HERO HONDA and AUTO - AUTO ANCILLARY stocks to face the heat!

AUTO & AUTO Ancillary stocks to face most selling pressure as many stock start to trade below medium term moving average.
HEROHONDA (Rs 1755) - Stock has closed @ lowest level from March2010 and after a long time the stock has closed below 200DMA this is the first stock in Nifty which started to rally as early as Nov/2008 now showing signs for weakness is visible.

NIFTY weekly Update & IT sector

Bearish Engulfing after 13^th week rally Rising WEDGE impact, Nifty below 5350 on closing basis support 4900

http://www.akprabhakar.com/index.php New facelift --PIVOT for Nifty- Bank nifty & Sensex updated daily for traders

Derivative settlement indicated market clearly overbought after RELIANCE group now TECH & BANK turns weak and CARE(FUL) Banking report (NPAs) @ 3.5% of gross advances by March 2011.

Nifty (5408) has closed negative -122points after making high 5549 in 30months and closed lowest in 4weeks and candle formed Bearish Engulfing which in simple, means previous Candle which was positive was fully covered by a negative candle with high and low higher than previous Candle and this would be effective if Nifty trades below 5380 on sustainable basis (we have been writing about Rising Wedge Formation and that formation has started to work). Nifty has closed below 20DMA 5462 which would be strong resistance on closing basis, Nifty has corrected after 13^th week rally from low of 4786 which means 4-5weeks of correction is possible. Nifty long term moving average supporting market 200DMA which 5171 and 100DMA is 5265 any move below 5350 major weakness will be high 

Support-5340-5245-5160

Resistance-5462-5520-5575

We had written Market has corrected every 2years minimum 25% as per data and with global market starting to correct and rich valuation is worrisome. Now FIIs have turned sellers but I never worry about FIIs inflow or outflows it has been misleading they buy @ peak and sell @ bottom, if someone wants to track then track only select funds which have performed good. Nifty P/E -22.76 and S&PCNX500 P/E-21.08 are @ very high valuation levels with growth visibly slowing down and August sales figure would come on Wednesday 1^st September which could show some direction for market. Start of the year we gave market view of 18700 as High and 13000-12000 as Low for year 2010 and in that report we did mention Indian market after good return (84% in 2009) next year has been flat to negative and in nifty terms 5200 is the start as on 1^st January 2010 and on 27^th August 2010 5400 hardly 4% making bank deposit attractive with rising interest rate and risk of market on rise.

Tech Cup of woes intensifies

1. U.S Visa rules and fears of more tightening to create more jobs in developed nations
2. MAT- Government hikes MAT(Minimum Alternate Tax) in DTC bill
3. High attrition rate hits IT companies' bottom lines and ground check many tell me after 3years employee are able to get good offer.

Tech stocks have been moving in a range now many stocks have formed Head & Shoulder formation including CNXIT and break below neckline is seen and most of the frontline stock closes below medium term moving average. INFOSYS closed below 100DMA Rs.2739- WIPRO Closed below 100DMA-405 & 200DMA-406 is weaker than TCS

http://economictimes.indiatimes.com/Jobs//articleshow/6437580.cms  High attrition rate hits IT companies' bottom lines

http://www.financialexpress.com/news/Weak-demand-to-take-toll-on-cement/674156/  Cement prices, which were hiked in Mumbai last week by Rs 5 per 50 kg bag, are expected to fall to the earlier levels due to lack of demand, cement dealers said. The fall in prices is also due to increased supply with many southern cement players diverting their product to the western region.

India’s Power Grid Corporation is among the three firms shortlisted by Nigeria to manage the African nation’s electricity grid to be constructed at a cost of $3.5 billion. Besides Power Grid Corporation of India, the other two short-listed companies are Canada’s Manitoba Hydro and Electricity Supply Board of Ireland, Bart Nnaji, head of the presidential task-force charged with reforming Nigeria’s power sector, said. http://www.financialexpress.com/news/Power-Grid-among-final-bidders-for-Nigeria-grid/673846/

Is Indian Stock market safe?

