Our web coverage of India is courtesy of Taran
Marwah [alternate email: Taran] Last Updated:
Mon, 18 Apr 2005 19:24:25
Foreign investors may invest
and trade India through Country Funds
(IIF, IFN, IGF, JFI), or individual stocks with ADRS on the NYSE such
as ICICI (IC) or Nasdaq listed companies such as Infosys Tech (INFY)
and SATYAM INFOWAY (SIFY). To track the Indices and Prices of shares,
Bombay Stock Exchange
National Stock Exchange
of India (NSE).
BSE SENSEX closed today i.e.
Friday – 2nd
Dec’05 at a life time high of 8962.
Up whopping 11.0 % from last month’s close of 8073. History was created today at
BSE as the SENSEX tested an all time high of 9056. BSE SENSEX breached past the
all important 9000 mark on 29th
Nov’05 on intra-day basis. The high
and low for the BSE SENSEX for Nov’05 were 9056 and 8050 respectively. The BSE
SENSEX was in a bull orbit in Nov’05 and surprised almost all analysts including
The FIIs came back with a
bang in India, in Nov’05 after pulling out US $ 840 Million in Oct’05. The figure
of US $ 600 Million mentioned in the last month’s update was an approximate
figure. FIIs poured in US $ 902.50 Million in the Indian Equities in Nov’05. On
top of this Domestic FIs and MFs pumped in US $ 123.00 Million. Indian Stock
Markets were on fire from 14th
Nov’04 onwards. The action was in
frontline SENSEX and NIFTY Stocks most of which tested their all time highs/new
52 week highs. Some Midcaps were on the same trajectory. This sudden pumping of
funds by FIIs was on account of a few factors - Robust Q2 GDP growth announced by Govt. of
India – 7.5 % , No further interest rte hikes in USA and Bullish stock markets
in Hong Kong, Japan and South Korea etc.
The respective indices – HANG SENG, N225, KOSPI etc testing new 52 week highs or
five year highs. For Q1 of this fiscal the Indian GDP growth was 8.1 % (
China’s GDP growth during
the same period was 9.4 % ). The Indian Govt. feels that the annual GDP growth
this fiscal would be in excess of 7.5 %. This would be only next to
China in the
FII investment into
Indian equities this fiscal till date have been US $ 8.70 billion. If FIIs
continue to pump another US $ 1.0 billion or so in Dec’05 – we can expect Indian
Stock Markets to test new highs. The Indian Stock Markets are heavily dependent
on FIIs flows for directions/trends in the future. I feel that FIIs will
continue to pump in funds in the Indian Equities but cannot estimate the quantum
of funds. I feel that BSE SENSEX should test new highs in
The levels to watch for Dec’05
There is a very strong support
for the SENSEX at 8540. If BSE SENSEX drops below 8540 - expect a free fall to
8250 levels. One cannot rule out anything in Stock Markets. FIIs may decide to
pull out a billion or so as in Oct'05 !
BSE SENSEX can breach past 9300
levels and if this level is sustained, I expect the BSE SENSEX to test 9500+ in
Dec’05 itself. The figure of 10,000 may then be tested this fiscal itself i.e.
by 31st March’06, if FIIs continue to pump funds as they have been
doing so far in the current fiscal except for Oct’05.
GOLD tested US $ 505.30 pto in
Kong. It is on its journey towards
$ 550 pto as predicted !
I feel NYMEX Crude would be US
$ 60.00+ for Jan’06 deliveries during Dec’05.
We would like to recommend the
following Sectors and Stocks for our investors :
- Defence Sector : In India, the
production of Defence Hardware is primarily with the Govt. of India A few years
back this sector was opened to Private Sector Indian Companies. We feel this
sector is a virgin sector in India and returns can be fantastic in
the medium to long term future, provided one can pick up top quality blue chip
stocks. We in India do not have the likes of Lockheed
Martin, Raytheon, Boeing, Northrop Grumman etc. We strongly recommend the
following three Stocks in this Sector in
KIRLOSKAR OIL ENGINES : This
Stock closed today at Rs. 198.00, a new 52 week high. This is a Rs. 2.00 paid up
Stock. We feel that the Indian Navy ( Mazagaon Docks Ltd. ) will place a huge
order for six units of diesel engines with this company by Jan’06 for propulsion
of its Diesel Electric Submarines through 2007-2010. The current EPS is Rs.
90.00.We expect the FY’06 EPS at Rs. 150 and FY’07 Rs. 180. We expect a price of
Rs. 400 in the next 9 to 12 months. Markets discount the future. Maybe one can
see this price earlier !
NELCO : This Stock closed at Rs. 113.20. It tested a
new 52 week high of Rs.123.00 in Nov’05.
The company has started delivering ‘ IR Ground Sensors ’ to the Indian Army and
huge orders are expected in the near future from Ministry of Defence, Govt. of
India. There is also a strong possibility of this company getting orders from
Indian MoD for Ground Surveillance Radars. I expect the price of this Stock to
double in the next 9 to 12 months to Rs. Rs. 240.00+.
L & T : Our old favourite
engineering stock tested Rs. 1810 today. We had predicted in March’05 that this
stock will test Rs.1800 in 9/12 months. Bull’s eye ! We predict the Stock to
double from this level of Rs. 1800 to Rs. 3600+ by Mid 2007. By this time it
would have bagged a US $ 1.5 Billion order from MoD, Govt. of India for supply
of 155 mm Towed Howitzers for the Indian Army. In addition it is also working on
a few select niche projects for the Indian MoD.
- BIRLA ERICCSON : We fancy this
optical fibre manufacturer in India ahead of its peers – VINDHATELE,
STERLITE OPTICS, AKSH OPTI etc. This Stock closed today at Rs. 32.95. The 52
week high and low for this stock are Rs. 49.00 and 21.00 respectively. This is a
turnaround stock and there is huge demand in
India for optical fibre to meet the
telecom infrastructure of both Govt. of
India and Private Telecom players. The OF from this company commands a small
premium in the marketplace because of its quality. We predict that the Swedish
partner will buy out the Indian partner – BIRLA Group in this JV Company in
2006. I predict this Stock to be Rs. 60.00+ in 12
- WOCKHARDT PHARMA : This Indian Pharma major closed today at Rs.
443.00. It’s 52 week high and lows are Rs. 557.00 and 325.00 respectively. We
fancy this stock ahead of its Indian peers – REDDYs, BIOCON, PANCEA, SHANTHA
etc. WOCKHARDT has already made significant progress in the Biogenerics Sector
in Europe. It is a leader in
India in EPO, Human Insulin, IFN and
G-CSF products. It is expected that global ‘Off
Patent’ Biogenerics Market would be worth US $ 10.00 billion by 2010. As
of today it is worth US $ 0.30 billion. WOCKHARDT will face intense competition
from global players like – TEVA, STDA, NOVARTIS and smaller niche companies
like- GeneMedix, Rhein Biotech and BioPartners etc. I feel WOCKHARDT is a Rs.
900+ Stock in Mid 2007.
We wish to point out one small
macro issue for the Indian Economy – Fiscal Deficit. For the fiscal 2004-05 the
gross Fiscal Deficit of Govt. of India was 8.3 % of GDP. This is a cause of
worry as with the Left Parties providing support to the current Congress led UPA
Govt. in India, this figure may
end up close to 10.0 % by 31st
Mar’05 against a budgeted figure of
7.7 % of GDP by the Planning Commission. Compulsion of running a coalition
government in India with the support of
the Leftists, who are blocking all reforms and not allowing to cut subsidies
Cheers to the BSE SENSEX in
The BSE SENSEX closed today i.e. 2nd
Nov’05 at a level of 8073 down a
whopping 7.0 % from the last month’s
closing of 8698 as of 3rd
Oct’05. The intra month high and low
for Oct’05 were 8822 and a shocking 7656 respectively.
We had predicted the BSE SENSEX
to test 8800 and then zoom to 9000 level
in Oct’05. BSE SENSEX created history on 4th Nov'05 by closing first time ever
at 8800. The BSE SENSEX tested a new life time high of 8822 on 5th
Nov’05 on an intra day
But the BSE SENSEX could not zoom to the magical figure of 9000 in Oct’05 as
predicted. BSE SENSEX crashed from 8822 to a shocking low of 7656 in a matter of
three weeks – a massive correction of 13.0%. We had predicted that 8100 level
could be a strong support for BSE SENSEX. This support was broken
The Indian Stock Markets
corrected sharply not on account of a terror attack or high crude oil prices as
mentioned in last month’s forecast but on account of FIIs pulling about US $ 660 million from the
Indian bourses in Oct’05 itself. The FIIs pulled funds from major emerging
markets in wake of a ‘intrest rate hike’ in the US Market and other global
factors best known to them. The Stock Markets in
Korea also got a pasting in Oct’05.
