Technical Outlook Of PFC

PFC(Power Finance Corporation) is a key beneficiary of ongoing power sector reforms and may be at its lower side of fundamental value currently. Its poised for re-rating due to accelerated power sector reform and loan growth coupled with lower borrowing costs & stable assets in the days ahead.

Looking at the chart, technically, above 296-300 zone, PFC(CMP: 294) may target 313-320 zone immediately and sustain above that it may target 350 in the short term. Mid to long term target may be around 385 and 450 zone.

On the downside, 268-264 zone should be strong positional support and sustain below that came 242-232 zone.



 

Technical Outlook Of Nifty Fut(NSE-MAR):1-2 days

For Nifty Fut(NF), 8713-8675 zone is now immediate support and sustain below that, it could drift to 8494-8450 zone.

On the upside, NF has to sustain above 8790-8830 zone for any decisive movement up to 8953-9080 zone.

Railway budget was pragmatic and realistic but market did not like the small freight increase issue yesterday. Tomorrow's budget may be also pragmatic, but the factor is market is over hyped and expectations are huge. But, we have to borne in mind that reform is not a one day (Budget day) event, it will go on over the years and next year RS majority will be more vital for the Modinomics.

Trading Levels: Nifty Fut(NSE-MAR)

		Gap Up/Dw	(Indicative)
SGX NIFTY	8770	40
				NF-MAR	LTP	8730
	SL (+/-) 10 POINTS	FROM SLR
	Intraday Swing	Trader
			T1	T2	T3	SLR
Strong >	8740		8790-8830*	8856-8873	8891-8905	<8720
Weak <	8720		8704-8675*	8649-8615	8572-8513	>8740
FOR	Conservative	Positional	Trader
			T1	T2	T3	SLR
Strong >	8740		8830*	8891	8995-9080	<8720
Weak <	8720		8675*	8615	8494-8450	>8740

Technical Outlook Of ACC

ACC (CMP:1655) gives a good run after its result in the 1-st week of this month from 1481 to 1672 yesterday. There is also buzz of rationalization of excise duty structure for cement industry and some sort of import duty application on imported cement in the forthcoming budget. May be, today's rail budget also help cement industry in the form of cross subsidy reduction plan between passenger & freight fares. Also there are affordable housing, infrastructure theme etc.

Technically, ACC now has to sustain over 1685-1700 zone for 1800 in the medium term and 2200 in the long term (FY-16).

On the downside, inability to sustain above 1685-1700, it may attract some selling and below 1660-1640 zone, it may fall to 1590 & 1545 level in the short term.

As par Benjamin Graham model of deriving ready made quick fundamental valuation, median value of ACC is also near 1800 (??, I am not sure, if it works perfectly in every industry, but it may give you some indication).

SCRIP	EPS(TTM)	BV(Act)	P/E(AVG)	LONG TERM	SHORT TERM	MEDIAN VALUE	200-DEMA	10-DEMA	OPEN	HIGH	LOW	CLOSE
ACC	61.82	415.72	35.01	1763.87	1866.47	1815.17	1437.52	1609.61	1626.2	1672	1614.1	1655.75

Technical Outlook Of Bank Nifty Fut(FEB)

Bank Nifty Fut(BNF) is a clear under performer this month and continuously putting stress on the overall market as some of its key components are under some type of stress. Also there will be around 4725 Cr. outgo from the PSU banks as a result of yesterday's wage agreement, but the proposed 4 day strike ahead of budget is averted.

Looking at the chart, technically BNF (LTP:18844) has positional support now around 18764-18680 zone and sustain below that, it may fall up to 18292-18051 zone (Pre-budget ??).

As it may be technically oversold in the last hour yesterday, BUY ON DIPS strategy may work ahead of budget & rate cut hopes  (provided LS & RS functions smoothly), keeping in mind the above support level of around 18700-18650.

BNF will face resistance on the up side around 19300-19614 and sustain above that we may see 19926-20935 zone again.

Technical Outlook Of Nifty Fut(NSE-FEB):1-3 days

Nifty Fut(NF) (LTP-8846) has positional support zone of around 8800-8780 and sustain below that may invite 8637 & 8515 area.

