Tuesday 31 March 2015

Kotak Mahindra Bank--The New Generation Bank









Kotak Bank is another under performer in our market post budget days. Technically Kotak Bank (CMP: 1312) has positional support of around 1269 & below that 1236. Consecutive closing below 1236, it could fall to 1155 area (low probability as of now).

It has already took support of 1269 few days ago and now sustain above 1320-1345 zone, Kotak Bank may target 1390 & 1456 zone in the short term.Its mid term target may be around 1655.

Being a new generation bank, it may have less assets/NPA concerns comparable to its peers. With the acquisition of ING Vysya Bank, it has got much bigger & stronger loan portfolios & other assets and a superb distribution reach (specially in Southern India) of around 1000 branches all over India as of now. With a strong financial muscle & diversified portfolio and acquisition spree, Kotak Bank may be another "bright spot" in "Shinning India" in the coming days.

As par BG model of techno/funda valuation metrics, median value of Kotak Bank is around 1020 (considering average PE multiple of Banking Industry of around 23.23), but considering its own historical average PE of around 47.25, the median value is around 1456 under the current market scenario.


 
SCRIP EPS(TTM) BV(Act)  P/E(AVG) LONG TERM SHORT TERM MEDIAN VALUE 200-DEMA 10-DEMA
KOTAKBANK 36.21 247.03 23.23 985.47 1056.22 1020.85 1154.54 1326.27

 
KOTAKBANK 36.21 247.03 47.25 1405.46 1506.37 1455.92 1154.54 1326.27

Monday 30 March 2015

Technical Outlook Of Bank Nifty Fut (BNF: April)









BNF (CMP: 18277) has immediate positional support of around 17540 zone & sustain below that 17200 zone may come. At least two consecutive closing below 17200, BNF may fall up to 14250 area (low probability unless we see global melt down or some adverse development in the domestic front).

 It has already took support from around 17700 zone few days ago and sustain above 18350-18418 zone, it may target 19600-20750 & 21000  zone in the short term. Mid term target may be around 21650. For the intraday today, 17900 zone may provide immediate support.

It appears that some of the key negative news  (not so good results in Q4, NPA/Asset Quality concern, capitalization issues in PSB & unseasonal rains/crop damages etc) may have already discounted in the recent spate of corrections of around 15% from its cyclical top.

Going forward, forthcoming RBI policy event may be a trigger in the form of SLR/CRR cut in order to reduce overall effective costs of funds to the banking industry for smooth transmission of rate cut to the ultimate borrowers. Further repo rate cut (0.75-100 bps) may happen gradually within FY-2016.

Our Govt. is also taking a definitive step to address the "concerns of the Oppositions" in the Land bill and may be able to pass it with some corrections in the forthcoming 2-nd part of budget session starting from 20-th April. This, along with GST may be another game changer of "Modinomics" & investment cycle may also start to pick up, which will also be beneficial for the banks.

Globally, Yellen is clearly sounds like "dovish" in her late hour speech on last Friday. All eyes will be on the job data of US in this week end and on 9-th April for Greece (scheduled IMF loan tranche payment) to keep the suspense on.


Friday 27 March 2015

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









Yesterday may be a sad day for many of us (both from Cricket & Market perspective). But we must remember that Australia is truly the number one team in all aspects of cricket & despite superb momentum in all the other previous games, India failed miserably in the crucial match.

Now, for Nifty Fut (NF), vital support zone is 8400-8370 zone (For NS, its 8300-8270) and consecutive closing below that, NF may dip to 8233-8186 zone (For NS 8158-8102).

On the up side, NF need to sustain above the previous broken TL of around  8506 (For NS 8470) for gaining momentum towards 8745-8840 zone. (For NS 8720-8815).

Globally, S&P-500 also took support from its vital zone of near 2029 yesterday & now comfortably trading over 2045 around 2055 zone. Above 2062, it may again target its previous cycle high of 2106-2118 and may touch 2135 also.

