Monday, March 9, 2009

Indian Markets Mar 2009 : Realty Sector - Buying Opportunity

Realty Sector is in no shape to even dream of a decent recovery, what to talk about turn-around. Here is a sector where one cannot even begin to give reason for such a drastic fall. Say what you may, but the fact remains that in this sector it is just not bleeding of excesses but something more sinister that is happening. This sector seems to be paying for some misdeeds and scandalous dealings of the past. And the light at the end of the tunnel is still not visible.

Simply put there is lot of pain left in this sector. Don't be surprised if you find one fine morning that some realty company has folded up and closed shop. With credit crunch tightly in place and demand just not ready to lift its head, realty companies are not likely to hold on to many assets that they call their own today. And if the grapevine is to be believed then God save those realty companies who have yet to repay massive illegal funds raised from underworld goons.

If you are looking for investing in realty companies then do so with utmost care. We wouldn't relish another Satyam blowing up at our face. The charts of realty sector companies show extreme weakness and that is still an understatement.We shall have a closer look at two real estate companies and unearth buying opportunities for investors with a penchant for high risk ventures.

DLF is trading in the narrowest Bollinger band imaginable and is simply hanging on to a slender thread. If it closes below 134 then we will find this scrip hurtling towards disaster. In that case look for a buy at the level of 66/71.

Unitech in the recent past may have been one of the most professionally run real estate companies in India, but the present charts tell a different story. It seems as if the company can be listed as a fly-by-night-operator. It has made such a joke of valuations and fundamental analysis. Every logic has been thrown out of the window when we see the price the company is trading at presently. All this without an apparent scam or swindle !!! If conditions have to improve they have to improve from the present level of 24, otherwise buying opportunity will be available only at 10 for retail investors.

Indian Markets Mar 2009 : Cement Sector - Buying Opportunity

Cement Sector has received sops from the govt and is believed to be raring to go. Earlier in a post titled " Disaster Looming Large" I had outlined the fact that cement as a sector is reasonably comfortable vis-a-vis other sectors. From that point in time the sector did perform somewhat better than others in these difficult times. But what is to be understood firstly is the fact that price action takes place before any news reaches us, and secondly we are in a firm Bear hug. In short, cement sector scrips has already discounted the potential of current positive news flow in its price. So now the investment in this sector has to be made as per correct appreciation of future most probable trend.

Let us now analyse buying opportunities for two most important scrips in Cement Sector. We need to be conservative in our approach while seeking buying opportunities in an essentially Bear market and that's exactly how we are going to proceed.

ACC is undeniably in a precarious position as far as Bollinger Bands are concerned. It is within a very narrow band with upper and lower limits as 575 and 530 respectively. From the close of 530.2 on 06 Mar 2009 it appears to be dangerously poised to crash downwards since any break from the constricted Bollinger band signals sharp and swift movement.So any buying before 390 will be utterly adventurous and fraught with risk. MACD and CCI are also signalling fall from the current level. I think we should respect these signals instead of burning our fingers.

Ambuja Cement
Ambuja Cement is one step ahead of ACC. On 27 Feb 2009 it had already violated the constricted lower band of Bollinger, thereby indicating weakness. Though it has risen somewhat from that level but it still is weak to the core. Trade below 60 will plummet the scrip minimum to level of 50. As per Elliot Wave calculation there is buying opportunity at 54. So prudent thing will be to buy in the range of 50/54. This too will be short term buying and investors should look to realise profit of Rs 9/10 from level of 50/54.

Thursday, March 5, 2009


Reality shows like Sa Re Ga Ma, Indian Idol are building up tremendous fan following and garnering hefty TRPs for the channels airing them. The shows are targeted to showcase the hidden talent in the nooks and corner of this vast nation -a nation that is bountifully endowed with gifted people. And these reality shows are simply a platform to pay tribute to the gifted people of this blessed land. How else can we ever come face to face with hidden and obscure talent!

