Top buy & sell ideas

 I recommend selling GSFC with a stop loss of Rs 135 and target of Rs 118, a sell on MRPL with a stop loss of Rs 120.50 and target of Rs 110 and a sell on Tata Chemicals with a stop loss of Rs 706.50 and target of Rs 665.

The Nifty futures on the Singaporean stock exchange were trading lower by around 131 points at 10,587, a fall of around 1.24 percent. This indicates that the domestic market is likely to open on a negative note.

  

Sell GSFC with a stop loss of Rs 135 and target of Rs 118

Sell MRPL with a stop loss of Rs 120.50 and target of Rs 110

Sell Tata Chemicals with a stop loss of Rs 706.50 and target of Rs 665

Sell Bajaj Finance with a stop loss of Rs 1661 and target of Rs 1570

Sell HDIL with a stop loss of Rs 53 and target of Rs 48

Sell Vedanta with a stop loss of Rs 321 and target of Rs 298

Sell Oriental Bank of Commerce with a stop loss of Rs 113 and target of Rs 101

Sell Allahabad Bank with target at Rs 57 and stop loss at Rs 65

Sell HCC with target at Rs 33 and stop loss at Rs 39

Sell IRB Infra with target at Rs 205 and stop loss at Rs 235

Buy National Aluminium Company with target at Rs 90 and stop loss at Rs 85

SAIL can slide to around Rs 75, keep stop loss at Rs 82

Tech Mahindra can climb to around Rs 640, keep stop loss at Rs 615

MORE WILL UPDATE SOON!!

SHORT TERM TRADE IDEAS

Buy Infosys, DLF, hold Dabur; sell Engineers India: Sudarshan .

Sometimes we can have an intraday up move and a larger downtrend which is what is happening. So today for the short, for the day trader, I have two buy ideas. One is Infosys. In the morning also I had suggested that largecap IT stocks will outperform and we should be buying them. That theme continues in the midday. So Infosys is a buying opportunity. This is just intraday."

DLF which is bouncing back from the lows is also a buy. Again intraday only.

One short sell idea is Engineers India (EIL). It has been cracking, but please keep your trades only till the end of the day. Except for the index do not carry anything else forward.

Dabur India in the next three to six months should see an increase in prices. So my suggestion would be hold on to this, keep it as a long term investment. Even after six months you should be a winner here."

My view on LIC Housing Finance is fairly bearish. So for the next three to six months, I do not see any significant price gains. Prices will remain subdued.

Sell Britannia Industries, Bharti Infratel, Hindustan Unilever: Prakash Gaba

Britannia Industries is still weak. It is still typically sideways zone, there is selling pressure. Possible target on the downside could be Rs 4,450 in the short term. It is purely a trading play out here, it looks certainly weak to me and is trading on the lower side of the trade.

Bharti Infratel looks weak to me. There is a very good chance that the stock can see a slide to maybe around Rs 320 zones. Keep loss stop above Rs 344, just Rs 2, but that is what is needed."

Hindustan Unilever (HUL) is another stock that looks weak to me. There is very good chance that we can see a slide to levels closer to Rs 1,325. It is cracking, stop loss above Rs 1,360 on HUL should be fine.

Buy Put options in ACC, L&T Finance Holdings, ICICI Bank: VK Sharma

ACC, L&T Finance Holdings and ICICI Bank where investors need to protect. In ACC, I am suggesting to buy the 1,660 Put at around Rs 24, keep a stop loss at Rs 16 and target of Rs 40. Otherwise, we see the stock falling to around Rs 1,580, its 200-day support. So you can continue to hold on to these Puts that you buy.

L&T Finance closed below its 200-day moving average first time after April 2016. So this could also fall to around Rs 138. So, I am suggesting to buy the 155 Put at around Rs 4.5 or whatever the price is at the open, with stop loss at Rs 3 and target of around Rs 10.

ICICI Bank, is a stock which I hold, but definitely a stock where I would like to recommend buying Put at 330, buy around Rs 8, stop loss at Rs 5, target of Rs 15. This stock could take support only around 200-day moving average which is around Rs 297.

The stock that I want to buy is ICICI Prudential Life Insurance where the 200-day moving average, 20-day moving average, and the other moving averages also hover between Rs 415 and Rs 417. Yesterday, the 420 Call quoted at around Rs 15. So I am buying this, should it fall to Rs 13, with a stop loss at Rs 8 and target of around Rs 22. I don’t think this will break the 200-day moving average, this is one stronger stock among the other largecap stocks.