Somewhat hawkish comments about Fed rate hike probability from some Fed members (Lockhart & Bullard, who are supposed to be in the dove club of the FOMC) caused the sliding of S&P-500 for the past few days.

Personally, I feel that this type of contradictory chit chat by different Fed Members will continue to go on through out the year to control the market (USD). It is not possible for the Fed to tell the world clearly that they are not in a position or have enough confidence to be ultra hawkish on Fed policy and will be preferred to be on the side line for 2015-16 (or for ever ?)

Conflict in Yemen involving OPEC countries certainly has helped Crude oil for a long deserving bounce back (short covering), but, it may have limited impact on the global stock market. Yemen, being a extremely failed country virtually run by extremists, no body bothers about it being attacked by external countries in order to restore peace & stability and take control of oil & military assets.

On the domestic front, there was no such negative news except some overdone concerns of poor corporate earnings in the 4-th QTR. Our market may be well poised for a deserving bounce back.


Trading Levels: Nifty Fut (NSE-APRIL)





Gap Up/Dw (Indicative)


SGX NIFTY 8457 1



NF-APR LTP 8456
SL (+/-) 10 POINTS FROM SLR
Intraday Swing  Trader
T1 T2 T3 SLR
Strong > 8430 8471-8496 8529-8581* 8627-8700 <8410
Weak < 8410 8374-8357 8340-8308 8261-8215 >8430







FOR  Conservative Positional Trader









T1 T2 T3 SLR
Strong > 8430 8496 8581* 8700-8745 <8410
Weak < 8410 8357 8308* 8215-8185 >8430


Thursday 26 March 2015

Will SBI Proved To Be Another "Mouka Me Mouka" ?








Technically, SBI (CMP:265) is just trading on the verge of its important positional support zone of 264-260 & sustain below that 255 should provide another vital support. Consecutive closing below 255, it may target 245 & 217 zone on further downside. (Low probability unless & until Nifty break & sustain below 8470-8440 zone).

On the upside, sustain above 264, immediate target may be 280-284 and consecutive closing above that 296-315 may be in the short term. Its mid term target should be 335-341 and by FY-2016, target should be around 351-365 zone (it need to sustain over 280 zone convincingly).

Basically, SBI is presently in its structural consolidation mode, focusing mainly on cleaning its balance sheet from stressed assets / NPA rather than incremental loan growth. It may able to clean its stressed assets by the calender year-2015. With the expected pick up in the investment cycle and better GDP, thanks to "Modinomics", SBI may see a turnaround in its NPA. As with all the PSB(s), SBI is also suffering from recapitalization & consequent dilution of its EPS. There is also uncertainty about its forthcoming QIP issue pricing. Also, recent coal & mining fiasco is adding fuel for selling of all the PSB(s), including SBI, having higher exposure in such companies.

But, going by the recent spate of correction in its price, all such negative news may be already priced in largely.

By BG metrics of quick techno/funda valuation, its median value is around 263 in the current market conditions.

As for today's India-Aus match, technically, Team India is on the break out & target should be the world cup on Sunday with no SL.


SCRIP EPS(TTM) BV(Act)  P/E(AVG) LONG TERM SHORT TERM MEDIAN VALUE 200-DEMA 10-DEMA
SBIN 21.78 197.4 11.5 262.02 264.75 263.38 274.1 279.84

Wednesday 25 March 2015

Should We Grab ICICI Bank as "Mouka Me Mouka" ?









Technically, ICICI Bank (CMP:312) may be in the grip of panic selling post budget high of around 362 & its subsequent failure to give consecutive closing above 345 zone. Further break of its recent positional key support of 316 is also accelerating its selling.

Looking at the chart, 307-304 zone should provide important positional support as of now and sustain below that, it may fall freely up to 290-270 zone. But break & sustain below 307 zone is a low probability until Nifty break & give consecutive close below 8470-8440 zone. 

On the up side, consecutive close above 316 zone is very important for ICICI Bank & its short term target should be 345 & 362 zone. Sustain above 362, it could again target 390-410 zone in the mid term. Long term target may be 530.