Right platform or not, one thing is certain that so far there is no other equally effective alternative scheme that has been presented before us to hunt and showcase genuine talent. We may not agree with lot that is happening in the name of showcasing talent in these programmes. Plenty of gimmicks are resorted to by the producers of these reality shows which may offend the finer feelings of mind and soul. Not withstanding all that, one is compelled to acknowledge the fact that there is overall good being done to the society, maybe inadvertently. Lets take a deeper look at the pluses and minuses of the reality shows as platform to showcase one's talent:-

  1. The entertainment industry in India has found its moorings in this century. In other words it has come of age. Television is an essential component of entertainment industry. Television is also maturing in India . If we take a retrospective view, in the last century Television was languishing in India airing programmes connected to Indian Cinema only. But with the advent of Reality shows television viewing has taken a totally different dimension. Percentage increase of viewership has taken an exponential jump. With that increase in demand has come the logical increase in supply, making a virtuous cycle. The net result is the magnetic draw of big time money in television. One must admit that there are other genre of shows also which have contributed generously to the present happy situation, but place of Reality shows in this plot is undeniably there for all to acknowledge.

  2. With big time money comes professionalism and that brings more competent people to join force. The resultant is bigger, better and slick shows for audience to savour.

  3. Entertainment industry in general and Indian Cinema in particular benefits greatly from such Reality shows. Talent hunt in such a geographically vast nation is a tedious and daunting task to say the least. So before Reality shows came into existence music directors took the shortest route and worked with the same set of singers you could count on your little finger. And young singing talent in India went unsung (pun unintended). Not many talented youngsters will have such high motivational level as to leave everything and come to Mumbai to exhibit their talent, knowing fully well that they may not be able to fix up an audience with music directors for years. Reality shows have given such talented youngsters a popular platform to showcase their talent and draw attention of music directors of all hues.

  4. In effect such Reality shows are not only accomplishing the tedious task of ferreting out fresh talent, but also helping towards ushering in professionalism thereby enhancing quality in music industry. With high TRP comes better sponsorship. With better sponsorship comes bigger money which encourages talented youngsters to take music not as a pastime but as a vocation. That brings better quality, competitiveness and professionalism. This is just the beginning. There is enough talent in India to take the world by storm. Don't believe it? Just reflect on what A R Rahman and Sukhwinder Singh duo has done at the just concluded 81st Academy Awards.

  5. Popularity of such Reality shows is likely to make producers to experiment with modifications to this successful model. In future we may see Western Music talent being showcased successfully. Then will happen coup d'etat as Indians storm into the professional Pop and Rock bastion of the West. That will be the last frontier.

At times Reality shows may be accused of being biased in declaring the winners of these events. Or the producers may ignore blatant use of unfair means by participants to come up trumps. So in the end the viewers may be left wondering whether the winner was really the best of the lot. At times one may get emotionally upset to find glaring anomaly in declaration of winner in such shows. Before you lose heart and dump these entertaining programmes for good, take a dispassionate look at the following facts:-

  1. Just because the end result was rigged or unfair doesn't take an inch away from the wonderful young talent that has been showcased by these programmes.

  2. Who more than us Indians know for a fact that every aspect of our existence is coloured by unfair practices! There is unfair means being employed at every step that we take. Does that mean that we forsake everything that is unjust and unfair. Don't we still chug along? Then can we not take such practices in these shows in our stride. After all we should realise that ultimate winner of these shows is the Music industry, the entertainment industry along with the young talent and audience . So what if the producers, sponsors and maybe some cheats also win in the bargain.

  3. As conscientious audience we can voice our displeasure in abandon in various fora, in case we find something unpalatable in selection of winner. That will work wonders with the producers as they depend on us for TRP , which in turn drives sponsorship. Such Reality shows are in nascent stage of evolution in India and with audience opinion there is no doubt that many checks and balances will be put in place as we go along. That will ensure more transparency and better selection procedure for winners.