Although NIKKEI (N225) in Japan was at its 52 week
highs. The impact would have been more severe in India had the domestic MFs and
FIs not stepped in. They were nett buyers of Indian Equities to the tune of US $
250 million during the same period. Second reason for the sharp correction was a
mix-bag of Q2 ( cumulated H1) results of the current fiscal from Corporate
India. Pharma and Cement declared poor Q2 results. Profit growth in Steel,
Textile, Commercial Vehicles and White Goods sectors was slower than expected.
Telecom, Power, Two wheeler and Oil Sector were on the growth path.
The massive correction ( 13 % as per above ) took ‘wind
out of the sails’ from the Indian Equities. Some momentum stocks with stretched
P/Es in the Midcap Sectors corrected by 30 to 40 % from their Sept’05 closing
levels. There was carnage in Smallcaps and Penny stocks. Some of the Smallcaps corrected by 50% or
more. Almost all the Penny stocks were hammered out of shape with corrections
ranging from 100 to 700 %.
We have been advising investors
for the past two months to book profits and sit on cash or buy Gold. The yellow
metal was bullish in Oct’05 testing a level of US $ 480 pto on 10th
Oct’05 at COMEX and also at spot LME.
I feel investors to park at last 50 % of the funds into Gold for the next 12 to
18 months. One can get about 60 to 75 % returns in Gold from the current levels
of US $ 465+. We have predicted last month that Gold could test US $ 800+ pto in
Mid July’07. William Gary, President of M/s. Commodity Systems Inc,
USA, expects Gold to be
US $ 873+ pto in Mid 2008. Gold is moving up with US Dollar strengthening
I feel there is money is to be made in the Midcap Sector
in Indian stocks. Gains would be very stock specific in ‘turnaround’ and ‘merger and acquistion’
stocks in this Sector. On the macro level things are rosy for the Indian economy
in the future. Indian economy is expected to grow at 7.0% this current fiscal
and for the next fiscal too.
We advise Indian investors to
only allocate 50 % of their funds for Equities with immediate effect. Start
buying physical Swiss Investment Gold Bars from STC in
India at every dip in
Gold prices. At around US $ 480 pto your investment in Gold should be finished.
Alternatively investors who play commodity futures can buy Gold futures at NCDEX
in India for long positions.
We advise balance 50 % funds to be invested in select
Indian stocks as per our recommendation or other channels in the due course of
time. We have identified a couple of
proposed multi-baggers for 2006-07 and are studying them in detail. We
will post them in our next forecast or
We feel the BSE SENSEX will be range bound in Nov’05. I
feel there is a very strong support for BSE SENSEX at 7650 levels. The levels to
watch for BSE SENSEX for Nov’05 are :
R1 8200 R2 8320
R3 8400 R4 8530
S1 8000 S2 7880
If 7650 level is broken – we seriously advise Indian
investors to get out of all their equity holdings including the blue chips, as
we might enter a bear phase for the short to medium term. We feel this level is
a very strong support level but if FIIs decide to pull out a couple of billion
dollars in Nov’05 from the Indian Equities, then we can see the BSE SENSEX
crashing to any levels between 7500 to 7000 depending upon the FIIs net exposure
to Indian Equities. Nothing can be ruled out in the Stock Markets.
We repeat that in the long
term, we continue to be bullish on Indian Equities as 7.0 % annual GDP growth is
only next to China in the world. We
can see to a level of BSE SENSEX 10000+ in the next 15 to 18 months. There is no
denying the fact that property still is the most preferred asset class by an
average working Indian. As India has about 200
million working middle class – we can expect equities to be an exciting asset
class in the next two years. Hence we stick to our prediction of BSE SENSEX at
10000+ level in the coming 24 months or so.
We will revert with our recommended stocks soon. In the
meantime we suggest that Indian investors buy into Gold as mentioned
Cheers for the yellow metal !
The BSE SENSEX closed today –
Oct’05 at a life time high of 8698 up
4.0 % from 8381 as of
Sept’05 as per the last update. The
intra period highs and lows were a life time high of 8726 and a whopping low of
We had predicted last month that BSE SENSEX could march
past 8600+ levels. In fact the BSE SENSEX crossed 8700 level today and tested a
life time high of 8726 to close marginally below 8700 at 8698. History is being
crested at Indian Stock Markets with both BSE SENSEX and NIFTY testing life time
highs in past few weeks.
The frontline SENSEX and NIFTY stocks are being picked up
by FIIs and Indian MFs/FIs. Almost al these Stocks were all on fire with new
life time or new 52 week highs. I am not printing their new highs as the list is
too long ! FIIs are also picking up midcap stocks with strong fundamentals in
the Infrastructure Sector and Automobile Components Sectors. These stocks were
on fire too ! As predicted there was a correction in the BSE SENSEX but not a 10
to 15 % as expected by CLSA, France and other foreign brokerage houses. Even I
did not predict such a large correction. The BSE SENSEX corrected by about 4.0 %
between 21st through 23rd
Small Indian investors again got stuck with penny stocks
inspite of caution we have been advising for the past few months. The Indian
Stock Market Regulator – SEBI intervened a ten days back when the penny stocks
had a ‘blood bath’ on the streets. We cannot convince the small retail investor
to control his greed ! This has not happened for the first time in Indian Stock
Markets. The penny stocks were hammered down mercilessly by the Operators during
the above mentioned correction. SEBI had to intervene and put margins and
circuit filters in place. Still about 300 odd penny and midcap stocks must be
locked in lower circuit limits as announced by SEBI.
I am reproducing a few lines from the last update.
Quote “ It is
worthwhile to note that BSE SENSEX marched 7000 to 8400 in just 63 trading with
minor corrections. Now the march from 8400 levels to 9000 levels could be even
at a faster pace. ”
We feel that the
BSE SENSEX will test a level of 8800+ in
a matter of a week or so and then will march past the 9000 level in Oct’05.
Above 9000+ level the BSE SENSEX looks very very bullish and may test 9300 to
9500+ levels in Oct’05 itself. This is a pure FIIs funds liquidity driven
market. There could be minor corrections in the march towards the all important
level of 9000. Beyond 9000+ level I feel the BSE SENSEX will zoom to 9300++
The FIIs have till
date poured in excess of US $ 8.60 Billion into Indian securities. This means
that in July, Aug and Sept’05, the FIIs have poured in excess of US $ 4.10
Billion. At this rate at which the FIIs are pouring money into Indian Stocks we
might end up the calendar 2005 with a figure close to US $ 10.00 Billion which
will be a lifetime high for the Indian Equity Markets and close to
Taiwan, Japan and Korea. The P/E multiples in
India are though slightly higher today as compared to
the other countries as above.
India is proving to be an attractive destination on
account of a ‘real working democracy’ and expected annual GDP growth in excess
8.0 %. The Indian
Economy grew in Q1 of the current fiscal by 8.1% which is highly commendable but
agriculture growth was below expectations. This is a cause of concern but with
current government in Delhi this issue will be handled swiftly as per my
understanding. Reforms in the agriculture sector are not being blocked by the
communists who support the current government in
India. Please note that without the support of the
Left Front ( Communists ) the government would not have been formed in
March’2004. The Left Front is blocking all other reforms in
India in almost all the sectors – FDI hike in
Telecom, Aviation and Retail etc. They are also against privatization of PSUs.
The government is stuck as they cannot push ahead with the Reforms in any sector
advised to ride the rally and take profits home. No new stocks are beig
recommended at these levels. Any major decline can be used to enter the market
into frontline stocks for ‘pure short term trading’ calls for punters only
The levels to
watch in Oct’05 are:
R1 8800 R2 8900
S1 8650 S2 8580
S3 8500 S4 8400
I feel there is a
major support at 8500 level unless some major disaster happens in the world
markets e.g. a major terrorist attack in Europe/USA or Crude Oil trading above
US $ 72.00+. Nothing can be ruled out on these two accounts. I however feel that
Crude Oil would be firm at NYMEX in the band of US $ 65.0 to 67.0+ in Oct’05. If
Crude shoots above US $ 72.00+, then I expect the world stock markets to correct
sharply. Indian Markets will also follow suit ! Then even 8400 level maybe
breached and you can see a level of 8100 for BSE
We had predicted
GOLD to test US $ 470 pto in our last month’s forecast. Spot GOLD at LME traded
at US $ 473.25 pto on 21st Sept’05. At COMEX (NYMEX) in
USA the GOLD futures for Oct’05 delivery were traded at US $
473.00+. My prediction on GOLD was once again BINGO
I predict GOLD to
be close to US $ 550+ by Mid 2006 and to be near its all time high of US $ 800
pto in April/May’ 2007.
Stocks as brief synopsis :
a) McDOWELL : It closed today at a life time high
of Rs. 510.00. In April’05, when the price was Rs. 250.00+, we had forecast a
price of Rs. 500.00+ in short term.
b) TCS : Closed today at a life time high
of Rs. 1505.00. In March’05, when the price was Rs. 1400.00+, we had predicted a
price of Rs. 1800+. We still stick to our prediction.
c) L & T : Tested a life time high of Rs.
