Nifty to end above 5250, take long positions: Sukhani

The trade is that at 5,250 a close above that tells us that this market momentum has turned to up. A close below 5,200 would have told us the opposite. Sudarshan Sukhani

s2analytics.com

Technical analyst Sudarshan Sukhani of s2analytics.com expects Nifty to close above 5,250 today, so he suggests taking some long positions from the start of trade today.

Nifty's close above this level would be indicative of a bullish pattern and an upside trend, he added.

Below is the edited transcript of Sukhani’s interview with CNBC-TV18.

Q: What's the outlook on the Nifty this morning?

A: The outlook was a little muddied last week when we said that you buy calls and buy puts, the market could go anywhere. The important point was that it will go somewhere. If somebody has followed that advice and taken only intraday trades in the direction then today we should be owning some calls and some puts, which are likely to lose value.

But the trade is that at 5,250 a close above that tells us that this market momentum has turned to up. A close below 5,200 would have told us the opposite. That below close hasn’t happened. Chances are that we might well close above 5,250 today. If that happens then we should be long. The trend is then on the upside. It will also confirm a mildly bullish pattern.

So, we have to take this a day at a time. Since we have to go with the trend, the trend is expected to change to up today on a close above 5,250. Some long positions should be taken from the start of the day.

Q: Does chart of Divis Labs also look good?

A: The charts look fantastic. Divi’s Lab has been making new highs and then consistently doing it, not just going up and then eventually retracing. So, here is a chart and here is a stock that says ‘I am willing to go up and the market is willing to support that rally.’

There is a lot more buying here. Today, there will be a gap open of some kind. But then on intraday dips, on intraday rests it is a buying opportunity. It is not likely to stop where it opens.

Q: Which stock would you buy from the banking space?

A: I have been favouring ICICI Bank and in all fairness it has rallied the best in the large cap banks. That remains a favourite. On Friday it closed lower. The chances are that that was some kind of a correction that’s coming to an end. Today it should close higher, open higher.

At the open after the first cooling off period of 15-20 minutes or later in the day, the stock becomes a buying opportunity. The chances are that it will cross Rs 1,000 and go up. If the Nifty moves up, ICICI will outperform.

Q: What about Bata ? Do you think the pull back post result is over?

A: Bata made those new highs which it has been doing on Friday. That was when the markets were a little confused. Those new highs also confirmed a bullish pattern, some kind of a continuation of the uptrend and that gives a target of Rs 1,050 now. That’s fairly ambitious, that’s 15% up. But Bata has been doing the right things. Bata is now still on a roll and there is much more upside.

Q: You have a buy on Jain Irrigation this morning?

A: If this market is going up and it could well be, so we are just following the momentum. If it doesn’t go up we’ll have to suffer that setback. But if it is going up then midcap stocks are going to go with it and certainly probably outperform.

Jain Irrigation has completed its bear market. It made a double bottom, rallied, then it went through a very sever and sharp correction after the rally. That’s good news because we can buy it lower.

So, around Rs 75 where it stands now, Jain Irrigation has completed a correction and it is probably going to resume its uptrend. This could be a significant up move. So it is not just a day trade. If the trade goes in our favour, we should carry it on.

Q: You have a sell on Reliance Power ?

A: It is a miserable chart. It shows nothing. It keeps on rallying, the rallies are small, they are very intermittent. Even in terms of time the rallies are not sustained and keep on falling.

The reason why I still have sell is that assuming that the market will open up, there will be some opportunities of selling in that strength and Reliance Power is almost the perfect opportunity.

So, once the stock stalls, it is possible to take a short position even as the broad market goes up.

Q: You also have a sell on BPCL ?

A: That’s a very disappointing chart. It had a straight line decline, didn’t stop at all. And now after that decline it is on the verge of a major breakdown on the downside.

Whether that happens or not, the trade again is that if there is a gap up, if there is some strength in the stock, that strength should be used to go short in it.

Q: What would you do with Shree Renuka now?

A: Shree Renuka is a buy. It has been referred to as a buying opportunity earlier also and that holds. So, there are modest smaller short-term targets of Rs 35-36 and an eventual target of Rs 40. That applies to most sugar stocks.

Q: What is the chart of Glenmark telling you?

A: Glenmark is telling us that the bear market in the stock is over. It is now moving up. It has been moving up consistently and it is almost doubled itself. At current levels there is again a buying opportunity. There was a big move on Friday, it is probably a continuation. So, we should expect higher levels to come. Buy on any intraday dip.

Q: What about Dishman Pharma ?

A: Surprisingly Dishman Pharma is also in the same league as Glenmark. Apparently the bear markets in a lot of these midcap pharma companies is done with, it has been making higher highs, higher lows, made a very big gain on Friday. Those gains are going to be built upon.

It does appear that the Nifty is going to close above 5250 for all we know. If that happens, a lot of stocks will move up.

Q: How is the chart of REC ? That looked weak on Friday?

A: Yes it did but I would assume that this is a minor correction in an ongoing uptrend. REC has a very decent chart as does PFC . So Friday’s correction should be bought into. Here is a stock that’s actually corrected. I wouldn’t worry about that dip.

Both these stocks are likely to move up. REC has a very immediate target of Rs 205-210. But eventually I think it will go back to its Rs 250 levels.

Q: Would you buy Marico on dips?

A: No I would not. Marico has seen a very decent rally. At some point Marico becomes a buying opportunity. Fortunately we can't short sell it. I say fortunately because that would be an unwise act. We wait patiently.