The need of the hour in India is to install foundations for professionalism in all activities that we undertake. Professionalism comes through finances which sponsors bring to the table. Talent is in abundance in India, be it music, sports, research, any performing or fine arts. Magic lies in hunting them and showcasing them in proper professional platforms. Reality shows like Sa Re Ga Ma, Indian Idol are doing just that. Keep the ball rolling! Watch out for the Indian Entertainment Industry in the next decade!!

Monday, March 2, 2009


Auto Sector can claim to be at crossroads of breakout or breakdown. It has received all the impetus that it needed from Government and still it has yet to make a decisive move northwards. There is air of despondency in the market which may be holding it back. We can evaluate the fair chances of making profitable trade by adopting some conservative buying strategies. However for any buying at the present level, we have to keep strict vigil towards risk management in case things take a turn for the worst.

Tata Motors
A decisive close above 150 can easily take Tatamotors to 200, where some profit booking is expected. Once across 200 it is ready to sail to 310/315. However in case it breaks down below 130 then there is hell to pay. So the prudent thing will be to invest 50% at the present level and watch for events as they unfold. But below 130 one should be ready to exit from Tatamotors and look for a buy at 84.

Maruti has already shown strength from its low of 433. Now Maruti should be considered for buying once it corrects itself. 615 should be a decent level to pick up Maruti. However one should be ready to invest more in case Maruti slips down to 515. So investors should put in 50% at 615 and be on look out for the level of 515 to pump in another 50% money.

M&M has to decisively conquer 330 to qualify for a breakout. In case it does so then it will face resistance only at 400. So investors can risk buying into it at present level but should exit from it once it breaches 260. Below 260 M&M will make a dash for 165 and hence investors should judiciously invest at present level of 311. Not more than 50% money should be invested now.

Hero Honda
In this gloom and doom, Hero Honda seems like a fairy tale. For the simple reason that the scrip is performing much above market, I have an apprehension for Hero Honda. It is trading at 930 which is near its historical high of 999. In fact it may again touch 999 but some how I am not comfortable with Hero Honda. I shall be more comfortable buying Hero Honda around 550/600.

TVS Motor
TVS motor closed at 19.35 on 27 Feb 2009 and is a candidate fit for buying. Above 20 it will qualify as a breakout story and will easily show 25 to 27 in trade. However below 16 it is very weak and hence some caution should be exercised. Nonetheless one shouldn't miss taking TVS motor in his portfolio at present level, albeit in measured quantity. In case it breaches 16 then buy at 11.

Sunday, March 1, 2009


Protectionism is the new name of the game. What was anathema for Americans has now become the new mantra for survival. Trade protection is how America is responding to the present economic crisis. Outsourcing is going to be penalised by the new American Administration of President Obama. And the ripple effects will be felt by the Indian IT industry. What with Satyam weighing heavy around its neck as millstone, the IT Sector in India now has to contend with another stab at its revival plans. But our focus will be to spot the buying opportunities that companies in this Sector are going to present to us in near future.

Infosys can be bought with lot of caution at around 1100 to realise some quick profits by very smart and alert traders. But for an investor there is buying opportunity only at level of 900. Short term investors can enter at around 900 for a gain of Rs 200. Long term investors can invest 50% at this level. If Infosys breaches 900, one can safely look for a buy at 600.

Below 450 short term investors can look to enter TCS at 318 . At this level they will be able to garner profit of Rs 135. Long term investors can put 75% of their investment at level of 318.

If you are a brave hearted trader then you can buy Wipro at 180. But the caveat is that you must exit at the slightest weakness at 180. Wipro is ready for the level of 110 and it is at this level that it will present an excellent buying opportunity. Don't miss it.

HCL Tech
Hcl Tech will present itself for buying between 72 and 76. Be on the look out for that level. In an intra-day move it may also touch 60 but that will just be providential for anyone to catch it at that point.

Satyam Computers
What can be said of Satyam! It has not only taken the wind out of the entire IT sector but has also has put a question mark on the credibility of Corporate India. One can consider buying Satyam only around 10. My guess is that it is most likely to touch its historically lowest price of Rs 6.3 or there-abouts.