1578.00 during the period under review. In March’05, when the price was Rs.
1000.00+, we had predicted a price of Rs. 1800.00+. We still stick to our
d) SRF : Tested Rs. 346.00. We had predicted a
revised target of Rs. 350.00+ in July’05 forecast. Very close ! We advise
investors to exit from this counter when the BSE SENSEX is at 9000+. It is fully
priced at Rs. 350.00+
e) GE SHIPPING : Tested Rs. 221.00. We had
predicted a level of Rs. 220.00+ in the medium term in our April’05 forecast
when the price was around Rs. 164.00.
f) ONGC : Tested a new life time high
of Rs. 1100.00. In March’05 we had a forecasted a price of Rs. 1800.00+ in the
long term. We still stick to our forecast.
We wish investors
good luck and bumper profits for the month of Oct’05 !
The Update is late as I was not clear on the trend. Indian Stock Markets
were defying logic !
The BSE SENSEX created history today i.e. Friday, 16th Sept'05 by testing
a new life time high of 8389, just short of the magical figure of 8400!
BSE SENSEX closed today ( 16th Sept'05 ) a a new life time high of 8381 up
smartly by 7.9 % from the last update of 7767 as of 12th Aug'05. The intra
period highs and lows were 8389 and 7537.
The Indian Stock Markets foxed almost all analysts in the past two weeks
including me with a strong bull phase propelled by huge funds poured into the
Indian equities by FIIs. In the period under review ( 12th Aug to 16th Sept'05
) FIIs poured in US $ 1.0 Billion into the Indian Equities. Frontline blue chip
Stocks, mid and small cap Stocks were all on fire. Some small and mid caps
stocks zoomed to dizzy heights and were trading at P/E Multiples of 100+ to
450+. Completely crazy situation as far I am concerned. The money was shifting
back and forth from blue chips to mid/small caps and vice versa during the
period under review.
The Indian Stock Markets ignored all the negative news i.e. record high
crude oil prices, burgeoning fiscal deficit and almost complete halt in the
Reforms Process due to pressure from Left parties. This was baffling and still
the BSE SENSEX shows no signs of a major correction in the balance two weeks of
The BSE SENSEX corrected by only 300 basis points ( only 3.8 % ) from
the 7860 to 7634 level, between 18th to 29th Aug'05 inspite of the NYMEX Crude
Oil quoting above US $ 66.00 pbbl. Just for ready reference Crude Oil Futures
for Sept'05 delivery tested a whopping US $ 70.80 pbbl at NYMEX on 29th Aug'05.
This is an all time high at NYMEX since trading started in Crude Oil Futures at
NYMEX in 1988.
I had predicted a 4 to 5 % fall and further predicted that the BSE SENSEX
could fall to a very important support level of 7440, if Crude Oil prices stayed
above US $ 66+ pbbl at NYMEX. I had linked the BSE SENSEX to the Crude Oil
prices at NYMEX but the Indian Stock Markets discounted the high level of Crude
Oil prices and surged ahead in one direction - Upwards from 30th Aug'05 to today
16th Sept'05. The crude oil prices eased to levels below US 63 pbbl but then
spurted back in the second week of Sept'05 back to US $ 65+. This was totally
ignored by the Indian Stock Markets.
The BSE SENSEX charged from 30th Aug'05 level of 7745 to a whopping closing
level of today at 8381- a rise of 636 basis points i.e. 8.2 % in straight twelve
trading sessions. This is inspite of crude oil prices at NYMEX retracing to US $
This bull charge caught all most all section of traders by surprise. The
bears were trapped and they squared their position in the second week of
Sept'05. This lead to further upward movement in the BSE SENSEX.
I somehow feel this northward movement of SENSEX defied all logic ! But as
they say that in Bull Phase all the negatives are discounted as in the Bear
Phase all good news is discounted. The point of the matter is that after a very
very long time my predictions also went awry on the Indian Stock Markets.
The only silver lining was that GOLD tested a new 17 year high at COMEX
Divn. of NYMEX on 15th Sept'05 at US$ 459.50 pto. This is the highest since June
1998 at COMEX. In Jan 1980 GOLD tested a level of US $ 870 pto at LME.
I had predicted the GOLD to be a safe bet and it was bingo !
For the balance two weeks of Sept'05 I can only predict that the BSE SENSEX
may test 8500+ level . But I cannot predict with conviction at what time and
level the BSE SENSEX will correct and by how much. The reason is that the BSE
SENSEX is in "uncharted" territory.
Reputed foreign brokerage houses and analysts have been saying since the
past three to four weeks that the BSE SENSEX will correct by 1000 to 1100
points but it only corrected by 300 points and then raced to near 8400
It is worthwhile to note that BSE SENSEX marched 7000 to 8400 in just 63
trading with minor corrections. Now from march from 8400 levels to 9000 levels
could be even at a faster pace. But the fear of a huge correction is looming
large on the SENSEX. One issue is clear - The Indian Stock Markets and the
global stock markets have discounted the high crude oil prices of US $ 63 to 67+
pbbl range for the near to mid term future. This is beyond my understanding !
What about inflation in the developing countries like India ???
I suggest for the balance two weeks of Sept'05 just do not put any fresh
money into the Indian equities. Just take your profits homes if the SENSEX
rallies to 8500 to 8600+ levels.
We are studying a few stocks for short term and medium term investment for
our esteemed investors. I will advise accordingly when the BSE SENSEX corrects
or as the case maybe in the Oct'05 forecast. The earning season's results ( for
Q2 of current fiscal ) start pouring in from 10th Oct onwards. The Indian
Economy is supposed to grow at about 6.8 % this fiscal. This is the second
highest Annual GDP Growth in the world after China. The Indian Markets could be
in a further bullish mode in Oct'05 if the results from the corporates are good
We hope that in the next two weeks of Sept'05 the correction in BSE SENSEX
is mild and not 1000+ points plus as predicted by CLSA !
Stay invested in GOLD as I feel it is heading towards US $ 470 level in the
coming eight to ten weeks.
SPECIAL AUGUST UPDATE
We had predicted in the month of April'05 about Crude Oil at NYMEX for US Light
Crude Oil. We are reproducing the same for ready reference :
"If Spot Crude at
NYMEX breaches US $ 60 pbbl convincingly then expect a price of US $ 65+ pbbl in
a matter of one week or so at NYMEX. This will effect Global Stock Markets and
the Indian Stock Markets also."
WAS BINGO !!!
The NYMEX Crude Oil
closed today ( 12th Aug'05 ) at US $ 66.86 pbbl for Sept'05 delivery. Just for
information - India imports two thirds of its Crude Oil requirements. If NYMEX
Crude prices do not correct to US $ 60+ w.e.f. week starting 15th Aug'05, then
we expect the Indian Stock Markets to correct. India celebrates its Independence
Day on 15th Aug'05. It is a national holiday in India and all markets and
establishments are closed. Trading will resume on Tuesday - 16th Aug'05 in
We advise investors in
India to start exiting from equities w.e.f. 16th Aug'05, if on the prices of
Crude at NYMEX do not correct to US $ 60+ levels in the coming week. Sell all
your stock holdings even if in some stocks there is a loss. Long term investors
can sell their blue chips in the F & O segment and
cover their positions when the BSE SENSEX bottoms out. We will advise investors
when to re-enter the market. We might be entering a bear market if the crude oil
prices spiral out of control and stay at US $ 70+ at NYMEX in the coming
The BSE SENSEX closed
today - Friday 12th Aug'05 at 7767, close to 7769 as on 1st Aug'05 as per our
last update. As predicted the BSE SENSEX was bullish in Aug'05 and breached
the R2 level of 7850+. BSE SENSEX tested a life time high
of 7861 today, but could not sustain above 7850 and closed at 7767 as mentioned
We expect a four to five
percent correction in the BSE SENSEX from today's close of 7767 if the Crude Oil
prices at NYMEX do not retreat to US $ 60+ level in the week starting 15th
Aug'05. The BSE SENSEX can correct to an all important support level of 7440.
This is a very crucial level for BSE SENSEX. If this level is breached we can
expect even further correction below 7300 levels. It all depends at which level
the Crude Oil prices are going to stabalize.
We do not feel that prices
at NYMEX for Crude Oil will stablize at US $ 60+ levels in the next two/three
weeks. I predict that Crude Oil prices will be firm and will be above US $
66+ in the next three weeks.
Please sell all your Stocks
and sit on Cash or buy Gold till the Crude Oil prices correct to a level of US $
58 to 60+ at NYMEX.
