Technical View - Aug 25 2010

Technical View - Aug 25 2010

Technicals, Trends - June 18 2010

Technicals, Trends - June 18 2010

India Technicals

Nifty — The index opened on a flat note and tested 4549 in opening trade, after which it drifted down throughout the session. It ended the day down 31 points.

Range bound trading — The index is stuck in a trading band of 4549-4446 for the past 11 trading sessions. Resistance is seen at the upper end of the range with support around the lower end of the range. If the index closes below the 10 dma at 4502, it could decline towards 4446 levels.

Conclusion — Expect range-bound trading with intra day declines towards 4446.

India Technicals

Nifty — The index opened on a strong note and traded range-bound though positive throughout the day session. It ended the day with a gain of 100 points.

5 & 10 dma — The index is trading below the 5 & 10 dma. Pullback towards the averages can be expected .The 5dma = 4248 and 10dma = 4313. Intra-day strength can be expected on sustaining above 4248.

Support — On the downside, intra-day support can be expected around 4189 (lower end of yesterday’s intra-day consolidation). Lower support can be seen around the 4163-4132 band (38% and 50% retracement level of the advance from
low of 4003 to 4261).

Conclusion — Expect rise towards 4248 with support around 4189 levels.

Technicals, Futures, Outlook - Aug 14 2007

Technicals, Futures, Outlook - Aug 14 2007

Technicals, Outlook, Futures, Analysis

Technicals, Outlook, Futures, Analysis

Technicals, Futures - August 8 2007

Technicals, Futures - August 8 2007

Technicals, Outlook, Futures - August 8 2007

Technicals, Outlook, Futures - August 8 2007

Technicals, Futures, Outlook

Technicals, Futures, Outlook

Technicals, Futures

Technicals, Futures

Technicals, Futures Strategy - July 25 2007

Technicals, Futures Strategy - July 25 2007

Citigroup - India Technicals

Citigroup in their daily tech,

Nifty — The index opened on a positive note, after which it dipped toward 4,312 during the afternoon trading. It saw a recovery during the remaining part of the day’s session. The index ended the day down 4 points.

Trading around a high of 4,363 — The index is trading around a 4,363 high amid intra-day volatility. Intra-day rise is facing resistance around 4,363. Until the index stays below the 4,363 high on a closing basis, range-bound movement with high intra-day volatility should be expected.

Support and resistance — The index has support around 4,314 (low of 3 July 07) and 10dma at 4,305. Intra-day dips should find support around these levels. The resistance level is around 4,386 (high of 4 July 07).

Conclusion — Range-bound movement within 4,305-4,386 band can be expected.

Citigroup - India Technicals

Nifty — The index opened on a positive note and tested 4,386 in the morning trade, after which it tested a low of around 4,342 and traded in a narrow range .It ended the day up 1 point.

Tests all-time high — The index tested 4,363, an all-time high, in the morning trade. It opened towards 4,385 in the morning trade. The support levels are around 4,340 (lower end of yesterday’s consolidation band ) and 4,326 (5dma). Intra-day dips should find support around these levels. On the upside, intra-day strength can be seen on Nifty sustaining above 4,363 and index can move towards 4,385 levels. [dma=daily simple moving average].

Conclusion — Expect intra-day strength of above 4,363.

Citigroup - India Technicals

Citigroup in their daily technical report,

Nifty — The index opened on a positive note and moved toward 4347 in the morning trade, after which it retraced most of its day's gain toward the close. The index ended the day down 4 points.


Resistance — The index is facing resistance around the 4363 “All-Time High;” Intraday it posted a high at 4347 but retraced most of the day's gain toward the close. Intraday rise will face resistance around the 4347 level.

Support — The index has support around 4296, the breakout level of its previous mid-week consolidation band. Intraday dips should find support around 4296. Lower support is around the 10 dma at 4271.

Conclusion — Intraday dips should find support around the 4296 level.