Sell Tata Chemicals, Can Fin Homes, BPCL; buy Tata Consultancy Services: Sudarshan Sukhani.

 However, the theme is that we should be looking to sell into most intraday rallies or even in the morning if there is even a brief rally. The short sells are much easier, a lot of midcaps have already cracked even before Friday.

Tata Chemicals is a short sell, there is a large head and shoulder pattern which is been confirmed on Friday, it is an intermediate downtrend which is starting, and that is happening everywhere.

Can Fin Homes was already in a bear market of its own. That should exaggerate and continue on the downside. That is a short sell.

BPCL is a short, this stock has been hammered earlier also and that decline continues. LIC Housing Finance is making new lows. So there is a theme which is that midcaps are now available even now for shorting.

The one buy is Tata Consultancy Services (TCS). Assuming that markets will open lower, the lower level is an attractive buying opportunity in the largecap IT and that is TCS for me today.

MORE WILL UPDATE SOON!!

10,000-10,300 could be bottom for Nifty, earnings have to deliver to match high valuations: JP Morgan

He feels domestic liquidity may be partially disturbed in near term due to change in taxation and rising bond yields; but he expects SIP and provident fund flow to continue going ahead.

  

Bears remained in charge at Dalal Street on Monday as well. The Sensex fell more than 500 points in opening trade, taking total two-day losses to more than 1,300 points, but it showed some recovery from that opening lows.

Bharat Iyer of JP Morgan, personally, feels Nifty could be bottomed out at 10,000-10,300 levels and the next month could be challenging for India as well as globe.

It meant the market can fall further from here on, though the intermittent recovery could be possible as Iyer feels the current fall is definitely a buying opportunity for investors who missed the bus earlier.

Broader markets have been hitting hard but that does not mean the end of bull market, he said, adding we are getting into matured phase of bull market.

Valuations definitely picked up in last six months on easy monetary policy and pick up in economic growth, but earnings will have to do tough jobs to prove valuations, Iyer said.

On earnings, in an interview to CNBC-TV18, Bharat Iyer said earnings picture is still frothy. The research house expects 14-15 percent growth in second half of FY18 against earlier 25-30 percent growth, so the financial year 2017-18 growth could be around 8-10 percent.

Globally, he said, earnings and economic growth are picking up. The research house expects US Federal Reserve to do four rate hikes but market priced in only 2, he said.

As he said it is definitely a buying opportunity and we are in bull market correction, he advises taking exposure to financials with solid growth, cement, tractor, construction equipment etc.

He feels urban consumption theme has long way to perform and there is a little bit of cognisance of cost of capital which has been rising.

He is neutral on rural focussed themes like two-wheeler space. If they deliver 8-10 percent volume growth then that could be good, he said. "Don't chase these stocks at these levels."

On Budget 2018 front, he said most countries in the world do have long term capital gains tax of 15-20 percent and in comparison to that, India is still better at 10 percent.

He feels domestic liquidity may be partially disturbed in near term due to change in taxation and rising bond yields; but he expects SIP and provident fund flow to continue going ahead.

MORE WILL UPDATE SOON!!

Buy, Sell, Hold: 10 stocks are being tracked by analysts on February 5

Morgan Stanley has upgraded Ashok Leyland to Overweight from equal-weight and raised target price to Rs 151 from Rs 101.30 per share.

Ceat

Brokerage - Macquarie | Rating - Outperform | Target - Rs 2,200

Macquarie has maintained its Outperform rating on Ceat with a target price of Rs 2,200 per share as it expects volume growth to improve in Q4FY18 & FY19.

It believes company's EBITDA margin should improve going forward. The research house expects an EPS CAGR of 15 percent over FY17-20.

Brokerage - Deutsche Bank | Rating - Buy | Target - Rs 2,100

While having a Buy call on the stock with reduced target price at Rs 2,100 (from Rs 2,250 per share), Deutsche Bank said it cut FY18-20 EPS forecasts by 5-7 percent, though Q3 operating results were robust & in-line with expectations.

"We remain positive on Indian tyre companies as sector is seeing synchronised improvement. Constructive on company's medium-term growth on higher capacity, distribution," it said.

However, its preferred pick in sector is MRF.

Bayer CropScience

Brokerage - Investec | Rating - Hold | Target - Rs 3,900

Investec said Bayer CropScience's misplaced aggression leads to significant miss in Q3FY18.