The BSE SENSEX closed today i.e. 1st August'05 at a
bullish level of 7669, up 6.3 % from the close of 8th July of
7212. The intra month high and low for BSE SENSEX were 7681 and 7218.
This level of 7681 was a new life time high for BSE SENSEX and was
tested today. Today's close was also a new lifetime high close for BSE
SENSEX i.e. 7669. History was created for BSE SENSEX !
We had predicted in the last month's forecast that a level of 7500
would be breached if the BSE SENSEX closed above 7300 for three
consecutive days. Our prediction was BINGO ! Infact the SENSEX went
past this level of 7500 with ease and closed today at a life time high
of 7669 today. The SW Monsoon was very good this year and that is big
plus for FMCG , Two wheeler Companies ( Motorcycles nd Motor Cycles )
and the Agri linked Stocks. The Q1 FY'05-06 results of blue chip
companies have been good by far and in line with market expectations.
Some of the Indian Software Stocks dissappointed expectations. Another
plus for the Stock Markets was that the interest rates remained
unchanged by India'a Central Bank - The Resereve Bank of India.
The Indian Economy is estimated to grow between 6.0 to 7.0 % this
fiscal ( April'05 to March'06 ). The positive market breath for small
and midcap shares was beyond our understanding. For some of these
stocks the P/E multiples are in three figures ! This is crazy. For the
BSE SENSEX and NIFTY Stocks the P/E multiples are reasonable between 14
to 15 times their FY'06 earnings. Some established FIIs from USA, who
have been investing in the Indian Equities over the past decade feel
the valuations are stretched on the Indian Stocks as compared to Taiwan
and South Korea. They maybe right but remember that the Indian economy
is the second fastest growing economy in the world after China and
India is the largest democracy in the world. China is still a
non-democratic dragon. FIIs from Japan and Taiwan felt more comfortable
investing in India than China over the past few months. This is a big
plus for the Indian Stocks.
There is too much liquidity in the Indian Stock Markets ( largely FII
driven ). All the fundamentals and negative news was ignored for a lot
of midcap and small cap stocks. As predicted there was a minor
correction past the 7350 level. But then the BSE SENSEX pole vaulted
with ease to 7650+ levels, breaching past 7500 level. We feel the bears
are trapped in this bull market which is showing no signs of a major
correction. A few analysts and leading bear operators have been talking
of a major correction ( about 500 to 700 points in BSE SENSEX ) since
the levels of 6500 to 7000. This never happened and we feel that
the BSE SENSEX may flare upto 7850+ levels in the month of Aug'05. We
feel that the bears have still not squared their positions completely
in the Futures and Options segment ( F & O ) and are awaiting a
major correction from the current 7650+ levels. The bears are trapped
as per our understanding and the BSE SENSEX will zoom to 7850+ in
Japanese and Taiwenese funds are pouring in huge amount of US
Dollars into the Indian Equities. The Fund Managers from these
countries are buying into only blue chip large cap stocks which are in
the SENSEX and in the NIFTY. A lot of the stocks which constitute the
30 BSE SENSEX and the 50 NIFTY Index were on fire this month of
July'05. Some tested their all time life highs. Domestic MFs and FIs
were nett sellers till the BSE SENSEX was around 7350+. It seems that
Indian FIs also turned bullish when the BSE SENSEX breached past 7500
with ease. Indian Operators were focussing on buying quality midcaps
and mostly junk small caps which have little fundamentals. This is a
dangerous sign as when the markets react small investors are stuck with
these junk small cap stocks which they have to hold on for years till
the next bull run.
We feel the markets is in the hands of Bulls and a level of 7850+ for
BSE SENSEX will be tested in Aug'05. Stock Market pundits in India are
talking of a level of 8000+ in the month of August'05. As per our
predictions we feel this is possible but BSE SENSEX at 8000+ levels
will take two or three more months. We feel that the BSE SENSEX will
correct around a level of 7850+ by four to five percent. This
would be a healthy correction for the meduim to long term performance
of the Indian Stock Markets.
Total FII investment has already crossed the US $ 6.0 Billion market
till date and it is estimated that by the end of the current fiscal
total FII investment into Indian Equities might exceed US $ 10.00
Billlion. Out of this fugure about US $ 4.5 Billion maybe from new
destinations i.e. Norway, Japan and Taiwan. We tend to agree with these
figures. But we again caution small investors not to buy junk stocks in
the bull market. Control your greed and buy turnaround stocks or
fundamentally strong stocks in the midcap and small cap sectors, when
the markets correct.
We feel that investors should not put fresh funds into the Indian
Stocks at current levels and book profits slowly at all levels from
7650 to 7850+ levels. The levels to watch in the month of Aug'05 are :
R1 7750 R2 7850+
S1 7620 S2 7550 S3 7440
We feel that the BSE SENSEX find a very strong support at 7440 levels.
If it breaches 7440 levels convingly one can expect a crash to 7300
levels or even lower. Time to re-enter the markets.
We do not recommend any new stocks to be puchased at these 7650+ levels
of BSE SENSEX. We will advise a few additional stocks when the market
A brief review of our recommended stocks :
a) VSNL : This blue chip stock closed today at Rs. 420. It tested
a new 52 high of Rs. 444.00 in the month of July'05. We had recommended
this Stock at correction for buying at around Rs. 240+. The correction
came at 7350+ levels but was shortlived and not as established pundits
expected. We predicted this Stock to be Rs. 450+ in nine months in our
last month's forecast. But this stock rocketed in three weeks from Rs.
260 to Rs. 444.00 - an appreciation of 70 % in three weeks and
not nine months ! Stay invested in this stock and exit when the SENSEX
is close to 8000 and the price of about 600++. This telecom giant has
acquired two sick companies in USA in the telecom sector in July'05. It
wishes to become a global player in data and voice from India and into
b) HOCL : This PSU Chemical Stock closed today at Rs. 36.90. It tested
a new 52 week high of Rs. 45.00 in July'05. As mentioned this stock is
a turn around story. Stay invested and we stick to our prediction of
Rs. 75.00+ in three months from now.
Our old favourite HELIOS and MATH closed today at Rs. 356.00. It tested
a new 52 week high of Rs. 428.00 in the month of July'05. Please stay
invested. It will test Rs. 500 in the next three months as recommended.
SRF closed today at Rs. 284.00. It tested a new 52 week high of Rs.
307.00 in July'05. Stay invested it will test Rs. 350+ in the month of
Aug'05 or Sept'05.
A lot of blue chip stocks in the fronline and midcaps tested their new
52 week highs and/or life time highs. We track a few stocks and their
new highs are under : :
1. MNC Pharma Major - AVENTIS : 1449.00
2. Cement Major - ACC : Rs. 452.00
3. Power Equipment PSU - BHEL : Rs. 1039.00
4. Diesel Engine Major - CUMMINS : Rs. 162.00
5) MNC Tyre Major - GOODYEAR : Rs. 98.00
6) ICICI Bank : Rs. 550.00
7) Cigarette, Hotels and FMCG Stock - ITC : 1775.00
8) EPC Major - L & T : Rs. 1308.00
9) FMCG Major - NESTLE : Rs. 800.00
10) EPC Major - NAGARJUNA CONSTNS. : Rs. 900.00
11) LNG Gas Major - PERONET : Rs. 57.00
12) TEXTILE Major - RAYMOND : Rs. 375.00
13) PETROCHEM Major - RELIANCE - Rs. 711.00
14) RELIANCE CAP - Rs. 460.00
15) TEA Major -TATA TEA : 690.00
16) WATCHES and JEWELLERY Co.- TITAN : Rs. 551.00
17) WIRE ROPES Co. - USHA MARTIN : Rs. 118.00
18) AYURVEDIC MED. Co.- KERALA AYUR : Rs. 41.00
There were about forty to fifty additional stocks other than the above which have tested new highs.
In the Indian Stock Markets we feel that one will have to be vey stock
specfic to make money in the medium to long term. The multi-baggers
have to be spotted in the Midcap and Smallcap sectors. We will
recommend additional stocks in the due course of time. We are studying
a few stocks !
In the meanwhile book profits till 7850+ level and sit on cash.
The BSE SENSEX closed today Friday 8th July'05 at a bullish level of
7212 up 6.3 % from June 10th closing level of 6782. The intra month
high and low were a whopping 7306 and 6757. The BSE SENSEX made history
by testing a life time high of 7309 and a life time high closing of
7288 during the month. A good monsoon, amicable settlement of family
dispute amongst the biggest private sector company in India - RELIANCE
Group and heavy FII inflows from Japan and Taiwan rallied heavy buying
of front line and midcap stocks on the Indian bourses.