Frankly speaking, I could not find any such negative news recently for ICICI Bank, except some concern on its NPA. It had started a separate unit/vertical post 2005 for its NPA recovery and proper management for stressed assets. But at the same time, we are probably in a structural improvement in asset quality of banking industry, specially for well managed private banks. Credit growth should pick up gradually and fresh slippages should come down.

For ICICI Bank, there is also scope of vast de-leveraging in the form of insurance (I-PRU) & securities (I-Direct) business.

Worst may be over for ICICI Bank.

As par BG model of techno/funda metrics, median valuation of ICICI Bank (stand alone data) is around 380 under the current market scenario. 


SCRIP EPS(TTM) BV(Act)  P/E(AVG) LONG TERM SHORT TERM MEDIAN VALUE 200-DEMA 10-DEMA
ICICIBANK 18.81 126.28 23.88 377.69 383.34 380.52 317.58 327.15








Tuesday 24 March 2015

Should We Buy Jindal Steel (JSPL) in Panic ?










Technically, JSPL (CMP:154) has immediate positional support zone of 137 & 125-119 zone. Sustain below 119, it could dip to 105-88 zone (low probability as of now).

On the up side, sustain above 153, it will gain momentum and may target 182-210 zone in the immediate to short term. Consecutive closing above 210, it could move to 255-328 zone in the mid-long term, but for that, issues about its key coal block allocation fiasco has to be resolved in its favour.

JSPL may be one of the beneficiary of the infrastructure push story in "Shinning India".

But, it is one of the biggest looser since the SC verdict on coal block allocation around Aug'2014. Recent key coal block (For JSPL) de-allocation fiasco in auction also added further slide in its stock price yesterday. But, as expected, the Company moved HC swiftly on yesterday itself and able to successfully procure an interim stay on the de-allocation order of the Govt, which means that the present statusco of the the controversial key coal mines will remain with JSPL, until the HC heard the matter in full & give its final judgment.

Eventually, this particular issue & all the other related issues may go the SC, from where we could find an acceptable solution for all the concerned in the larger interest of India's growth story.

Ultimately, availability of coal (fuel) at affordable price is key to power & steel production of many corporates, including JSPL and this is an vital issue for our fragile infrastructure and confidence of investors in the policy matter of our Govt.

At this point, except clarity about this coal block allocation issue, all the other fundamental matters are irrelevant.


Monday 23 March 2015

Technical Outlook Of Nifty Future (NSE-MARCH): 1-5 days















Immediate positional support for Nifty Fut ( LTP: 8615) is around 8545-8523 zone & below that 8487-8469 area. Consecutive closing below 8469, NF could dip to 8300-8120 zone (low probability as of now).

On the upside, NF has to sustain above 8665 zone for any meaningful rally up to 8740-8845 zone by this week.

Overall, we could see a range bound consolidation (8469-8845) in this week. Although maximum reform bills (required legislative approval) were passed in our RS, Land bill got stuck and the Govt. has to plan something shortly, as after 5-th April, the Land ordinance may lapse. Going forward, GST bill may also be a game changer and there should not be any major political hurdle to pass it.

Market will closely watch RBI tone (may see some action on CRR/SLR front to ease overall cost of funds of the banks & effective transmission of rate cut to the consumers;  further repo rate cut to the tune of 75-100 bps may happen gradually in FY-2015-16).

Earnings result (4-th QTR) will also be keenly watched in the next month which is not "great" so far.

It seems that, our market is in the dilemma of "March Financial Year Ending"  and DII/HNI(s) are in some type of selling/profit booking/portfolio realignment mode, despite overall positive global cues and not so negative domestic cues.