The research house has Hold rating on the stock with reduced target price at Rs 3,900 from Rs 4,250 per share as valuations of 40.6x FY19 PE seems expensive.

Normal agri cycle, coupled with strong franchise should turn the tide, it believes.

IIFL Holdings

Brokerage - Credit Suisse | Rating - Outperform | Target - Rs 870

With maintaining Outperform rating on the stock with increased target price at Rs 870 (from Rs 640), Credit Suisse said IIFL Holdings' demerger could help reach better valuations.

Home loans, MSME & construction finance are key loan growth drivers, it feels.

Hindalco Industries

Brokerage - Macquarie | Rating - Outperform | Target - Rs 328

Macquarie said Hindalco Industries has reported Q3 standalone EBITDA 3 percent below its estimate due to cost inflation but company is better placed than peers during cost inflation.

Disciplined capital allocation & impressive cost management deserve premium valuation, it added.

Company remains its top pick in the metals coverage, Macquarie said while reiterating Outperform rating on the stock with target at Rs 328 per share.

Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 292

Morgan Stanley said strong aluminium price outlook & backward integration continued to support momentum.

Aluminium business EBITDA was a slight miss whereas copper business EBITDA was better-than-expected, it added.

Godrej Properties

Brokerage - Macquarie | Rating - Neutral | Target - Rs 858

Macquarie said key takeaway from Q3 results of Godrej Properties was strong momentum in business development.

The research house has retained its Neutral rating on the stock with increased price target at Rs 858 (from Rs 650) as there is no change to EPS.

Pick-up in sales and debt reduction are key risks to the stock, it said.

Preferred picks in the space are Prestige Estates & Phoenix Mills, it said.

Ashok Leyland

Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 151

Morgan Stanley has upgraded Ashok Leyland to Overweight from equal-weight and raised target price to Rs 151 from Rs 101.30 per share.

"Volume recovering and we are 13 percent above consensus for FY20e. M&HCV growth has picked up but discounts remain close to all-time highs," it said.

The research house further said the demand recovery and high capacity utilisation will lead to pricing recovery while lower electric vehicle risk for commercial vehicles will provide long-term support for the stock.

Brokerage - Credit Suisse | Rating - Underperform | Target - Rs 103

Credit Suisse said Q3 results were in-line with expectations and volume growth at 42 percent was strong.

While Q3 volumes supported by one-offs, January volume was also appear healthy, it added.

The research house is concerned on rising competitive intensity in space, given Tata’s aggression. It expects company's EBITDA margin to decline over 60/40 bps in FY18/19.

Credit Suisse has maintained Underperform rating on the stock with increased target price at Rs 103 from Rs 98 per share.

Bajaj Auto

Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 3,785

Morgan Stanley said Bajaj Auto's Q3 results were tad below estimates and leverage gain should drive Q4 margin. Topline growth was 2.5 percent below forecast, it added.

The research house expects domestic motorcycle run-rate to pick up, aided by demand recovery, new launches.

Thyrocare

Brokerage - Nomura | Rating - Buy | Target - Rs 851

Nomura said Thyrocare's Q3 revenue/EBITDA/net profit growth at 5.5/14/3 percent was ahead of estimates. Pick-up in diagnostic services at 18 percent YoY is encouraging, it added.

It thinks long-term growth expectation will be key determinant of stock performance and expects over 20 percent revenue growth going forward with higher volume demand.

The research house has maintained Buy rating on the stock with target at Rs 851 per share.

Union Bank of India

Brokerage - Macquarie | Rating - Underperform | Target - Rs 101

Macquarie said Union Bank of India has reported yet another quarter of high provisions. Guidance on credit cost & slippages remain high while margin has been lowered, it added.

It expects full-year losses for FY18 at Rs 3,200 crore versus earlier estimates of Rs 550 crore loss.

FY19-20 EPS estimates cut of 52/21 percent look high due to small base, it feels.

National Company Law Tribunal case resolution is key catalyst for the stock.

The research house has maintained Underperform rating on the stock with reduced target price at Rs 101 from Rs 112 per share.

Brokerage - Nomura | Rating - Buy | Target - Rs 165

Nomura has upgraded Union Bank of India to Buy from Neutral but cut target price to Rs 165 from Rs 190 per share.

"Valuations get undemanding and the worst on asset quality is behind us," it said. It expects return on equities to normalise to over 9-9.5 percent.