BSE SENSEX breached the S1 level of 6840 and could not breach 6730 (
S2). In fact it rallied from thereon past 6955 (R2) and all important
level of 7000 with relative ease. The BSE SENSEX was ignoring
fundamentals on account of high crude oil prices. There was so much
momentum in the SENSEX Stocks that the BSE SENSEX tested a new all time
high of 7309 on 5th July'05 and closed at an all time high of 7288 on
Japanese and Taiwanese are new FIIs who have turned to India. These
FIIs have raised India Specific Funds and were buyers of all front line
and blue chip stocks. Few of the SENSEX and blue chip stocks hit new 52
week or life time highs during this month. The FII investment in Indian
Equities in 2004 calendar year was US $ 8.5 Billion. Till 30th June'05
i.e. six calendar months - FIIs had already pumped in US $ 4.5 Billion
into Indian Equities. The analysts feel that in 2005 calendar year -
FIIs may pump in funds in excess of US $ 9.0 Billion. Japanese FIIs
have plans to pump in a total of US $ 4.0 Billion into Indian Equities.
Japanese FIIs are shifting their funds
from China to Indian Equities. This is a good sign for the Indian
Markets and feather in the cap for the Indian Economy which is expected
to grow at 6.0 to 7.0 % this fiscal.
The Indian Stock Markets were choppy but with a firm bullish undertone.
There was a sharp correction before the London Blasts which we strongly
condemn. The BSE SENSEX recovered smartly after the crash on 7th
July'05 due to the terrorist attacks in London. The Indian Stock
Markets were liquidity driven and were ignoring high crude oil prices
in early June'05. In some midcap and small cap stocks even the
fundamentals were being ignored. This is what we fear the most - Herd
Mentality in Indian Stock Markets. Most of the midcap and small cap
stocks were on fire without any fundamentals to back them. Just pure
momentum. But when a sharp correction occurs - small and greedy
investors are left with these penny stocks in their hands.
This has happened with investors many times in history but they never
seem to understand or learn from history. Greed never dies as they say
in Las Vegas ! We have been cautioning our esteemed investors that they
should stay away from these stocks. Invest in fundamentally strong
midcaps and small caps with an actual growth, turn around or
merger/acquisition story. Do not be lured into momentum stocks in these
categories as when the market corrects you have no exit route. I would
like to quote legendary investor and my idol - Mr. Warren Buffet. "
PRICE IS WHAT YOU PAY AND VALUE IS WHAT YOU GET ". These are golden
words from this legendary investor from USA.
Judge stocks by their intrinsic value in addition to the fundamentals.
Technicals are also misleading sometimes e.g. the liquidity driven
rally as in Indian Stocks as above. The BSE SENSEX shot past all
important 7000 mark with ease. We had predicted a resistance at 7000
level for BSE SENSEX. In fact after testing 6900 it just shot past 7000
with ease due to excess liquidity provided by FIIs. Indian domestic
Mutual Funds and FIs were sellers in the market. But the appetite was
more than supply !
Here is a list of some star performers with new 52 week highs or new
life time highs :
i) ONGC - Life time high of Rs.1033.
ii) L & T - Life time high of Rs.1231.
iii) ITC - Life time high of Rs. 1709.
iv) COLGATE - New 52 week high of Rs. 257.
v) RELIANCE CAPITAL - New life time high of Rs. 426.
vi) RELIANCE ENERGY - New 52 week high of Rs. 706.
vi) SRF - Life time high of Rs. 242.
vii ) HELIOS and MATH - Life time high of Rs. 355.
viii) TITAN - Life time high of Rs. 455.
ix) TATA TEA - New 52 week high of Rs. 645.
The list is quite long ...... !
We expect the BSE SENSEX to be bullish for the balance three weeks of
July'05. Since the BSE SENSEX is in un-charted range it is very
difficult to predict the new high. We predict that BSE SENSEX will test
a new life time high of 7500 by 31st July !
The levels to watch are :
S1 7000 S2 6900 S3 6840 S4 6750
R1 7300 R2 7420 R3 7500
If the BSE SENSEX can close for three consecutive days above the level
of 7300 then it will hit 7500 in a matter of a week. The only spoil
sport could be Crude Oil prices. Crude should stay below US $ 60.00
pbbl at NYMEX during the next three weeks or so. If this happens I am
pretty sure we are heading towards 7500 levels for BSE SENSEX.
Expect a sharp correction anywhere from 7350+ levels. I would advise
investors to book profits on stocks where they are sitting on profits
and take cash out. Sit on cash for the correction to happen. At say
6840 or start buying blue chips again.
We have shortlisted the following new stocks which we recommend entry
at say 6840 or lower BSE SENSEX :
a) VSNL : A telecom major from the TATA Group. It's 52 week high and
lows are 281 and 157. It closed today at Rs. 266. At correction buy it
at around Rs. 240+. We expect this stock to be Rs. 450+ in nine
months from now.
b) HOCL : This is PSU Stock which makes Chemicals. This is a turn
around story. It's 52 week high and low are Rs. 35.00 and Rs.13.00. It
closed today at Rs. 31.25. Buy at around Rs. 27.00. We expect this
stock to be Rs. 75.00+ in nine months from now. This is our
multi-bagger for 2005.
We predict our old favourite HELIOS and MATH to test Rs. 500 in
the next nine months or so. It closed today at Rs. 340. Remember we
recommended this midcap software niche player at Rs. 80 in the month of
Jan'05. We had first predicted a level of Rs. 180+. Then we revised the
target to Rs. 240+ in March'05. Now well known brokerage houses are
expecting this stock to test Rs. 400 in the long term. We picked this
gem much ahead of the pundits !
We are revising our target for SRF to Rs. 350+ in the next six months
or so. It closed today at Rs. 242 - a new life time high. The Stock is
being re-rated by on account of much higher expected earnings in the
next two quarters. This nylon cord manufacturer also manufactures
refrigerant gases and is phasing out manufacture of CTC. As per
Montreal Protocol for green house gases production cuts, this midcap
company will be a beneficiary of extra funds from the Government of
India. This is why a leading FII was chasing this stock from Rs. 60+ !
We spotted this star at Rs. 90.
We once again would like to caution our small investors not to invest
money in penny stocks because of greed that these stocks give quick and
multiple returns. Stay away from these penny stocks (with no
fundamentals) as when there is sharp reaction, there is no exit route.
Investors are again advised book profits all levels above 7300+ on
stocks where they are making profits. Do not buy fresh stocks at these
levels of 7200+. Sit on cash and re-enter as explained above.
Happy investing or rather profit booking !
update is delayed as we were not clear on the trend
since the past six to eight weeks. In addition SW Monsoon is supposed
to hit India in the first week of June. The same was delayed by a week.
The BSE SENSEX closed today - Friday,10th June'05 at a bullish level of
6782 up 10.2 % from 18th April'05 close of 6156. The intra period high
and low for the BSE SENSEX was 6884 and 6121. The BSE SENSEX was not
able to reach 6955 and fell short by 72 points. On the flip side the
SENSEX could not test the 6070/6000 levels. This level of 6956 is all
the time high for BSE SENSEX. If the SW Monsoon is normal - we predict
that BSE SENSEX will breach 6956 and may even test all important mark
of 7000 !
During the period the Small Caps and Mid Cap Stocks were on fire. The
BSE Mid Cap Index was on fire and hit an all time high. We focus on
front line stocks but will now onwards will have to focuss on the
quality Mid Cap Stocks and Small Cap Stocks. The prime reason is that
FIIs and Indian Institutional Investors are also concentrating on
select Mid Cap Stocks. This sector has outperformed the BSE SENSEX in
the recent six months or so. We are also going to focus on " turn
around stocks " where we see a great potential. We will research as a
few good companies in the Small Cap Sector too where we see there is a
good return on investment.
We would like to caution our Investors that most of the Small Caps
Stocks are moving only on momentum and they have no fundamentals to
back them. Please be very cautious as when the markets correct sharply,
the invetors will have no exit route to sell these stocks as there is
very limited liquidity in these Small Cap Stocks.
Similar is the case with some of the Mid Cap Stocks. Only a few of
these Stocks are potential winners. Rest are all moving up with the
bullish momentum in the Stock Markets. Please be selective to pick
Stocks in this lucrative Mid Cap Sector as this is the Sector where
most of the action has been for the past few months. We will also focus
in this Sector now and recommend some stocks.
We predict the BSE SENSEX to be bullish till end June'05. There could
be a sharp correction in the BSE SENSEX but we feel that should be a
'buying oppurtunity'. The levels to watch for the next two weeks are :
S1 6840 S2 6730 S3 6640 S4 6520
R1 6900 R2 6955 R3 7000
Investors are advised to book profits when the SENSEX rallies past 6900
levels and sit on cash. We will advise re-entry with specfic stocks at
the opputune time.