Get inside information from the president and you will probably lose half your money. If you get it from the chairman of the board, you will lose all of your money. Jim Rogers

There have been many news which have made headlines in recent weeks, Just 451 clients account for 50% of NSE daily turnover and in the derivatives segment only 106 clients accounting for 50% of the average daily turnover. This was stated by the Minister of State for Finance, Mr Namo Narain Meena, in a written reply to question posed by Mr Sukhdev Singh Dhindsa in the Rajya Sabha. Now NSE has come to answer and the link is also provided.
Indian market is very safe but risk is due to wrong decisions taken by investors or traders for which regulators or stock exchanges can’t be blamed. Today traders and investors have turned so greedy that leveraged positions have increased and penny stocks and lesser-known-fundamental stocks have given multifold returns.

http://www.thehindubusinessline.com/2010/08/16/stories/2010081650980400.htm As many as 451 client identities accounted for about 50 per cent of the average daily turnover in the cash equity segment of the National Stock Exchange in the first quarter this fiscal.

http://www.business-standard.com/india/news/nse-questions-low-investor-base-claim/406129/ The National Stock Exchange (NSE) seems to be miffed by recent reports suggesting that India has a low equity base and only a few traders account for the bulk of the volume 

http://economictimes.indiatimes.com/markets/analysis/Brokers-abuse-margin-fund-rules-risk-crash/articleshow/6429767.cms  The most popular among retail broking houses is the so-called ‘five-day product’ that lets an investor buy stocks worth 100 with just 20, which in a strict sense regulations prohibit. The difference is paid for by the broker at the time of delivery. The regulations permit such a transaction, provided it is a one-off affair. But the cycle goes on week after week, reviving memories of the weekly settlement system which used to stall often and which had to be banned for its serious flaws, why are we witnessing a parallel settlement system here? Its just because brokers' clients are so greedy that they do avail of such systems. Whenever you buy there is always "Caveat Emptor", i.e. BUYERS BEWARE!

SEBI has mandated that all media houses disclose their investments in companies that are the subject of stories, editorials and other forms of reportage, including television http://www.thehindubusinessline.com/2010/08/28/stories/2010082853300100.htm  “Some media houses have so many investee companies that every second story from them would have to carry disclaimers,” remarked Mr Jagannadham Thunuguntla, Head of Equity, SMC Capital.

The greater fool theory is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a bigger fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to someone else for an even higher price.

http://prabhakar-views.blogspot.com/2010/02/be-informed-investor-in-informed-world.html  Be an informed investor in an informed world

http://prabhakar-views.blogspot.com/2010/02/caution-to-investors-from-sebi.html The following caution is issued by SEBI in the interest of investors. Be extra cautious while using information available from media sources such as Websites/ Blogs/ Newspaper Advertisements/ SMS’s Emails/rumours/ advice through television or print media for information and tips for intra-day, short term or long term investing.  

RELIANCE updated view

RELIANCE weak Crude & aggressive expansion plans short term drag on the stock

http://www.akprabhakar.com/index.php  New facelift --PIVOT for Nifty- Bank nifty & Sensex updated daily for traders

Reliance Industries Said to Conclude $1 Billion Term Loans with 31 Banks- We have carried a Negative view on RELIANCE and with global refinery having over capacity and crude trading around $72 and chances of Crude correcting till $60 due to lower demand is high probability. But long term outlook can be very good short term pressures also count. RELIANCE is aggressive in expansion and this could have cost pressure in next one year but would be beneficial after 2years in my view as this company has always had focused business plans and geographical expansion would benefit them in long term. But RELIANCE many hold in derivative as data till expiry pointed out higher ever open interest and leveraged traders and short term investor should be careful. Today being first day of new settlement there can be relief rally in this stock where leverage trader should reduce position this stock is Buy only in Cash for 3-5years investment in my view.

Wednesday, June 2, 2010

http://akprabhakar.blogspot.com/2010/06/ambani-brothers-took-step-towards.html  RELIANCE Freak trade my concern Ambani brothers took a step towards reconciliation in their long-running feud on Sunday 23rd May 2010

Friday, June 18, 2010

http://akprabhakar.blogspot.com/2010/06/reliance-agm-more-clarity-sought.html  RELIANCE AGM more clarity sought-Too Much expectation built

Monday, August 9, 2010 http://akprabhakar.blogspot.com/2010/08/weekly-reliance-nifty-view.html  RELIANCE group stocks underperforming after comprise

http://www.moneycontrol.com/news/economy/proposed-mat-rate20dampener-tax-experts_481211.html  Proposed MAT rate of 20% a dampener: Tax experts

CIPLA - Break-out below Rs.300 support

CIPLA Cmp Rs.308 saw long unwinding with -12% Open interest shed and price correction of -2% on +96% higher volumes as dividend announcement disappointed the street there were talks of very high special dividend. Stock is near a major support level breaking Rs.300 would Rs.280

VEDANTA-STER-SESAGOA in news

Mukesh Vs Anil battle continues, this time with Anil Agarwal
Vedanta's mining plans in Orissa and CAIRN bid has to be hiked as per SEBI directive and ONGC holds first right to refusal making CAIRN-VEDANTA deal difficult to go through. Export ban of Iron Ore from Karnataka has impact on SESAGOA and customs and excise department Saturday charged Vedanta group's Tuticorin-based STERLITE Industries (India) Ltd for evading duty by mis-declaration of export consignment.