Brokerage - Credit Suisse | Rating - Neutral | Target - Rs 140

Credit Suisse has maintained its Neutral rating on the stock and slashed target price to Rs 140 from Rs 159 per share.

"While overall loan growth was weak, retail growth was strong at 18 percent YoY," it said. Return on equities will remain low even after corporate stress is provided for, it added.

Info Edge

Brokerage - Morgan Stanley | Rating - Overweight | Target - Rs 1,900

While having Overweight rating on the stock with target price at Rs 1,900 per share, Morgan Stanley said the company reported robust revenue in core business and Zomato remained one of company’s key strategic investments.

Overall, the research house tweaked estimates for FY18-20 and expects FY18 growth for 99Acres & Jeevansathi to be 20 percent YoY.

Brokerage - Credit Suisse | Rating - Neutral | Target - Rs 1,310

Credit Suisse has downgraded the stock to Neutral from Outperform but raised target price to Rs 1,310 from Rs 1,300 per share.

Margin was strong but marketing costs should pick-up again in Q4, it feels.

MORE WILL UPDATE SOON!!

Nifty still seen at 12,200-12,400 by Dec despite scary Friday post Budget 2018

Nifty should consolidate around 10,700-10,800 in the upcoming weeks but we retain our year-end target of 12,200-12,400 for the broad indices.

Investment Imperative Group

  

The Union Budget 2018 has evidently focused on increasing expenditure across the critical sectors than giving rebates, deductions on the direct taxation front. The government of the day is confident of spending taxes well for the upliftment of lower strata of the society than allowing for automatic course correction through market forces.

Rural contribution in terms of job creation, as well as participation in the mainstream, is inevitable for clocking 9-10 percent average growth over the next decade. Hence, there has been major impetus and allocation for rural infrastructure, healthcare facilities for lower middle and lower class, education sector which was long due for huge allocation.

Irrigation, affordable housing and civil construction companies focusing on rural infrastructure will see higher allocation for projects. Healthcare, education will see a systematic increase in spending over the next few quarters. Whereas, implementation of smart cities project, urban transport, electrification and waste management will be keys for justification of allocation towards the projects.

We expect flows towards equities to continue from investors in and outside of India given that post-tax returns on Indian equities continue to remain attractive when compared with debt, deposits, and alternative offerings.

Going forward, markets can see some retracement in the next few weeks on a marginal deviation of fiscal targets and long-term tax addition on equities. However, earnings and overall political landscape including elections, implementation of fund allocation will drive equities.

We are expecting corporates across manufacturing, real estate, automobiles, cement, steel, infrastructure to see a strong rebound in earnings in the December quarter.

Minimum support price (MSP) for farmers, farm loan allocation and focus on FPUs will help improve income, jobs at the farm level. The move will also allow farmers to consolidate, adopt new technologies and target higher productivity, exports which in turn should help retain inflation numbers and give a medium-term boost for a long-term solution.

Healthcare spending will push for facilities, hospitals in Tier II and Tier III cities resulting in an exhaustive coverage of medical facilities for the rural population.

On markets, Nifty should consolidate around 10,700-10,800 in the upcoming weeks but we retain our year-end target of 12,200-12,400 for the broad indices.

MORE WILL UPDATE SOON!!

Asia shares skid as inflation shadow spooks bonds

MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.8 percent in the largest daily drop since late 2016.

   

Asian shares fell the most in over a year on Monday as fears of resurgent inflation battered bonds, toppled Wall Street from record highs and sparked speculation that central banks globally might be forced to tighten policy more aggressively.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 1.8 percent in the largest daily drop since late 2016.

E-Mini futures for the S&P 500 fell another 0.44 percent, an unusually sharp move for Asian hours and suggesting further losses in U.S. markets later in the session.

Japan's Nikkei sank 2.4 percent, while Australia's main index lost 1.7 percent and Chinese blue chips slid 1.1 percent.

Investors were spooked by Friday's U.S. payrolls report which showed wages growing at their fastest pace in more than 8-1/2 years and fuelling inflation expectations.

Futures markets reacted by pricing in the risk of three, or even more, interest rate rises from the Federal Reserve this year.

"The earnings data fits too closely with the narrative of emerging wage pressures to be dismissed," said Deutsche Bank macro strategist Alan Ruskin.

"The data will add fuel to the debate on whether the Fed is falling behind the curve. It will raise the chances of the Fed median dots shifting up to four rate hikes for 2018," he added.