We had recommended some stocks in April'05. A brief analysis
a) SRF : It tested Rs.183 during the period in consideration. We had
set a target of Rs. 120 but this Stock leaped to Rs. 180+. A leading
FII is chasing this stock. We hope investors booked profits at the
b) COLGATE : It tested Rs. 244 against our prediction of Rs. 220. New
product launches in the Indian Market from this Oral Care major are the
reason for the stock being bullish.
c) ITC : This was bingo ! It went beyond Rs. 1500+ and tested an life
time high of Rs. 1615. The company announced a stock split and issue of
'bonus shares' for the investors.
d) GUJRAT AMBUJA CEMENT : The Stock tested Rs. 458 during the period
but rewarded investors with issue of 'bonus shares' with
50 % shares as a 'free bonus'.
e) RANBAXY : We were very close on our prediction. The stock test Rs.
848 an then went upto Rs. 1102. It fell short of our prediction of Rs.
1200. We predict this stock will test Rs. 1200 by end
We are studying a few stocks in the Mid Cap Sector and in the Small Cap
Sector which are based on fundamentals and have the potential to be
multi-baggers for the 2005-06. We are also studying a few shares in the
front line blue chip sector which will give at least 50 % return in the
next nine months or so. We will recommend these stocks in our update
for July'05 as per schedule. By this time we will be clear about the
progress of SW Monsoon also, which has a big impact on the Indian
Economy. Indian Economy still gets its
25 % GDP from Agriculture and this sector is dependent on natural rains.
We repeat - we advise investors to book profits in whatever stocks they
are holding at all levels above 6900+
Happy Investing !
MID APRIL UPDATE
The BSE SENSEX closed
today - 18th
April'05 at a whopping low of 6156, down 6.8 % from the April
level of 6604. We had predicted that the BSE SENSEX could rally to 6900
levels but it could not breach 6650 levels even. From this level it
crashed in two weeks to a intra day low of 6118 today. It however
closed today at 6156, as mentioned above.
We had predicted on the
flop side that
BSE SENSEX could test 6000 level in April'05 and that at around this
level investors should buy into three new stocks - McDOWELL, GUJRAT
AMBUJA CEMENT and GE SHIPPING.
We advise investors to
exit from Steel
and other Non-Ferrous Metals Stocks. There is a considerable downside
from today's levels.
We feel that BSE SENSEX
will test a
level close to 6000 within the month of April'05 and
to recommend a few additional Stocks to be bought between 6070 to 6000
levels or as advised hereunder :
d) SRF : This
manufacturer is a hot buy at around Rs. 90 with a stop loss of Rs.
80. We expect it to test Rs. 120 when the BSE SENSEX pulls
This is a pure 'trading call'. Exit at around Rs. 120 levels.
e) COLGATE : This FMCG
Major is also a pure 'trading call'. Buy at
186 with a stop loss of Rs. 180. Exit at around
Rs. 220 on the
pull back rally.
The following are
over the medium term :
g) TATA POWER : Buy this
at Rs. 330 and hold for the medium term. Expect a 30 % return over the
next three to four months. We expect a price of around Rs. 420
h) AVENTIS PHARMA : Buy
Pharma at around Rs. 1320+ and hold for the next three to four months.
We expect this Stock to test Rs.1500+ levels.
i) RANBAXY : Domestic
are in heavy correction mode. Buy this Stock at around Rs. 850+ levels
when the BSE SENSEX tanks and hold for the medium term. We expect this
domestic pharma major to bounce back to Rs.1200 levels again.
j) ITC : This
Cigarettes to Paper
to Hotels to FMCG Major is a hot buy at around Rs. 1325. We expect a
price of Rs. 1500+ in the medium term.
The Forecast is
delayed by a
couple of days as we were watching Crude Oil Futures at NYMEX for US
The BSE SENSEX closed
4th April'05 at 6604 down 3.6 % from the close of 11th March'05 level
of 6854, as of our last update. The intra period high and lows were
6882 and a scary low of 6321.
We had predicted a sharp
the BSE SENSEX but the correction was much sharper than our
prediction. We had predicted that S2 level of 6550 will be tested but
the BSE SENSEX sank to a level of 6320. The main reason was expiry of F
& O Contracts on 28th March'05. The roll-over
and the BSE SENSEX recovered smartly from the level of 6320 in a matter
of days. Very choppy Stock Markets in India !
We feel that BSE SENSEX
strongly in the coming three to six weeks and investors should
this rally to exit from the Equities as explained later in this update.
This rally would be purely technical pullback as per the Charts. The
BSE SENSEX will drop sharply after this technical rally.
The levels to watch for
BSE SENSEX for
April'05 are as follows :
S1 6550 S2 6320 S3 6070
R1 6640 R2 6730 R3 6840
The S4 level as above is
the 200 DMA
for BSE SENSEX and is the long term support level. This level
not be tested in April'05.
On the Charts BSE SENSEX
appears to be
breaching R4 level of all time BSE SENSEX high
6955. If Crude Oil prices dip below US
$ 54 temporarily we
might see BSE SENSEX at an all time high in end April'05 end or in
early May'05. Yearly results for the last fiscal will also
pouring in after Mid April'05. Metals, Cement,
Construction, Oil & Gas and Telecom
supposed to come out with good results. Select IT Majors and MNC Pharma
companies will also come out with some exciting numbers for the last
fiscal which ened on 31st March'05. Just a reminder for our global
readers - In India the financial year is from 1st April to 31st
Oil Prices are a major
cause of worry
for the Markets. US Light Crude Futures at NYMEX tested US $
58.28 pbbl for May'05 delivery and 60.05 for Sept'05 delivery
4th April'05. We had predicted this level of US $ 60.00+ for
Light Crude in our last month's forecast.
God has been kind to me for Crude Oil predictions over the past few
years ! Goldman Sachs is predicting a level of US $ 80 to 100
for US Light Crude in this calendar year.We feel this level is
unrealistic and may not be achieved. Equity Markets will be bearish
worldwide if Spot Crude at NYMEX stays above US $ 60++ till Sept'05. If
Spot Crude at NYMEX breaches US $ 60 pbbl convincingly then expect a
price of US $ 65+ pbbl in a matter of one week or so at NYMEX. This
will effect Global Stock Markets and the Indian Stock Markets
Another specific concern
Indian Stock Markets is the FIIs allocation for the Emerging Markets.
There are rumours that emerging markets might get less allocation of
funds due to interest rate hike in USA and slowdown of the said markets
due to higher Crude Oil prices. We feel that INDIA is a shining star in
Asia and will continue to attract FII funds as per last
fiscal's levels if not more.
ONGC tested a
new 52 week high of
Rs. 1000 and so did IT Major TCS at Rs. 1475 during the period under
review as per above dates.
We advise investors to
exit from the
Indian Equity Markets at levels close to 6900+ and have only one Stock
in the Portfolio till the BSE SENSEX reacts to near 6000 levels. This
one Stock is ONGC.
For the rest of the long
term Stocks -
Investors can book profits at the above said 6900+ levels and sit on
cash to re-enter at around 6000 level in the coming six
weeks.Investors can also go short at 6900+ levels in the F
We fancy the following
new Stocks at
BSE SENSEX of around 6000 :
a) Spirits Major -
McDOWELL : It
closed toady at Rs. 259. This Stock we had recommended a few year's
back at around Rs. 50 and had predicted a price of Rs. 150. We advised
investors to exit at Rs. 150. The 52 week high and low are Rs. 264 and
42 respectively. This Stock can zoom to Rs. 500+ in the next
months or so as it has successfully bid to acquire M/s. SHAW WALLACE
& Co. - Its nearest competitor.
Major - GUJRAT AMBUJA
CEMENT : It closed today at Rs. 424. The 52 week high and low
this stock are Rs. 469 and Rs. 250. This will give a 30 to 40 % return
in the long term
c) Shipping Major - GE
SHIPPING : It
closed today at Rs. 164. The 52 week highs and low are Rs. 200 and Rs.
84 respectively. We expect a price of Rs. 220 in the long term.
Investors are ahead of
choopy times in
April'05. Please exit or book profits if BSE SENSEX rallies
sharply and then sit on cash to
re-enter at around 6000
The Update for the month
is delayed on account of the following reasons :
a) The Union
Budget is announced
on 28th of Febraury every year by the Indian Finance Minister. The
Budget was very well perceived by the Stock Markets. The
has implication on the Indian Stock Markets although the
weaning away as India is now a 'Market Economy' under WTO
b) It takes a week or so
the fine prints of the Budget. Details of the proposed Finance Bill for
the next fiscal are available on Finance Ministry's Website. In brief -
The Budget set Indian Stock Markets on Fire !
c) The trend was not
clear as Indian
Stock Markets were touching dizzy heights and valuations were being
stretched to unrealistic limits.
We apologize for this
ten days delay
in the March'05 Update.
The BSE SENSEX closed
today - Friday
11th March'05 at a level of 6854, up smartly ( 4.5 % ) from
close of 31st Jan'05 level of 6556. We had predicted in the
update that the BSE SENSEX could test 6800++ in Feb'05. We were very
The BSE SENSEX created
testing an all time high of 6955 ( short of magical figure of 7000 !!!
