Five picks to beat market volatility ahead of RBI policy review
NEW DELHI: The Indian markets ended the volatile week in the red, led by weak global environment and profit booking in rate-sensitive stocks. The Sensex and the Nifty slipped over 1 per cent each for the week ended March 15, 2013.
Investors will remain cautious ahead of the Reserve Bank of India's mid-quarter monetary policy on March 19, Tuesday. The decision on key policy rates by the RBI is likely to set the trend for the market this week.
On the global front, the Federal Open Market Committee (FOMC) will hold a two-day meeting on the interest rates in the United States on March 19 and 20, 2013.
Last week banking stocks came under pressure on fears that the RBI may not cut interest rates at its mid-quarter review, amid rising retail inflation.
The foreign institutional investors (FIIs) were the net buyers of the Indian stocks worth Rs 2663 crore during the week till March 14, 2013, while the domestic investors were the net sellers of Indian stocks to the tune of Rs490.3 crore till March 14, 2013, said a Sharekhan report.
The Nifty had rallied from a low of 5663 made on 4th March 2013 to a high of 5971 on 11th March 2013 last week. The stock has thereafter remained in the range of 5790-5950 in the last few trading sessions.
"We expect the Nifty to remain in the range of 5790-6030 in the coming week. The support levels on the downside are 5850 and 5790 while the resistance levels are 5910, 5970 and 6030," said Vinit Pagaria, VP - Investment Strategies at Microsec Capital Ltd.
"The intra-day volatility has risen sharply in the last few trading sessions and is likely to remain high in the short term. The markets are likely to follow global cues," he added.
Cummins India Ltd: Expects 18% upside; Target price at 592
Over the last few years, the company has reported steady revenue growth and is expected to continue with huge capex plan in the next few years. As regards to the export market, the company expects growth to be about 5-10 per cent in FY14. The brokerage expects the stock to see a price target of Rs 592 in one year time-frame on a one year average P/E of 22.06x on FY14 (E) EPS of Rs 26.83.
Jammu & Kashmir Bank Ltd: Expects 19% upside; Targets price Rs 1568
Considering the improving prospects, consistent growth in earnings is expected. The bank continues to deliver healthy performance on business growth and NIM. On the estimated book value of Rs 1205.77 for FY14E and target P/BV of 1.30x, the brokerage firm expects the stock to see a price target of Rs 1568 in one year time-frame.
Technical picks to beat near-term volatility:
HCC: Buy for a target of Rs 18-19, with a stop loss of Rs 15-16
The stock closed at Rs 16.25 on 15th March 2013. The stock made a 52-week low at Rs 14.65 on 04th March 2013 and 52-week high of Rs 29.80 on 14th March 2012.
The 200-day Exponential Moving Average (EMA) of the stock on the weekly chart is currently at Rs 32.97. On the technical charts, there is a basing at lower levels, which indicates reversal in the coming weeks.
Moreover, the stock has also formed a Japanese candlestick pattern called 'hammer' which signifies that there should be an aggressive buying with volumes. Both of these conditions indicate that it may reach our desired targets in the near term.
Investors can 'buy' the stock in the range of Rs 15-16 levels with closing below stop loss of Rs 14 levels for the target of Rs 18-19 levels
Lupin Ltd: Buy with a target of Rs 650-600 with a stop loss of Rs 575
The stock closed at Rs 609.80 on the 15th March 2013. The stock made a 52-week low at Rs 490.35 on 16th March 2012 and 52-week high of Rs 631.95 on 10th September 2012.
The 200-day Exponential Moving Average (EMA) of the stock on the weekly chart is currently at Rs 434.38. Being the defensive scrip, it is still in its upward trend negating the volatile sessions of the broader index.
Last week, it remained positive despite weakness in all other counters, which signifies its potential to continue its upward momentum in near term.
One can 'buy' in the range of 595-600 levels with closing below the stop loss of 575 levels for the target of 650-660 levels.
Mahindra & Mahindra Ltd: Buy with a target of Rs 960-970, with a stop loss of Rs870
The stock closed at Rs 927.70 on the 15th March 2013. It made a 52-week low at Rs 621.10 on 18th May 2012 and 52-week high of Rs 976 on 19th December 2012. The 200-day Exponential Moving Average (EMA) of the stock on the weekly chart is currently at Rs 670.63.
As we can see on the chart, it is in uptrend, but after retracing from Rs 950 levels it made fresh buying pivot at Rs 850 levels and traded in a positive manner in the last few weeks, which determines its strength.
One can buy in the range of Rs 900-910 levels with closing below a stop loss of Rs 870 levels for a target of Rs 960-970 levels.