That would be negative for emerging markets and commodity currencies, said Ruskin. Both the Australian and New Zealand dollars fell sharply in the wake of the job numbers, along with a range of Asian currencies.

It was also a major blow to government bonds. Yields on 10-year U.S. Treasury paper were up at a four-year peak of 2.86 percent, having jumped almost 7 basis points on Friday.

The 2-year yield was near a nine-year top at 2.162 percent, tightening financial conditions and offering a more competitive return compared to equities. The dividend return of the Dow, for instance, was 2.13 percent.

PRICED FOR PERFECTION

Wall Street had already been flashing expensive by many historical measures and sold off in reaction. The Dow fell 2.54 percent, the S&P 500 2.12 percent and the Nasdaq 1.96 percent.

It was the Dow's biggest daily percentage loss in 20 months and the largest point fall since December 2008. The three major indexes capped their worst weekly losses in two years, after closing at record highs the previous week.

"It has to be remembered that U.S. shares were priced for perfection at around 19 times earnings," said Craig James, chief economist at fund manager CommSec, noting the historic average is around 15 times.

"Still, U.S. companies have produced stellar earnings over the reporting period. So it is understandable that some 'irrational exuberance' would emerge."

With half of the S&P 500 companies having reported, 78 percent have beaten expectations against an average 64 percent.

Chris Weston, chief market strategist at broker IG, noted the sudden spike in volatility caused some rules-based funds to automatically dump stock as their models required.

"There is talk that volatility targeting annuity funds could have to sell a further $30 billion of stock this week and another $40 billion should realised volatility not retreat lower," he warned.

The lift in U.S. yields provided some initial support to the dollar after a rocky start to the year, though it was starting to lose altitude again in Asian trade.

Against a basket of currencies, the dollar was down a fraction at 89.127 having climbed 0.6 percent on Friday for its biggest single day gain in three months.

The dollar backed off to 109.87 yen from an early 110.29, while the euro nudged up to $1.2460 from $1.2425.

Any rally in the U.S. dollar is considered a negative for commodities priced in the currency, with the Thomson Reuters CRB index down 0.5 percent. Gold was off a touch at $1,330.50 an ounce after losing 1 percent on Friday.

In oil markets, U.S. crude fell 74 cents to $64.71 a barrel, while Brent lost 80 cents to $67.78.

MORE WILL UPDATE SOON!!

Nifty Bank Outlook for the Week (Feb 05, 2018 – Feb 09, 2018)

NIFTY BANK:

Nifty Bank closed the week on negative note losing around 3.60%.

As we have mentioned, last week that resistance for the index lies in the zone of 27400 to 27500 where trend-line joining earlier highs is lying. If the index manages to close above these levels then the index can move to the levels of 27900 to 28000. During the week the index manages to hit a high of 27652 and close the week around the levels of 26451.

Support for the index lies in the zone of 26400 to 26500 where break out levels are lying. If the index manages to close below these levels then the index can drift to the levels of 25700 to 25800 where break out levels and short term moving averages are lying.

Minor resistance for the index lies in the zone of 26600 to 26700. Resistance for the index lies in the zone of 26900 to 27000 where break down levels are lying. If the index manages to close above these levels then the index can move to the levels of 27400 to 27500 where trend-line joining earlier highs is lying.

Range for the week is seen from 25700 to 25800 on downside & 27000 to 27100 on upside.

MORE WILL UPDATE SOON!!

Nifty Outlook for the Week (Feb 05, 2018 – Feb 09, 2018)

NIFTY:

Nifty closed the week on negative note losing around 2.80%.

As we have mentioned last week, that resistance for the index lies in the zone of 11100 to 11200 where channel resistance for the index is lying. If the index manages to close above these levels then the index can move to the levels of 11400 to 11500. During the week the index manages to hit a high of 11171 and close the week around the levels of 10760.

Support for the index lies in the zone of 10600 to 10700 from where the index broke out of trend-line joining highs formed in the month of September-2016 and August-2017 is lying. If the index manages to close below these levels then the index can drift to the levels of 10400 to 10500 where break out levels and short term moving averages are lying.

Minor resistance for the index lies in the zone of 10850 to 10950. Resistance for the index lies in the zone of 11100 to 11200 where channel resistance for the index is lying. If the index manages to close above these levels then the index can move to the levels of 11400 to 11500.

High level of volatility can be expected during the week as the RBI policy is to be announced next week.

Broad range for the week is seen from 10300 on downside & 11100 on upside.

MORE WILL UPDATE SOON!!