) on 9th March'05 and created yet another landmark a day earlier when
the BSE SENSEX closed at an all time high of 6915. The intra period (
1st Feb'05 to 11th March'05 ) high and low for the BSE SENSEX
- 6955 and 6501 respectively.
The Indian Stock Markets
liquidity driven as FIIs till date in this calendar year have pumped in
close to US $ 3.0 Billion in the Indian Equities. Banks are sitting on
IPO Funds. MFs are also sitting on cash.
The focus has been on a
front line Stocks but primarily on the Mid -Cap Stocks in
Infrastructure, PSU Banks, Auto and Auto Ancilliary, Metal -
both Ferrous and Non-Ferrous.
The only laggards were
because of the weak US Dollar.
The disturbing factor is that penny stocks
fundamentls ar also galloping ! Please stay away from these Stocks.
We feel that the BSE
SENSEX is in for
a sharp correction from the current levels ( 6850 ) but the
undertone would be sideways for the next two weeks or so. The
levels to watch till 31st March are :
R1 6950 R2 7000
S1 6720 S2 6550
We feel the BSE SENSEX
will test 6720
for sure and if the FIIs are inactive for the next two weeks or so -
then investors should be prepared to see a level of 6550. No need to
panic. Time to pick up some fundamental Stocks in EPC
Infrastructure, Steel, Cement and Shipping, which we will advise as the
A brief synopsis of our
1. ARVIND MILLS : It
closed toady at
Rs. 125. Exit from this Stock completely. The Textile Story has
turned into a Chinese Dragon. Post MFN Era - China is
Indian Textile Export Majors a tough time.
2. CUMMINS INDIA : It
closed toady at
Rs. 123.20. Tested a new 52 week high of Rs. 139.00. Stay Invested. We
stick to our target of Rs. 240.00 in a year's time.
3. TIMKEN INDIA : It
closed today at
Rs. 96.10. It tested a new 52 week high of Rs. 104. Stay invested and
exit around Rs. 120.
4. MRPL : It
closed today at Rs.
51.00. Stay invested. This will give multiple returns in this calendar
year. We feel it will declare it's maiden dividend by Dec'05. Markets
discount the future and we expect this stock to be around Rs. 100 in
the next six months or so.
5. PETRONET LNG
: It closed today
at Rs. 44.70. Stay invested for handsome and multiple gains.
is the Stock for the next fiscal. It has already moved up by 100 %
since we recommended at Rs. 21 a few months back.
6. TCS : It tested a new
52 week high
Rs. 1435 today. Stay invested. Target - Rs. 1800+ as mentioned earlier.
7. UTI BANK :
The Banking Sector
Stocks have been on fire on account of Reforms announced in this Sector
in the Budget. It closed tody at Rs. 261. It tested a new 52 week high
of Rs. 264 during the period under review. Stay invested as we stick to
our revised target of Rs. 300++ in the next three to four months after
its maiden GDR Listing at NYSE.
Almost all fundamentally
Bank and Private Bank Shares have tested new 52 week highs during the
period under review.
HELIOS & MATHEWSON
: It closed today at Rs. 169. It tested our targetted figure
Rs. 180, as a new 52 week high during the period under reveiw. Bingo !
Book partial profits. Balance exit at Rs. 240+ in the coming weeks.
8. L & T
: It closed today at
a bullish level of 1092. It tested a new 52 week high of Rs. 1148. Book
partial profits at Rs. 1200+. Balance keep for long term. This Stock
can be Rs. 1800++ in the next nine to twelve months if the FIIs are
bullish on India and the Indian Govt. keeps the Infrastructure as a
We did not recommed
Infrastructure EPC Stocks - GAMMON INDIA, HCC, IVRCL and UNITECH. These
stocks have also given 100 % returns from the time we
L & T post its Cement De-Merger. Investors can buy any
these four Stocks if the BSE SENSEX gives a sharp reaction till 6550
levels. We feel the valuations are a bit stretched but then in a bull
fundamentlly sound EPC Infrastructure Stocks
Steel Stocks are having dream runs. Infrastructure Growth -
Roads, Bridges etc. are need of the hour for the Indian Economy which
is poised to grow at the rate 7.0% next fiscal.
9. ONGC : Our
old favourite Stock
is again in the limelight due to high Oil prices. It closed today at a
new 52 week high of Rs. 940. We feel this Stock has further
potential as we feel that Crude Oil prices will not soften in
next six to nine months.
Do not be surprised if
US Light Crude
at NYMEX tests US $ 60+ in the next few months This
cause some panic in the global markets and also Indian Stock Markets.
We feel ONG could be Rs.
1800++ in the
next twelve months. Investors can buy on a reaction at say around
We are not
recommending any new
Stocks at these levels. If the BSE SENSEX falls to 6550 levels
will submit a Special Update to buy Trading Stocks in Steel,
Shipping and Cement Sector.
The BSE SENSEX closed today
i.e. 31st Jan'05 at 6556 down
marginally from end Dec'04 close of 6603 . The BSE
SENSEX tested an all time high of 6696 on 4th
intra month high and low for the BSE SENSEX for the month of
Jan'05 were 6696 and 6070 respectively.
The BSE SENSEX was bullish in Jan'05 as predicted but could not breach
past 6700 level as forecasted. It fell short of 4 points !
The FIIs have been net
sellers of Indian Equities in the month of
Jan'05. The BSE SENSEX pulled up smartly in the last week of Jan'05 as
the Q3 results of a majority of blue chips were
Secondly the Government of India made a very important announcement in
the last week of Jan'05, that Non-Govt Provident Funds,
Superannuation Funds and Gratuity Funds can invest w.e.f. 1st
April 2005 - 5% of their corpus into Indian Equities and 10 %
Equities of Mutual Funds. This was a landmark announcement and injected
adrenaline into the Indian Stock Markets. Analysts were talking of BSE
SENSEX breaching 6000 levels but with this announcement the BSE
SENSEX turned bullish and jumped from a level of 6100 to 6565
four trading sessions.
We continue to be bullish
for the month of Feb'05 and predict
that BSE SENSEX will breach past 6700 level in Feb'05. We feel that BSE
SENSEX may test 6800++ level in Feb'05.
We advise investors as below
on some of our recommended Stocks
1. PETRONET LNG :
This closed today at Rs. 44.30 up
smartly ( 41 % ) from Rs. 31.35 as of Dec'04 closing. It tested a new
52 week high of Rs. 49.00 in Jan'05. Sell 50 % of holding at around Rs.
60.00. Balance 50 % stay invested. The company is now
months in operations and is performing well. This will be
multi-bagger of 2005-06 as mentioned earlier.
2. TCS : This Indian Software major closed today at Rs. 1300. It
tested a new 52 week high of Rs. 1368 in Jan'05.
invested. Target price of 1800++ in calendar 2005.
3. CUMMINS INDIA : It closed today at Rs. 127.00 marginally up
compared to its close as of end Dec'04 close of Rs. 125.00. The company
has declared good Q3 results, which can be read on the
website. Stay invested. The company is launching
range of Engines in the CNG Category. We are revising the target price
from Rs. 180.00 to Rs. 240.00++ for this blue chip MNC Stock.
There are talks that the Asia Pacfic Rim ( APR) countries will
supplied Engines from CUMMINS INDIA. This will the Asian hub for
exports to the APR countries.
4. UTI BANK : It closed today at Rs. 206.00 up
its Dec'04 close of Rs.185.00. Tested a new
52 week high
of Rs. 210.00. Posted excellent results for Q3. Target price
revised to Rs. 300.00++. Stay invested.
For the rest of our recommended stocks please follow the
as in the Jan'05 forecast.
The Indian Stock Markets are in firm grip of bulls, for the
four weeks ahead of the Union Budget. The Finance Minister
announces the Budget for the next fiscal ( 1.4.2005 to 31.3.2006 ) on
28th Feb'05 as is the tradition for decades. We feel that till 28th
Feb'05 the BSE SENSEX will be bullish and may even test 6800+
levels. Cheers !
We are studying three
additional Stocks - McDOWELL, SHAW WALLACE
and NTPC. We will put a Special Update, if necessary in Feb'05
<>The BSE SENSEX closed today i.e. 31st Dec'04
at an all
of 6603. The BSE SENSEX tested an all time high of 6617 on
Dec'04. The BSE SENSEX created another history today by closing at a
level above 6600 i.e. at 6603. Up smartly 5.9 % from the
close of 6234. The intra month high and low for the month of Dec'04
were 6617 and 6221.
The BSE SENSEX was bullish in Dec'04 as predicted. The SENSEX breached
the all important level of 6250 level easily. FIIs were very
aggressive buyers of Indian Equities. FIIs pumped in around US $ 2.10
Billion into Indian Equities in the month of Dec'04. In the calender
year 2003 - FIIs pumped in US $ 6.59 Billion into Indian Equities. In
the calendar 2004 FIIs pumped in US $ 8.51 Billion.