Citigroup - India Technicals

Citigroup in their technical daily say,

Nifty — The index opened on a flat note and and traded sideways in the opening hour after which it saw a rise towards 4296.The index ended the day up 27 points.

15 Minutes Chart — The index posted a double bottom at 4272 on the 15-minute chart. It traded around the breakout level at 4289 and closed around 4286. The index could see a rise towards 4300 levels intra-day.

Support — Index has intra day support at 4272,break of support at 4272 can see intra day volatility and index can decline towards next support at 4236 (low of 25 June 07).

Conclusion — Expect a rise towards 4300.Break of support at 4272 can see intraday
volatility.

Bulls lacking appetite to stop bear sales

The indices turned tail in the latter half of the session as per expectations that I advocated yesterday.

The weekend nervousness was apparent as the traders were unwilling to rollover positions initiated at lower levels. That exposes the weakness in the underbelly of the prevailing sentiments in the market. Traded volumes were in line with the previous session as the traders refused to enhance commitments.

The market breadth was marginally positive as the BSE & NSE combined figures were at 1837 : 1729. The capitalisation of the market breadth was also positive as the combined exchange figures stood at Rs 7082 cr : Rs 5397 cr.

The F&O data for the previous session indicated a marginal increase in the PCR and fresh net long positions being created.

The indices have closed at the lower end of the intraday range and that too on steady volumes. The fall may be attributed to the weekend blues that professional day traders suffer from.

The 4208 resistance specified for Friday held as the Nifty retraced from the 4209 top, and the closing was lower than the opening levels, indicating a key reversal on the daily charts.

The bulls will retain charge of the sentiments only when the intraday high of 4209 is overcome with higher commitment from bullish traders. Watch the traded volumes / open interest / implied volatility along with the prices in the coming days.

The outlook for the markets on Monday is that guarded optimism as the bulls are still to show the fire power needed to overcome the combined forces of bear selling and gravity to take markets higher. Till the overhead supply exists, desist from bulge bracket purchases.

Citigroup - India Technicals

Citigroup in their report on India Technicals,

Nifty — The index exhibited high intra-day volatility. It opened on a flat note, traded sideways in the morning session, dipped down towards 4100 in the afternoon session, and saw a rally towards the close. The index ended the day up 9 points.

10&20dma crossover — The moving average crossover in the daily chart is negative
(i.e. the 10dma has crossed the 20dma from above); 10dma=4222 and 20dma=4231. Intra-day pullback will likely face stiff resistance around the averages. [dma = daily simple moving average]

Support — The index has support around 4126 (intra-day it whipsawed 4126 but closed above it) and 4072 (low of 14 May 07). Intra-day volatility can be expected if Nifty breaks the 4126 level.

Conclusion — Intra-day pullback will face resistance around 4200 levels.

Bad Friday Ahead

The Nifty lost 19 points over the day to close at 4179. A day ofextreme volatility that saw the Nifty move between 4150-4210 a fewtimes making trading difficult both for the bulls and bears. Eventuallythe bears turned out victorious as the indices closed near the days lowand below the support of 14200/4200. During the volatile action theNifty achieved the “Wedge” pattern target of 4150, which wepresented in our weekly report. The volume activity was very stronghinting at a fierce battle between the bull and bear camp. The reactionhas led to the oscillators testing the oversold line while the 30-EMAhas also been tested. Also, an important trendline breakdown hasbeen confirmed on the daily chart that would have a bearish effect onthe price action in the near term (See Exhibit 1 on Page 2). Fortheday, major support seen at 4150 and 4100 while resistance seen at4184 and 4196. Overall, with a fresh breakdown confirmed yesterdaybelow 14200/4200, the indices are likely to correct further and getclose to 14000/4100 in the extreme short-term.

Citigroup - India Technicals

Citigroup in their daily technicals say,

The index opened on a flat note and traded sideways in morning trade, after which it rose for the remaining part of the day’s trading. It posted an intra-day high at 4299, ending the day up 36 points.