On the upside, it has to sustain above 8895-8940 zone for 9030-9065 and 9300 zone (after dream budget ??).

Budget sessions will start today and Govt. has to pass various reform bills those were under ordinance (Insurance/Land/Coal), which may not be a smooth affair, specially for Land Reform Bill. On the other hand, budget and rate cut hopes may keep the market alive & volatile.

On the global front, Greece has to submit its future plan for reforms by today after getting four month extension after a week long soap-opera. The drama will continue till June'2015 and possibly more to come. In addition, all eyes will be on Draghi and Yellen tomorrow for their speeches tomorrow.

Trading Levels: Nifty Fut (NSE-FEB)

		Gap Up/Dw	(Indicative)
SGX NIFTY	8855	9
				NF-FEB	LTP	8846
	SL (+/-) 10 POINTS	FROM SLR
	Intraday Swing	Trader
			T1	T2	T3	SLR
Strong >	8800		8850-8893	8922-8940*	8956-8992	<8780
Weak <	8780		8747-8707	8675-8637*	8604-8553	>8800
FOR	Conservative	Positional	Trader
			T1	T2	T3	SLR
Strong >	8800		8893	8940*	8992-9030	<8780
Weak <	8780		8707	8637*	8553-8515	>8800

Is it time to sell Jubilant Foods and enjoy weekend Pizza Party ?

Jubilant Foods (JF) has given immense rally on the back of Same Stores Sales Growth (SSSG) and expansion plan with Dunkin Donuts. Its also a reflection of India's prospective GDP growth story and higher disposable income, specially for the urban youths. But it appears that it ran too much within a short period of time (obviously its a high beta scrip) and this may be far ahead of its fundamentals (present P/E is around 91 against industry average 49). So, some retracements could happen.

Looking at the chart, technically, JF (CMP: 1625) has to sustain above 1700-1720 zone for 1875 in the medium term (may be after dream budget ??). Its immediate support is around 1600 & sustain below that it could retrace up to 1542-1494 and 1447-1380 area, where it could attract some buying support.

Technical Outlook Of Ambuja Cement

Ambuja Cement was out with its QTR result yesterday evening. The result appears to be well below street estimate, specially EBITDA. Going by the momentum for the stock for the last few sessions, "Strong Recovery Cycle" in this Cement sector may be largely discounted by the stock.

Looking at the Chart, Ambuja Cement (CMP:270) has to sustain above 272 zone for short term target of around 280.

Failure to sustain above 272 may bring in sellers and break below 264 may bring it to 256-252 zone in the next few sessions. It may find strong support near 244-241 zone.

Technical Outlook Of Tata Steel

Tata Steel (CMP:370) retraces quite a lot from its recent high of around 421 (05/01/2015) after its below estimate QTR result. Raw material shortage and cheap export of Steel by China & Russia may be some of the major factors behind its dismal result.

It took support of 343 zone few days ago on the back of its disinvestment plan in Mozambique asset (coal mines) and plans to acquire major stake in some of its NORDIC zones (Europe) service centres (Strip Products).

 Technically, it has to sustain above 375-380 zone for immediate(2 weeks) target of 401 and 425. Only a consecutive close above 436 zone will will pave the way for 471 and 491 in the short to medium term.

On the downside, immediate support will be around 367 and below that comes 360 & 343.

It has suffered a lot because for the first time in 100 years of its existence, all its mines are closed for raw materials. It has to import iron ore which squeezed its EBITDA from around 40% to 25%. Tata Steel is now focusing on Kalinga Nagar Plant to start its operation. Also, there may be some policy change in the forthcoming budget for steel industry (specially for iron ore related). 

Tata Steel is also planning to divest some of its loss making EU assets to streamline its balance sheet.

In short, worst may be behind Tata Steel.

Technical Outlook Of Nifty Fut(NSE-FEB):1-5 days

For Nifty Fut(NF), 8880-8900 zone may offer some intermediate resistance and sustaining above that it could reach 9030-9065 zone again by this week. Before budget, NF could scale 9300 on budget hopes and if the budget truly delivers the expected 2-nd Generation Reform, 9600 is in the offing (there will also be some rate cut hope after budget).