STERILITE Cmp Rs.152 is a Break-down below Rs.150 which is 13months low and in Monthly charts stock has shown ROUNDING TOP formation and in Derivative  stock has seen fresh short built up in this settlement with +48% added; Rs.150 has been 13months low and multiple bottom if this important support Breaks after that 10-15% correction possible in the stock with so many negative news flow for the company.

Mukesh Vs Anil battle Continues --- after Anil Ambani now Anil Agarwal http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/Anil-Agarwal-set-to-pip-Mukesh-Ambani-as-richest-Indian/articleshow/6391143.cms  Anil Agarwal set to pip Mukesh Ambani as richest Indian

Vedanta says Orissa government actively considering allocation of alternative bauxite source

http://in.news.yahoo.com/43/20100821/836/tbs-sterlite-industries-charged-for-evad.html  The customs and excise department Saturday charged Vedanta group's Tuticorin-based Sterlite Industries (India) Ltd for evading duty by mis-declaration of export consignment. The company officials, however, charged the customs officials as being vindictive.

Last month, company Vice President S. Varadharajan was arrested by the officials on the charge of evading duty to the tune of Rs.750 crore on import of raw materials. According to company officials, the seizure of consignment Saturday is an vindictive action after Varadharajan got bail from Supreme Court

http://economictimes.indiatimes.com/news/news-by-company/corporate-trends/Anil-Agarwal-set-to-pip-Mukesh-Ambani-as-richest-Indian/articleshow/6391143.cms  Anil Agarwal set to pip Mukesh Ambani as richest Indian

http://economictimes.indiatimes.com/opinion/comments--analysis/Will-Anil-Agarwal-beat-Mukesh-/articleshow/6429728.cms  Will Anil Agarwal beat Mukesh?  Times News Network calculates that after you acquire Cairn India and launch your proposed IPO for Sterlite Energy, your holdings will be worth close to Rs 1,67,000 crore. This will beat Mukesh’s Rs 1,45,275 crore.

BSEMETAL index is near a Break-down level Below 15000 level 8-10% correction possible

Steel glut to hit demand for raw materials: BHP http://economictimes.indiatimes.com/news/international-business/Steel-glut-to-hit-demand-for-raw-materials-BHP/articleshow/6431454.cms  BHP Billiton, the world's biggest miner, on Wednesday signalled a looming slowdown in global steel-making raw materials markets due to overproduction of steel.

CRAMS stocks doing well

JUBILANT Organosys won a long-term CRAMS contract worth $51 million from from a leading US life sciences company. http://www.capitalmarket.com/if.asp?L=hotpursuit&M=cmedit/story2-0.asp?sno=419544
Jubilant the latest CRAMS deal with a US firm is a take or pay contract with agreed quantities. Further, the company is in discussions to increase the contract size to more than 2.5 times, it said. R. Sankaraiah, Jubilant's executive director, finance, was quoted by the media as saying that with the new deal, the company's CRAMS order book has crossed $1 billion. Jubilant continues to see strong traction in CRAMS business and expects to sign few more contracts during the year which will further drive the momentum in revenue and profitability, Jubilant said in a statement.

Even GLENMARK which is another CRAMS stock looks very good. We hold both JUBILANT and GLENMARK in FAB-15 where targets of Rs 450 and Rs 350 respectively may happen very soon.

CRAMS : India, A Low-Cost Hub http://iupindia.in/810/AN_CRAMS_India_50.html
http://hindi.economictimes.indiatimes.com/articleshow/6319013.cms ए के प्रभाकर, स्वतंत्र तकनीकी विश्लेषक

Below 5450 Caution on derivative week, data highest after January 2008 Crash

Nifty (5530) has closed positive +78points Nifty on 13^th week from low of 4786 has seen a high of 5546 Nifty long term moving average supporting market 200DMA which 5154 and 100DMA is 5258 any close below 5400 major weakness is seen.

FIIs data if carefully read they are buyers in Cash as well as Option where Puts are 32% of the total open interest @ Rs.63,456crs and they have also hedged in Nifty & stock futures so they would make money if market corrects. Indian exports in July grew 13.2% to $16.24 billion; the slowest since November 2009 as demand for the nation’s textiles, tea and rice weakened in the U.S. and Europe, Imports in July were $29.17 billion, up 34.3%, while trade deficit was $12.93 billion. Indian trade deficit is on the rise as global slowdown and excess global capacity makes Indian goods uncompetitive.

Derivative Data: With 4trading days to go for the settlement Nifty PCR-1.65 Market overall Open interest is Rs.1,94,324crs which is matching with January2008 crash levels. Nifty alone has around 64% position Rs.1, 24,136crs of which Nifty Futures Open position is 22,229crs Nifty Option alone Rs.101907crs and Put alone is Rs.63456crs outstanding position which is more that 32% of the total derivative market which is in dangerous proposition. Whenever Option writers go wrong market crashes and it rarely happens once in 2year.