The index is trading in an upward sloping channel, finding support at the lower end and resistance at the upper end. Channel projection on the upside is around 4355.

The index has support around 4245 and 4239 (10dma). Intraday dips are likely to find support around the 4245-4239 band.

SAIL, Omax Auto, Jyothi Structures, BHEL, Motherson Sumi, India Technicals

Angel on SAIL

Better-than-expected Q4FY2007 performance: Public sector steel major, SAIL, reported a better-than-expected performance for the quarter ended March 2007 (Q4FY2007). It reported a yoy Topline growth of 15.7% to Rs10,385cr (Rs8,980cr). This was primarily led by higher realisations even as volume sales declined during the quarter. It must be noted that the company is already operating at around 119% capacity utilisation, which leaves little room for volume-led growth until new capacities come onstream.

At the CMP, SAIL trades at 11.8x FY2009E EPS, 6.8x EV/EBITDA and P/BV of 2.3x. Considering current valuation of the stock and the outlook in the medium-term, we maintain our Neutral view on the stock.

Angel on Omax Auto

In line Q4FY2007 results: In Q4FY2007 the company’s Net Sales grew by 27.6% yoy Rs181.2cr. The company sustained its margin improvement achieved in 9MFY2007 on the back of a lowered cost base. Operating Profit grew 59.3% yoy to Rs16.3cr. Net Profit grew 116% yoy to Rs8.1cr mainly on account of an 88.2% jump in Other Income. Omax has lowered its operating cost base over the last two quarters and will further benefit from partial captive sourcing of steel and higher capacity utilisation at its Bangalore and Binola plants.

Valuation: At the CMP, the stock trades at 7.3x FY2008E and 6.5x FY2009E Earnings. It appears very attractive at EV/EBIDTA of 4.7x FY2008E and 3.7x FY2009E. We maintain a Buy on the stock with a Target Price of Rs105.


Angel on Motherson Sumi

Consolidated Performance: Motherson Sumi Systems (MSSL) reported Net Sales of Rs462.7cr for Q4FY2007 as against Rs305.4cr in 4QFY2006. The results are not exactly comparable with the corresponding quarter of last year, as Q4FY2007 results include Motherson Advanced Polymer (MAPL) numbers, a 100% subsidiary amalgamated with MSSL with effect from February 1, 2006. OPM, for the quarter, was flat at 16%. Net Profit was Rs45.7cr (Rs42.2cr).

MSSL is a leader in wire harnessing and controls over 65% of the domestic passenger car market. The company is now focusing on the supply of higher level assemblies and modules where the Margins are comparatively higher. The company is also increasing content per car to diversify its product portfolio. MSSL is laying emphasis on its global product plan (GPP) wherein it would enter into JVs with leading tier-I suppliers to upgrade its technology base and increase clientele. MSSL targets to achieve 60% of consolidated turnover from overseas clients. The company expects to continue exploring opportunities in the non-automotive segments, which contributed 15.8% to FY2007 consolidated Revenue compared to 13.8% in FY2006. Increased
share of non-automotive segment is expected to help the company de-risk its business.

We remain positive on the company. We believe MSSL will grow at a CAGR of around 30% over the next two years. We upgrade our consolidated EPS for FY2008E and FY2009E to Rs6.9 and Rs8.4, respectively. At the CMP, the stock trades at 20.4x FY2008E and 16.6x FY2009E consolidated earnings. We maintain a Hold on the stock with a Target Price of Rs130.


Angel on BHEL

Net Sales surge: For Q4FY2007, Bharat Heavy Electricals (Bhel) reported a strong yoy growth of 25.5% to Rs6,919.7cr (Rs5515.7cr). For FY2007, the company reported growth of 29.7% to Rs17,237.5cr (Rs13,289.28cr). This was expected FY2007 being the last year of the Tenth Plan.

