Wednesday, February 25, 2009

INDIAN MARKETS Feb 2009 : PVT BANKING SECTOR - BUYING OPPORTUNITIES

Banking Sector is under tremendous pressure. What is more disturbing is the fact that the Pvt Sector banks are in for a hard hit. They are the ones that we have so far been very bouyant about. And that is reflected in their P/E ratios. While the best P/E in Public Sector Bank is of State Bank of India(7.95), the top honours in Pvt Sector banks is with Kotak Mahindra bank with a P/E of 36.03 , followed by HDFC bank with P/E of 17.61. That simply hints that there is going to be some serious price correction in pvt sector banks.

Let us analyse some of the important pvt sector banks for fabulous buying opportunities they are going to present to us in near future. Our focus will be to assess the buying price of these banks for short and long term investments. In other words we shall formulate buying strategies for some terrific opportunities expected to be thrown at us by Pvt Banking Sector in days ahead.

ICICI Bank
ICICI bank has very little support around 300 and so short term investors can enter at around 300 for booking quick profit of Rs 50/60. Long term investors can invest 25% at this level.

If ICICI bank breaches 283, one can safely look for a buy at 216. At this level short term investors can look to pocket a profit of Rs 100. Long term investors can pump in another 50% money at this level.

HDFC Bank
Short term investors can look to enter HDFC bank at 800 but should be nimble footed and book quick profit of Rs 70/80. Long term investors can put 25% of their investment at level of 800.

If HDFC bank breaches 800 then buy it not before 595. Short term investors can then take profit up to Rs 200. Long term investors should put in another 50% of their money at this level.

Kotak Bank
Buy Kotak Bank not before 225. Then also it may touch 200 in intra-day move. At present just stay away from Kotak Bank.

Axis Bank
Buy Axis bank only at 230. At the present level it is rather dangerous to venture into it even for short term gains.

IndusInd Bank
IndusInd Bank can be considered for buying only at 20. It is going to make a violent dash for the level of 20 and hence cannot be bought at present even for short term profit.