PSU Power stocks is where I see more safety POWERGRID, NTPC, NEYVELILIG, PTC, NHPC and these stocks have underperformed markets and downside risk is minimal compared with stocks which has outperformed as these stocks are under owned. Season of Underperformer turning Outperformer as Banking stocks showing signs of profit booking after excellent rally. TATA group stocks TATAELXSI, NELCO and TINPLATE looks good for long term investors to slowly accumulate.

http://prabhakar-views.blogspot.com/2010/08/benefits-of-reading-research-report.html we live in a world of free flow of information and with so many channel’s, newspaper, brokers reports and analyst report is available.

http://akprabhakar.com/HindenburgOmen.php What is Hindenburg Omen?  The Hindenburg Omen is a technical analysis pattern that is said to portend a stock market crash. It is named after the Hindenburg disaster of May 6, 1937, during which the German zeppelin Hindenburg was destroyed.

http://akprabhakar.blogspot.com MRPL shows Inverse H&S formation in Weekly graph

TATACOFEE all time high http://akprabhakar.com/tata.php

Fabulous-15 Update

GSPL is nearing the target Rs 125 and we should take profits in that stock at CMP Rs 118. Now we introduce two more stocks into the portfolio to make it 30% investment. IDBI (Rs 131) and TATA ELXI (Rs 252) are looking good as investment and we would add them for 2% each with targets of Rs 170 and Rs 320 in mind. Now there are 14 stocks in the portfolio with 30% invested.

FABULOUS-15 TRACKER (Prices in Rs)
Stock Name	Reco Price	CMP	Target	% Weight	% Returns	Action
3IINFOTECH	87	63	118	2	-28	Hold
ADHUNIK MET	110	119	152	2	8	Hold
EKC	156	119	189	2	-24	Hold
EMCO	91	67	130	2	-26	Hold
GLENMARK	278	277	350	2	0	Hold
GUJ NRE COKE	72	61	110	2	-15	Hold
MRPL	78	81	100	2	3	Hold
NEYVELILIG	152	170	196	2	12	Hold
POWERGRID	109	104	141	2	-5	Hold
SUZLON	75	50	140	4	-33	Hold
JUBILANT	325	331	450	2	2	Hold
FSL	30	27	38	2	-12	Hold
IDBI	131	131	170	2	0	Hold
TATAELXI	252	252	320	2	0	Hold
GSPL	98	118	125	2	20	Hold
IFCI	54	62	75	2	15	BP
GIC HOUSING	88	122	150	2	39	BP
GREAVES COT	286	338	352	2	18	BP
SKUMAR	41	49	70	2	20	BP
ABG SHIP	210	270	270	2	29	BP
Total				30	-0.19
Add:
Interest @ 6% for 8 months					4.00
Total % Returns					3.81
Annualized Returns %					6.53

About New Entrants:

IDBI http://www.idbi.com/
IDBI Bank offers personalized banking and financial solutions to its clients in the retail and corporate banking arena through its large network of Branches and ATMs, spread across length and breadth of India.  They have also set up an overseas branch at Dubai and have plans to open representative offices in various other parts of the Globe, for encashing emerging global opportunities. As on March 31, 2010, the Bank had a network of 720 Branches and 1210 ATMs and plans to roll out another 300 branches during FY 2010-11.  The Bank's total business, during Fy 2009-10, reached Rs. 3.06 Lakh Crore (up by 41.7 %), Balance sheet reached Rs. 2.34 Lakh Crore (up by 35.5 %) while it earned a net profit of Rs. 1031 Crore (up by 20 %). IDBI Bank holds a significant stake include NSE, LIC, IDFC, IFCI, NSDL, CARE, ARCIL and SIDBI to name a few.

TATA ELXI http://www.tataelxsi.com/
Tata Elxsi Limited is a technology company of the Tata Group in India. The company has a team of nearly 3500 engineers and designers and is headquartered in Bangalore. The company’s core practice areas cover embedded product design services, industrial design & engineering, animation & VFX services, and systems integration services.

• This is just a model portfolio.
• Be just 28% invested and don't do averaging for the sake of that.
• Do not average if 30% dip is not seen after your purchase, averaging should be considered time-wise also.
• At least 2-3 months must pass before you buy again in a dip.
• As we hold a view that Sensex below 13000 in 2010 can be possible so avoid aggressively and leveraged positions.
• This market is a bear market which can cut both ways, it is always difficult to mint money in such market and it is better to be an investor and accumulate.
• Being correct in market is difficult so we have invested 28% so that in case of market rally we don't miss the opportunities.