Trading Levels: Nifty Fut (NSE-MARCH)





Gap Up/Dw (Indicative)


SGX NIFTY 8615 0



        NF-MAR LTP 8615
             
             
  SL (+/-) 10 POINTS FROM SLR        
             
  Intraday Swing  Trader        
      T1 T2 T3 SLR
Strong > 8580   8605-8665 8692-8740* 8772-8800 <8560
             
Weak < 8560   8545-8523 8487-8469* 8411-8390 >8580







FOR  Conservative Positional Trader









      T1 T2 T3 SLR
Strong > 8580   8665 8740* 8800-8845 <8560
             
Weak < 8560   8523 8469* 8390-8319 >8580
             

Friday 20 March 2015

Technical Out Look Of Axis Bank









Axis Bank retraced quite a lot post budget rally (on the back of removal of distinction between FII & FDI limits, specially in private banks). Axis Bank has also some better ratio in terms of asset quality (NPA) in comparison to its peer. Its also planning to enter into offshore investment banking to tap corporate bond issuance markets as Indian corporates are increasingly tapping overseas cheap market for the same. Going forward, expected thrust in Indian economy as a result of "Modinomics" may help immensely the banking sector. Also, RBI may tweak SLR/CRR rate in the forthcoming policy date on the 1-st week of April (Repo rate may be gradually cut by another 50-75 basis point by next twelve months as immediate hawkish stance of Fed recedes ).

Looking at the chart, technically Axis Bank (CMP:563) has immediate support of 558 & below that 546-540 is a good positional support zone. At least two consecutive closing below 540, it could fall to 525-520 & 460 zone (low probability as of now).

On the up side, sustain above 558, immediate target will be 585-600 zone. Consecutive closing above 600, short term target may be around 625-655 and mid/long term target should be 675-705 and 725-750.

Talk of definitive Greece agreement by next few days and reform bill pass by our RS may help the market.

As par BG model of techno/funda valuation, median value of Axis Bank is around 605 (stand alone data) under the current market conditions.


SCRIP EPS(TTM) BV(Act)  P/E(INDS) LONG TERM SHORT TERM MEDIAN VALUE 200-DEMA 10-DEMA
AXISBANK 29.63 161.42 23.88 574.12 636.38 605.25 465.85 572.35

Thursday 19 March 2015

Jubilant Foods : Should we buy and enjoy week end pizza party for dovish Fed and to celebrate possible India World Cup win ?








Jubilant Foods (JF) is one of the favorite high beta trading scrip in our market. From a low of around 937 in April-2014, it scaled a high of around 1720 in Feb-2015 (nearly 80% movement).

Technically, for JF (CMP: 1552), immediate good support is around 1535-1522 area & sustain below that 1500-1476 zone should offer positional support as of now. Consecutive closing below 1476, it may dip to 1400-1327 area (low probability as in the current market conditions).

On the up side, sustain above 1570, immediate target should be 1625-1657 zone & above that short term target could be 1700-1735 and mid term target may be 1778-1850. In the long term (6-12 M), it could scale 2100 zone (For all that, it will have to give at least two consecutive closing above 1700-1735 zone).

JF is fast expanding its network pan India, being the 2nd largest market for Domino's Pizza after US.
Its same stores sales growth (SSSG) is also above market expectations, thanks to recent festive Indian season, a varied menu and Dunkin Donuts. We could also order Domino's Pizza from selected trains now. Favorable Indian demographics and growing income & discretionary spending along with changing life style of young population in the "Shinning India" theme is helping JF a lot. Although so far, it appears that JF is able to keep its competitive pricing power, substantial service tax increase in the budget may be a headwind as with all such fast foods/hotels/restaurants. Going forward, GST may help this industry.

Fundamentally, JF is quite an expensive scrip having historically very high PE (now around 87). But majority of its chains are in  franchise format and therefore, its high Free Cash Flow (FCF) may be supporting its apparent high valuation.

As par BG model of techno/funda valuation metrics, its median value is around 1150 (Stand Alone data) & its EV/EBITDA (MKT CAP METHOD) is around 41. But such fundamental valuation is irrelevant in the current market scenario, unless our market suffers a significant correction.


SCRIP EPS(TTM) BV(Act)  P/E(INDS) LONG TERM SHORT TERM MEDIAN VALUE 200-DEMA 10-DEMA
JUBLFOOD 17.8 85.95 51 1114.05 1184.28 1149.16 1367.16 1544.96