NEW DELHI: The Indian markets ended the volatile week in the red, led by weak global environment and profit booking in rate-sensitive stocks. The Sensex and the Nifty slipped over 1 per cent each for the week ended March 15, 2013.
Investors will remain cautious ahead of the Reserve Bank of India's mid-quarter monetary policy on March 19, Tuesday. The decision on key policy rates by the RBI is likely to set the trend for the market this week.
On the global front, the Federal Open Market Committee (FOMC) will hold a two-day meeting on the interest rates in the United States on March 19 and 20, 2013.
Last week banking stocks came under pressure on fears that the RBI may not cut interest rates at its mid-quarter review, amid rising retail inflation.
The foreign institutional investors (FIIs) were the net buyers of the Indian stocks worth Rs 2663 crore during the week till March 14, 2013, while the domestic investors were the net sellers of Indian stocks to the tune of Rs490.3 crore till March 14, 2013, said a Sharekhan report.
The Nifty had rallied from a low of 5663 made on 4th March 2013 to a high of 5971 on 11th March 2013 last week. The stock has thereafter remained in the range of 5790-5950 in the last few trading sessions.
"We expect the Nifty to remain in the range of 5790-6030 in the coming week. The support levels on the downside are 5850 and 5790 while the resistance levels are 5910, 5970 and 6030," said Vinit Pagaria, VP - Investment Strategies at Microsec Capital Ltd.
"The intra-day volatility has risen sharply in the last few trading sessions and is likely to remain high in the short term. The markets are likely to follow global cues," he added.
Cummins India Ltd: Expects 18% upside; Target price at 592
Over the last few years, the company has reported steady revenue growth and is expected to continue with huge capex plan in the next few years. As regards to the export market, the company expects growth to be about 5-10 per cent in FY14. The brokerage expects the stock to see a price target of Rs 592 in one year time-frame on a one year average P/E of 22.06x on FY14 (E) EPS of Rs 26.83.
Jammu & Kashmir Bank Ltd: Expects 19% upside; Targets price Rs 1568
Considering the improving prospects, consistent growth in earnings is expected. The bank continues to deliver healthy performance on business growth and NIM. On the estimated book value of Rs 1205.77 for FY14E and target P/BV of 1.30x, the brokerage firm expects the stock to see a price target of Rs 1568 in one year time-frame.
Technical picks to beat near-term volatility:
HCC: Buy for a target of Rs 18-19, with a stop loss of Rs 15-16
The stock closed at Rs 16.25 on 15th March 2013. The stock made a 52-week low at Rs 14.65 on 04th March 2013 and 52-week high of Rs 29.80 on 14th March 2012.
The 200-day Exponential Moving Average (EMA) of the stock on the weekly chart is currently at Rs 32.97. On the technical charts, there is a basing at lower levels, which indicates reversal in the coming weeks.
Moreover, the stock has also formed a Japanese candlestick pattern called 'hammer' which signifies that there should be an aggressive buying with volumes. Both of these conditions indicate that it may reach our desired targets in the near term.
Investors can 'buy' the stock in the range of Rs 15-16 levels with closing below stop loss of Rs 14 levels for the target of Rs 18-19 levels
Lupin Ltd: Buy with a target of Rs 650-600 with a stop loss of Rs 575
The stock closed at Rs 609.80 on the 15th March 2013. The stock made a 52-week low at Rs 490.35 on 16th March 2012 and 52-week high of Rs 631.95 on 10th September 2012.
The 200-day Exponential Moving Average (EMA) of the stock on the weekly chart is currently at Rs 434.38. Being the defensive scrip, it is still in its upward trend negating the volatile sessions of the broader index.
Last week, it remained positive despite weakness in all other counters, which signifies its potential to continue its upward momentum in near term.
One can 'buy' in the range of 595-600 levels with closing below the stop loss of 575 levels for the target of 650-660 levels.
Mahindra & Mahindra Ltd: Buy with a target of Rs 960-970, with a stop loss of Rs870
The stock closed at Rs 927.70 on the 15th March 2013. It made a 52-week low at Rs 621.10 on 18th May 2012 and 52-week high of Rs 976 on 19th December 2012. The 200-day Exponential Moving Average (EMA) of the stock on the weekly chart is currently at Rs 670.63.
As we can see on the chart, it is in uptrend, but after retracing from Rs 950 levels it made fresh buying pivot at Rs 850 levels and traded in a positive manner in the last few weeks, which determines its strength.
One can buy in the range of Rs 900-910 levels with closing below a stop loss of Rs 870 levels for a target of Rs 960-970 levels.
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