Archive for April 2011



BEST BUYING LEVELS

Written by HARIKRISHNAN.T
0 comments

I think Nifty will be in the range 5670-5900 for the coming weeks.

Immediate support for Nifty is 5940 and 5970.

If Nifty breaks that support, the next level will be 6030 and 6080. But it is possible only by the consistent buying of FIIs.

The following are the best entry levels for various stocks.

Bharti Airtel: The safe entry levels are 353 and 320. The immediate resistance of this stock is 407.

ACC cements: The best entry levels are 1060 and 1042. Immediate resistance is at 1210.

HDFC Bank: Banking sector are showing good performance in this quarter. The buying levels are 2265. The support for this stock is at 2335. Immediate resistance is at 2544.

JSW Steel: Entry levels for this are 948 and 906. Immediate resistance is at 1060.

HCL Tech: the company showed a good quarter result. I think we can make investments at 511 and 480. Book profits at 560.

Sunpharma: It is a leading company in the pharmaceutical sector. The best entry levels for investments is 426 and 403. Immediate resistance at 500.

Bank of Baroda: Entry level for this stock is 956 and 916. The immediate resistance will be at 1050. So profit booking is advisable in this range.

IFCI: The safe entry level for this stock is 51 and 46. Resistance is at 62.

Infosys: I recommended Infy a week ago. The safe levels for entry is 2750 and 2850. Resistance is at 3200.

Yes Bank: Yes bank is one of the emerging private sector bank in India. Announced a good quarter result. The safe level for investing is 312 and 289. 360 is the immediate resistance.

Hindalco: The support level for Hindalco is 204 and 186. The resiatance is at 240.

Vijaya bank: Pharma sector and banking sector are the best sector for investments in this year. The safe levels for investments is 86 and 74. Immediate resistance is at 103.

Cipla: Cipla is the leading company in pharma sector. The safe entry level is 300 and 290. Immediate resistance is at 360.

Note that make investments only in these ranges. I prefer step by step investments in any stocks.

Regards Hari " लोका समस्ता सुखिनो भवन्तु "



POSITIVE GLOBAL TRENDS AND SHORT COVERING HELPED THE MARKET.

Written by HARIKRISHNAN.T
0 comments

Indian equity benchmarks showed remarkable performance on Wednesday, with the Sensex adding 349 points supported majorly by strong global cues, tracking strong quarterly numbers from technology companies.

Short covering was another reason that led the rally as index had fallen about 600 points in previous sessions.

The 50-share NSE Nifty surged 110.90 points or 1.93%, to close at 5,851.65 - helped by 48 shares out of 50 on the index.

Experts feel that today's rally was quite surprising.

TCS stock, which rose more than 4% and sparkling third quarter result of the HCL Technologies also helped in boosting the indices.

The market is more concerned about the quarterly IT earning results and eagerly waiting for TCS and HCL Technologies to create magic.

HCL Technologies reported quarterly revenues of Rs 4138 crore, earnings before interest, taxes, depreciation and amortisation of Rs 716.6 crore, and a net profit of Rs 468.2.

Private sector lender Yes Bank’s fourth quarter (January-March) net profit rose 45.2% year-on-year to Rs 203.4 crore, beating analysts’ estimates on the back of a strong growth in deposits and loans.

Mukesh Ambani flagship company Reliance Industries (RIL) is set to report 16.8% growth in its fourth quarter net profit of Rs 5,500 crore as against Rs 4,710 crore in the quarter ended March 2010, according to CNBC-TV18 poll.

Regards Hari " लोका समस्ता सुखिनो भवन्तु "



FINANCIAL INSTRUMENTS CONTD.....

Written by HARIKRISHNAN.T
0 comments

Value-weighted Indexes: Unlike in a price weighted index, in a value weighted index, the weights are based on the market cap of the stocks. 

Both Sensex and Nifty are value-weighted indexes. While estimating Sensex, BSE also takes into account the free float factor.


To illustrate how value-weighted indexes are computed, lets look the 50 shares Nifty first.


The total value of the 50 shares included in Nifty as on April 7, 2005 is Rs.958708.3 crores. 

This is approximately 60% of the total market value of all the stocks listed in NSE.


Weight can be calculated using the formula


Weight of a company=Market cap of the stock/Total market of all the fifty stocks.


For example the market cap of a company say ABC is Rs.5212.94 crores. 

Then the weight of that particular company will be 5212.94/958708.3=0.0054=0.54%


Note that market-value-weighted indexes are unaffected by stock splits.


Computation of Sensex: Like Nifty, Sensex is also a value-weighted index. 

However, the market cap of each stock is multiplied with what is called a free-float factor to arrive at the modified market cap of stocks.


Lets explain the computation of Sensex by using the example of Infosys.


Market cap of Infosys is Rs.59080.73crores as on April 7, 2005. 

Free float factor is 0.8 this implies that about 20% of stocks of Infosys are with the promoters of the company.


So the modified market cap will be 59080.73*0.8=Rs.47264.59crores


The combined market cap of all the 30 stocks included in Sensex is Rs.387067.1 crores as against a total market cap of Rs.732212.92 crores.


