeing the manifestos I feel Election Commission should allow purchase of vote atleast that will churn the black money of politicians to common man. We tax payers will not have to suffer the burden of Rs 2 kg a rice or Television. Next election manfesto will have Nano or atleast a honda bike and access to hotels free for our poor brothers but rather than creating oppportnities for this poor brothers of ours these politicians will kill the taxpayers and everyone doubts whether these will will ever actually go to the hands of poor. The definition of poor in party context is the ones who distributed manifestos who were part of rally. So hardly 500 TV and 500 tons of rice but centre will definitely be billed at 10% of total production. HAAHAA its shame on us but the onus is also on us choose the right party with right agenda I did not find any so please hlp me whom to vote for.
I apologize for some harsh statements this is not to hurt anyones belief or sentiments but this is a fact that all this will lead to another scam and the situation we are in I doubt we can take another scar on our face in shrt term Jai Hind