Strong Order Book: Bhel clocked a sharp increase in order inflow of more than 88% (5%) to Rs36,300cr (Rs1,9318cr). In absolute terms, order inflow increased by around Rs17,000cr as against a relatively moderate increase of Rs2,650cr in turnover has resulted in an unexecuted order book of Rs55,000cr, an increase of 47% (18%). Of this, the power segment, which accounts for more than 70% of the company's revenues, contributed Rs27,700cr with orders for nearly 9,900MW of capacity being booked during the year. Apart from this, transmission sector orders doubled to Rs1,170cr. FY2007 has been a significantly better year than FY20, in terms of the order intake and order book position, which had grown at a modest rate of 5% and
18% only in FY2006.

Bhel has grown at a CAGR of more than 25% in terms of sales over the past three years. With significant growth in sales, and fixed cost getting spread over a larger base, profits have risen sharply by around 43%. The growth in sales came on the back of a strong order book and government initiatives in the power sector. Going ahead, we expect a slow down in order book to slowdown as there have been issues regarding delays in execution, capacity limitations of the company and the government requires faster execution of the projects to meet the targets set for the Eleventh Plan. The Central Electricity Authority (CEA) had undertaken assessment of preparedness of Bhel to meet the capacity requirement of the power sector during the Eleventh Five Year Plan. The report stated that while some of the delays in the Tenth Plan were on account of state power utilities, major delays have been attributed to Bhel -- “major delays are attributable to Bhel”. Hence, the Ministry of Power has held Bhel responsible for much of the delays in the Tenth Plan, which led to a shortfall of nearly 15,000MW in the period.
At the CMP, the stock trades at 22.2x and 18.2x FY2008E and FY2009E EPS. With valuation stretched and sustained earnings momentum also factored in, we remain Neutral on the stock.


ABN Amro Technicals

The broader indices namely BSE Midcap and C NX 500 are trading near their weekly resistance levels. However, the BSE Smallcap index seems to have some more steam left on the upside. All the major sectoral indices namely, Auto, Capital Goods, Consumer Durables, Healthcare, Oil & Gas, PSU and Bankex are trading near their medium term resistance levels. However, IT Index is trading near the lower end of its channel which suggests the fall in the sector is likely to get arrested in the short term.
The FMCG Index and the Metal Index are also showing some strength in the near term.
To sum it up, the broader indices and major sectoral indices are near their strong resistance levels, after the recent up move. Therefore caution and some profit booking is advised in the short term.

BSE Midcap Index is trading near its weekly trend line resistance of 6187 and 6314. Sustaining above 6314 on a weekly basis can take the index to 6600. On down side support is at 5752.

BSE Small Cap Index faces resistance at 7510; currently the index is in mid way suggesting that it can still witness some up move. Support comes at 6971 and 6815 thereafter.

CNX IT index is trading near its lower band of long term channel hence the chance of bounce back is not ruled out. It needs to sustain and make a good base around 5060, from where it can rally to levels of 5900. In case support is broken on monthly basis it could be headed towards 4500.


ABN Amro on Jyothi Structures

Strong sector growth outlook: The transmission business has high visibility over the next few years, with a continuous focus on improving the power infrastructure in the country. Projects such as Accelerated Power Development and Reforms Programme (APDRP), Rural electrification under Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and measures to reduce Aggregate Technical & Commercial (AT&C) losses by upgrading the Transmission & Distribution (T&D) infrastructure would drive demand for the services rendered by the transmission companies. An investment of Rs4270bn is envisaged during the 11th 5 Year Plan on various schemes in the T&D sector.

Valuation: JSL’s revenues and PAT are estimated to grow at a CAGR of 33% and 51% between FY07- FY09. At the CMP of Rs185, JSL trades at 17.3x FY08F EPS of Rs10.7 and 11.8x FY09F EPS of Rs15.7. We reiterate our Buy call on JSL, given the high earnings visibility for the sector, and greater comfort over management