So the weight of Infosys will be


Rs.47264.59/Rs.387067.1=0.1221=12.21%

(Note that the calculations are based on the 2005 value....)
Regards Hari " लोका समस्ता सुखिनो भवन्तु "



FINANCIAL INSTRUMENTS

Written by HARIKRISHNAN.T
0 comments

Financial markets are traditionally classified into Money markets and Capital markets. 

Money market instruments include short-term, marketable, liquid, low-risk debt securities. Capital markets, in contrast, include longer term and riskier securities. 

Capital markets are sub divided into the following categories: Longer-term bond markets, Equity markets, and the derivative markets for future and options.


Stock market indices: We can divide the stock market index into 2 categories Price-weighted index and value-weighted index. 

We will start our discussion of stock market indices by discussing about Dow Jones Industrial Average (DJIA) for 2 reasons. It is probably the oldest known index in the world. And secondly, it is a price weighted index.


Dow Jones Averages: DJIA of 30 large, blue-chip corporations has been computed since 1896. 

Originally, the DJIA was calculated as the simple average of the stocks included in the index.


To illustrate this, consider the table for the hypothetical two-stock version of the DJIA like this.

  

Here the divisor “d” will be 2 since it includes 2 stocks. 

Initial value of AB is 25 and XY is 100 so the initial index value will be (100+25)/d= (100+25)/2=62.5


The final price of AB is 30 and that of XY is 90, so the final index value will be (30+90)/2=60


So the 2.5 point drop in the index is a 4% decrease.


Similarly a portfolio holding of each stock would also have an identical 4% decrease in the asset.


Consider another situation in which XY were split two for one so that its share price fell to $50. 

Consider the table like this.


Following a split, the divisor “d” must be changed to a value that leaves the average unaffected. 

Initial price of XY fall to $50 from $100 because of stock split. So the number of shares just doubled to 2 million from 1 million.


For calculating “d” we can use the formula sum of the post split stock price/d=average presplit price


That is equal to 75/d=62.5 so d=75/62.5=1.20


So calculating the index by using the new value of d we will get like this (30+45)/1.20=62.5.


That is the index is unchanged.


Very interesting information: Because the DJIA are based on small number of firms, care must be taken to ensure that they are representative of the broad market. As a result, the composition of the average is changed every so often to reflect changes in the economy. The last change took place on November 1, 1999, when Microsoft, Intel, Home Depot, and SBC communications were added to the index and Chevron, Goodyear Tire & Rubber, Sears Roebuck, and Union Carbide were dropped.


Both Sensex and Nifty are Value-weighted indices. The details about value-weighted indices will be discussed tomorrow.


Regards Hari " लोका समस्ता सुखिनो भवन्तु "



SENSEX SLIDES 310 POINTS......

Written by HARIKRISHNAN.T
2 comments

Today I realize the power of Infosys in Indian economy.

Sensex slides 310 points on weak Infy notes.

Inflation figures also affected market in the negative way.

Infosys closed Rs.316 in red. 

Since Infosys is the giant in the IT field, long term investors can make investments in this range.

This results will not not affect Infosys future growth, I'm sure.

The wholesale price index (WPI) for the year rose to 8.98% in March as against 8.31% in February on higher fuel and manufactured product prices. 




MUTHOOT FINANCE IPO

Written by HARIKRISHNAN.T
2 comments

Gold financing company Muthoot Finance is set to tap the capital market with a public issue of 51.5 lakh equity shares of face value Rs 10 each on April 18. 

The issue will constitute 13.85% of the fully diluted post issue paid-up equity share capital of the company.

It is the largest gold financing company in India in terms of loan portfolio. 

It provides personal and business loans secured by gold jewellery, or gold loans, primarily to individuals.

Issue proceeds will be mainly used for augmenting capital base to meet future capital requirements to provide for funding of loans to customers. 

Issue will close on April 21.

ICICI Securities Limited, Kotak Mahindra Capital Company Limited and HDFC Bank Limited are the book running lead managers to the issue.( The lead merchant bankers appointed by the Issuer Company are referred to as the Book Running Lead Managers)

Regards Hari " लोका समस्ता सुखिनो भवन्तु "



BOOK PROFITS.......

Written by HARIKRISHNAN.T
1 comments

I don't know what is happening in the market for the past 2 weeks. A terrific come back from 17000 levels to 19000 levels.

I think it is the right time for booking profits.

Ever since Nifty futures started trading, ten consecutive higher closes have happened only on two occasions in the past. This is one of the important point which should be noted by investors. This particular sentiment will never support market long.

I think the 20,000 range is still a psychological level for the market, because the global conditions are not good.

So at least for the next 3 to 4 months market will be in the 17000-19000 range.

There is no logic for the markets to hold on at these levels other than liquidity factors because clearly oil will be a big issue going ahead.

I think the next correction in the market mainly depend on the crude oil price. I think if the crude oil price go beyond $120, then expect a correction.

The stocks that I advised 2 weeks ago all cross the target I specified. Dhanlaxmi bank, V-guard, IDBI bank, LIC HF, Essar oil etc. crossed their upper cut off.

I cant advise any stocks now for the short term point of view, because all my favorite stocks are selling at a higher range. So let a correction come, then I will advise my stocks for the next month.

Regards Hari " लोका समस्ता सुखिनो भवन्तु "