As the USA market closed today, movement in our market may be muted. Also its extremely over bought in the intraday chart. So, some retracements should occur, if it fail to sustain above 8880-9000 zone today. Immediate intermediate support should be near 8775 and below that 8729-8690 zone should offer positional support as of now. Our market will keenly watch WPI figure today.

Trading Levels: Nifty Fut(NSE-FEB)

		Gap Up/Dw	(Indicative)
SGX NIFTY	8853	-19
				NF-FEB	LTP	8872
	SL (+/-) 10 POINTS	FROM SLR
	Intraday Swing	Trader
			T1	T2	T3	SLR
Strong >	8900		8925-8955	8975-9000*	9030-9065	<8880
Weak <	8880		8851-8833	8806-8777*	8729-8690	>8900
FOR	Conservative	Positional	Trader
			T1	T2	T3	SLR
Strong >	8900		8955	9000*	9065-9300	<8880
Weak <	8880		8833	8777*	8690-8612	>8900

Technical Outlook of HDFC Bank

Technically, for HDFC Bank (CMP:1065) has immediate target of 1100 and sustain above that it could reach 1170/1185 (short term) and in mid term, it could scale 1250 zone. Immediate positional support will be around 1030-1022 area.

HDFC Bank announced "Above Street Expectation" result on last Saturday. Before that, it also successfully raised INR 10000 Cr last week, through a mix of ADR(s) & QIP(s). For 2014, it was grappling with FII investment issue and it is now resolved in favour of HDFC Bank. Going forward, loan growth and other earnings may accelerate on the back drop of "Shinning  India". This coupled with stable asset quality (NPA), adequate capital to support growth and robust management may bring ensure at least 25% CAGR growth in the coming years. Also, it may consider to demerge/list its insurance & broking subsidiary in future and may also consider merging with its listed housing finance subsidiary (HDFC), provided factors are favorable.

Change of wind in Suzlon post Shanghvi investment ?

 Technically, Suzlon (CMP:19) has to sustain (at lest 2/3 consecutive close) above 21 zone for short term target of 36 area. Sustain above 36 zone, it may regain 62 area in the mid term. Strong positional support is near 14 area.

 Though Shanghvi deal is already discounted by the market to some extent (nearly 25% up-move last week), it may have potential for more up move.

There are lots of news in Suzlon for the last few months for stake sale (to reduce enormous debt in Balance Sheet). Latest one is BUY of 23% stake in Suzlon for INR 1800 Cr. and some type of financial assistance of INR 4000 Cr. (for smooth working capital requirement) by Shanghvi Family of Sun Pharma. Suzlon will also BUY PV Power Tech (Solar Energy-Sanghvi Family) in an all stock deal. This will facilitate Suzlon's entry into Solar Energy. But first, Suzlon will have to repay debt of INR 6000 Cr. to SBI (which it may pay from its recent INR 7200 Cr. sale of its German arm Senvion SE). There may be also an assurance of Sanghvi Family to look into further requirements of funds for Suzlon on a case to case basis/ specific project financing etc.

The Indian Govt. is also very proactive in the field of clean & renewable energy. Investment by Shanghvi Family (in personal capacity) in Suzlon, might bring back some confidence of market players in its management, which was lost heavily post FCCB Bond default fiasco. Suzlon still has nearly 17000 Cr. (INR) debt in its book. Such enormous debt management will be a key challenge for it. There will be also balance sheet dilution post Shanghvi Family investments. For the last few years, growing economic slow down both in local & global markets, dent its Wind Turbine sale. There were also other negative factors such as removal of tax concessions for wind power in India, Suzlon's high interest burden & CDR in 2012, stiff competition form Chinese manufacturers. But Suzlon is now the process of retiring high cost debts and targeting high growth markets like India, China, Brazil etc. Also there may be some significant stimulus in the forthcoming budget for renewable power energy sector (wind/solar/biomass etc). This deal is also looked good for Shanghvi Family and a win-win situation for both. Re-rating of Suzlon may be on the card. This may bring an opportunity for lots of retail investors who were stuck with Suzlon  at high prices for the last few years since 2008 to average it & turn the "Suzlon" portfolio profitable.