Trading Ideas for 9th September 2009
Equity
===========
RELCAPITAL
Strategy & Target - RELCAPITAL is looking to seek government approval
for IPO of Reliance Life. This will lead to value unlocking in
company. Our target 935
DLF
Strategy & Target - DLF has strong support at 424 - 420 zone. Buying
can be done near its support levels with short term target of 440 -
450
F&O
===========
RELCAPITAL (913)
Strategy & Target - RELCAPITAL is looking to seek government approval
for IPO of Reliance Life. This will lead to value unlocking in
company. Our target 930 - 935
Wipro (553.30)
Strategy & Target - Buying in Wipro can be done with target of 558.
Technical Check & Outlook 9/9/09
=================================
The up move was continued yesterday , where Spot Nifty made multi
month high of 4842, finally ended loosing some of intraday gain.
Market opened flat, taking the flat global cues and tested the strong
resistance zone of 4850 during the day, and finally close at 4805.25
up by 22.35 points or 0.47%. BSE Sensex closed at 16123.67 gaining
107.35 points or 0.67%. BSE Midcap closed at 5942.77 down by 25 points
or 0.42% whereas BSE Small Cap Indices closed at 7178.98 losing 10.52
points or 0.15%. The volume was bit more than that of the previous
trading session and the breadth was flat.
Technically speaking in the Spot Nifty daily candle stick chart a
small day bullish candlestick has appeared which depicts further
bullishness. Presently Spot Nifty is moving above its extreme short,
medium and long term moving averages. If we look to the momentum
indicators MACD is in BUY mode 14 days RSI and Stochastic Oscillator
is trying to go up further. Here it is mention that still Positive
Directional Indicator (+DI) is hovering over the (-DI) Negative
Directional Indicator.
Yesterday's market closing suggests flat to positive opening today and
in that event Spot Nifty will face initial resistance around 4818
followed by strong resistance zone of 4840-4850 mark thereafter
resistance will be offered near 4884 - 4900 mark. On the contrary in
the downside 4778 will be the initial support followed by 4748
thereafter 4697-4680 will offer strong support.
In commodities front gold (1007$ /oz), silver (16.83$/oz) has made
multi month high. Crude has also moved up close to 70$/barrel.
Yesterday US Dollar has lost considerable strength against its major
cross currencies and Indian Rupee is hovering at 48.53 against USD.
Nifty may move up for another day or two before seeing some
correction.
Nifty Outlook
==============
Yesterday's market closing suggests flat to positive opening today and
we expect Nifty to be in the range, in that event Spot Nifty will face
initial resistance around 4818 followed by strong resistance zone of
4840-4850 mark. On the downside 4778 will be the initial support
followed by 4748 thereafter 4697-4680 will offer strong support.
Strategy & Target
Selling in Nifty can be done around 4840 levels with strick stop loss
4880 and target 4780
=====================
Balrampur Chini Mills Ltd - SKP Securities
Investment Rationale
Sugar demand exceeding supply: Due to a demand-supply mismatch, the
sugar prices have started to soar upwards. Against an estimated
consumption of 23 million tonnes in SS 2009, the sugar production is
only projected to be 14.5 million tonnes. Leader in the Eastern UP
market: BCML is the largest sugar manufacturing company in eastern UP,
which gives it an edge in procuring sugarcane in the region, where the
cane prices are lower than rest of the state. Also, the ground water
level in the Eastern UP region is accessible at lesser than 100 feet,
making the sugar cane produce lesser susceptible to droughts or low
rainfalls.
One of the largest and most efficient integrated sugar companies in
India: BCML is one of the largest sugar companies in India. Along with
sugar, the company also has power and distillery businesses, which
make its business model superior.
Outlook & Recommendation
With the festive season round the corner, the demand for sugar is
expected to go up. As the consumption is about to outweigh demand, the
domestic sugar prices have already touched a 30 year high, and is
projected to move up even further. BCML is well poised to
substantially gain from the price rise, on account of lower contracted
import cost, improved margins and better realizations. We recommend a
BUY on the stock with a 12 month target price of Rs. 157 at 16.2x
FY10E earnings, giving it an upside potential of 32%.
Cheers,
Gautam
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