Marico for somebody who is a short-term trader is a sell. It should slide further till it finds support somewhere around Rs 180.

Q: How would you approach the opening at 5260? Would you open up a fresh long here?

A: Yes, I would open up a fresh long looking at a target of 5400 and a stop loss at 5200.

Q: What do you think of Mahindra Satyam ?

A: The charts are saying it is going up. So, that’s fine. But I wouldn’t trade in it. There are so many other midcaps available which are more attractive in the IT sector.

View the original article here

Larsen Toubro

K Venkataramanan, 65, has been a passionate engineer since he graduated from the Indian Institute of Technology (IIT), Delhi, 43 years ago and joined Larsen & Toubro (L&T). A triple blue at IIT-Delhi in tennis, table tennis and basketball, he says sports taught him how to bounce back. Today, with the domestic economy slowing and India’s largest engineering and construction conglomerate up against a range of challenges, Venkataramanan refuses to shed his positive outlook. In his first freewheeling interview after he took over from A M Naik, he talks to Katya B Naidu and Abhineet Kumar on how L&T is planning to drive growth despite slowing demand. Edited excerpts:

The economy is slowing and companies are postponing investments due to high interest costs. Do you think intervention by the RBI would have helped revive growth? 
Monetary review is just one part of the whole business environment and the Reserve Bank of India (RBI) has to also think of inflation pressure before a rate cut. What I am hoping for is total acceleration by the government on clearing some of the roadblocks, such as allowing land acquisition, since projects are getting stuck because of that, and coal linkages to power companies, without which you cannot grow at eight per cent.

I think the whole package is what will make it happen; just one rate cut by itself is not going to be enough. An even more important part is restoring foreign investors’ confidence that there won’t be any more discussion on retrospective changes in law. We also need more directional steps to encourage manufacturing. Today, you can’t move the vast mass of people from agriculture straight to IT. They have to move through manufacturing, otherwise we will have chaos in India.

Today the despair in the industry is palpable. Do you see a silver lining?
I can see the government at the top level is making the right statements and forming the right sort of sub-committees. Notwithstanding the fact that coalition governments take more time, I hope it will move in the right direction, as everybody today understands the seriousness of the problem.

The general feeling is that things have reached a level from where they can only go up. I sincerely believe that there has to be a clear direction on reducing or controlling the fiscal deficit and current account deficit and improving the climate. That will attract inflows from foreign institutional investors (FIIs) and those, in turn, balance out the weakness of our currency. Everybody knows this, so I think they will take steps to improve things. Given the democratic coalition, it is just that it takes more time.

Companies are scaling back their ambitions to synchronise with lower GDP growth expectations. Is this, in turn, going to affect your business as a leading capital goods supplier?
I don’t think five to six per cent growth will happen on a sustained basis; we’ll have to weather it for a couple of years. There is a war room kind of atmosphere in all companies to manage cash, inventory and headcount. It is tension time, but I pray that it is for the short term.

At L&T, we look for the long term to make the company less complex and more focused. We have structured the company under nine verticals, so each vertical is a focused company. When these verticals will become very large, they will have potential to unlock value by becoming independent companies. We are a Rs 65,000-crore turnover company now and expect to be over Rs 1 lakh crore by 2015-16. Then some of these nine verticals will be ripe for listing.

In that way, we are trying to be more manageable and provide an international perspective to each business. The new HR structure that we have is also linked to the performance of the vertical for employees right up to board level. It is a very challenging time for everybody, including L&T.

In 2009, L&T said railways, shipbuilding and defence would drive growth. After the Mazagon Docks joint venture and customs duty on imported equipment, are these coming true now? 
These are all positive steps. In India when you are a private company, you have to struggle much more. Perseverance conquers all hurdles. We at L&T believe in this and are used to this. When equipment is earmarked for something, it takes some time for the private sector to have it brought in. When it finally arrives and performs well, it becomes an accelerated opportunity.

So, those opportunities are taking off now?
Yes, but in a small way. They will take off in a bigger way in the next two years. It will take a certain amount of incubation.

In the results conference, you said power will take off in FY14. What is the update? 
The issue of coal supply has to be resolved. Already what has been ordered and 23,000 Mw of power capacity that has been built have been stranded for lack of coal. India needs 75,000 to 80,000 Mw of power to be installed once every five years. China installed 100,000 Mw a year. It will happen. We are well geared for it.

For the next two years, however, we really need to walk the tightrope in terms of managing cash and costs. The crisis is also an opportunity. For instance, we would have gone into the global markets at 40 miles an hour, now we will be going at 80 miles an hour. Because now we have the ability to do it, and we also need to do it. If there was a strong domestic market, we would have done it with less energy and passion.

So what will be L&T’s key drivers over the next decade?
These will be technology, great innovation and internationalisation. We are a barometer of the Indian economy. So India will finally have to grow; it is our destiny. The whole world wants us to grow. We have passed through some turbulent times; I am sure we will come out. L&T is truly the India story. You remember that movie starring Anil Kapoor? We truly believe we are “Mr India”.

NIFTY,USD/INR AND EUR/USD POINTS FOR 9TH JAN

NIFTY -

above 4780 its a breakout

4779

4763

4718

4698

4602

USD/INR-

53.13

52.75

52.66

52.53

52,41

52.35

52.18

below 52.18 its a breakdown

EUR/USD

1.2896

1.2718

1.2689

1.2681

1.2654

1.2643

1.2310