We had predicted that if FIIs
continue to invest in Indian
Equities in Dec'04 also as they have been doing in the
year 2004 till Nov'04 - then BSE SENSEX would breach past the level of
6250. FIIs pumped in US $ 2.1 Billion in Dec'04 in Indian Equities and
closed the calender year with record
FIIs were very aggressive
Buyer's into the blue
chip Stocks with focus on Metals ( both Ferrous and
Non-Ferrous ) , Infrastructure and selective IT Sector in
Dec'04. Selective Mid Cap Stocks with good fundamentals also
participated in the bull rally and are racing towards the next step in
the ladder - large cap stocks.
The BSE SENSEX is now in 'uncharted territory' as
no historical data to co-relate and analyse the same. The
all time level of BSE SENSEX - 6250 was breached in
a fair margin.
The BSE SENSEX could test any
level in the months to
come. The analysts in India are talking about a level of 7200+
the next three to six months on the bull side. We tend to
with these analysts and feel that even this level of 7200 will be
breached if the Monsoon Rains in June'05 are normal. One could see a
BSE SENSEX above 8000 levels by Sept'05, if monsoon rains are normal or
are above normal in India in 2005. On the downside the analysts are
talking about a level of 5400 or so in the next three to six
months. We also feel that BSE SENSEX would stablize at around
For the month of Jan'05 we
continue to be bullish with SENSEX
breaching past 6700 level. No new stocks are being
recommended as of now. We advise investors as below on our recommended
1. HELIOS and MATHEWSON : It
closed today Rs. 84.00. We
advise Investors to stay invested. We stick to our target price of Rs.
2. MRPL : This is our multi-bagger of 2004-05. It closed today at Rs.
54.30. Up smartly ( 20 % ) from Rs. 45.00 as of close of
Nov'04. Stay invested. We stick to our price of Rs. 100.00++.
3. ARVIND MILLS : This Textile major closed today at Rs. 132.30 up
smartly ( up 16 % ) from Rs. 114.00 as of close of
It tested a new 52 week high of Rs. 133.00 in Dec'04. Stay invested. We
stick to our target price of Rs. 250.00.
4. GTN TEXTILES : This Cotton Yarn major closed today at Rs. 73.15. It
tested a new 52 week high of Rs. 80.00 in Dec'04. We
hope investors exited this stock at Rs. 80.00 as advised in
month's forecast. Our prediction was again bingo !
5. PETRONET LNG : This closed today at Rs. 31.35 up smartly ( 33 % )
from Rs. 23.40 as of Nov'04 closing. It tested a new 52 week high of
Rs. 33.00 in Dec'04. Stay invested. This will be multi-bagger of
6. TCS : This Indian Software major closed today at its new 52 week
high of Rs. 1338.00 up 4% from Nov'04 close of
Stay invested. This is a Stock for every Indian Investor's Portfolio.
7. L & T : This Engineering Major closed today at Rs. 982.00 up
from its Nov'04 close of Rs. 912.00. It tested a new 52 week high of
Rs. 1021.00 in Dec'04. Book partial profits at Rs. 1200+.
We had recommended a few
additional Stocks :
1. TIMKEN INDIA
: It closed today at Rs. 70.55
marginally up from Nov'04 close of Rs.69.00. Stay
Target price is Rs. 120+ in the next six months.
2. CUMMINS INDIA : It closed today at Rs. 122.40 marginally
than it's Nov'04 close of Rs. 125.00. Stay
price Rs. 180+
3. UTI BANK : It closed today at Rs. 185.00 up smartly from
Nov'04 close of Rs.166.00. Stay
invested. Target price
could be Rs. 250 to Rs. 300.
4. STANDARD INDUSTRIES : It closed today at Rs. 19.60 marginally up
from Rs. Rs. 19.40 as the closing price as on Nov'04. Stay
invested. EXIT from this Stock at Rs. 35.00 to 38.00
The Indian Stock Markets are in firm grip of bulls. Happy Investing in
Indian Stocks !
BSE SENSEX closed today i.e. 30th Nov'04 at an all time
of 6234. The BSE SENSEX on 9th Jan'04 tested an all time high of
but closed at 6199. The BSE SENSEX created history today by closing at
very bullish level of 6234. Up smartly 5.8 % from the Nov'04
of 5891. The intra month high and low for the month of Nov'04 were 6248
5878. The BSE SENSEX just fell short of testing the all time high of
as on 9th Jan'04.
The BSE SENSEX was bullish in Nov'04 as predicted. The SENSEX breached
6000 level easily. It also broke all important level of 6150 in Nov'04.
were very aggressive buyers of Indian Equities. FIIs pumped in around
$ 1.2 Billion into Indian Equities in the month of Nov'04. In the
year 2003 - FIIs pumped in US $ 6.59 Billion into Indian Equities. In
calendar 2004 till 30th Nov'04, FIIs have already pumped in approx US
Billion. It is expected that in calendar 2004 - this figure might be
to US $ 8.0 Billion. In other words analysts feel that in the month of
- FIIs will pump in US $ 1.0 Billion into Indian Equities. If this
then the BSE SENSEX will easily go past the all time high of 6249.50
will enter into ' Unchartered Territory '.
FIIs were very aggressive Buyer's into the front line IT Sector,
Auto Component Sector Stocks in Nov'04. Indian Operators were very
in the Mid Cap Stocks. Mid Cap Stocks are having a dream run but some
these Stocks are not based on fundamentals. Investors have already been
not to invest into Mid Cap Stocks without checking the fundamentals.
We feel the BSE SENSEX will be in a bullish mode in Dec'04. The levels
watch are :
S1 6150 S2 6000 S3 5880
R1 6250 R2
Beyond 6250 the BSE SENSEX could be heading anywhere. It could test
to 6700 levels in the next few months to come. This depends primarily
on the FII activity. FIIs have favoured Indian Equities ahead of China
Brazil. If FIIs pump in another US $ 1.0 Billion in Dec'04 as
by the analysts then we can see a level of 6400+ in Dec'04 itself. We
that BSE SENSEX will give a sharp 200+ point reaction after crossing
levels. At this reaction we recommend investment into four new Stocks.
We are recommending four additional Stocks to be bought for medium to
term horizon ( 3 to 6 months ) as below :
1. TIMKEN INDIA : It is a leading manufacturer of Taper Roller Bearings
is a Indian Subsidiary of Automotive/Railways Bearing Giant - TIMKEN
of USA. It closed today i.e. 30th Nov'04 at Rs.69.00. Its 52 week high
low are Rs. 87.00 and Rs. 33.00. Keep a buying target figure of Rs. 60
62. Target price Rs. 120+
2. CUMMINS INDIA : It is a leading manufacturer of Diesel Engines in
both for Automotive and Stationary use. This company too is now an
subsidiary of CUMMINS Inc. USA - a global giant in Diesel Engines. It
today at Rs. 125.00. It's 52 week high and low are Rs.135.00 and Rs.
respectively. Keep a buying target price of Rs. 118 to 120. Target
3. UTI BANK : We did not recommend any Banking Stocks over the past two
as we were worried about the high level of NPAs. This Banking Stock
today at Rs. Rs.166.00. It's 52 week high and low are Rs. 179.00 and
Keep a buying target of Rs. 145 to 150. This Bank could be a " Takeover
". Investors are advised to keep watchful eye on this Stock as regards
volumes traded on the BSE or NSE. If the Stock is traded heavily -
is some action in the Stock. Target price could be Rs. 250 to Rs. 300.
4. STANDARD INDUSTRIES : This is an old Textiles Stock and closed today
Rs. Rs. 19.40. Buy this Stock at market prices - say Rs. 20.00 to 21.50
feel this Stock will be Rs. 40.00++ in a matter of three months. Post
QUOTA Dismantling from Jan'05 onwards - this Stock will see a frenzied
EXIT from this Stock at Rs. 40.00.
We had recommended some Stocks in Oct'04. A brief synopsis
1. HELIOS and MATHEWSON : This Software Stock tested a level of Rs.
on a cum-bonus basis. We hope investors booked partial profits. Anyway
closed today ex-bonus level at Rs. 88.00. We advise Investors to stay
We stick to our target price of Rs. 180.00++
2. MRPL : This is our multi-bagger of 2004-05. It closed today at Rs.
Stay invested. We stick to our price of Rs. 100.00++.
3. ARVIND MILLS : This Textile major closed today at Rs. 114.00 up
from Rs. 84.00 as of 4th Oct'04. It tested a new 52 week high of Rs.
in Nov'04. Stay invested. We stick to our target price of Rs. 250.00.
4. GTN TEXTILES : This Cotton Yarn major closed today at Rs. 72.00 (
52 week high ) up smartly from Rs. 53.00 as of 4th Oct'04. Exit at Rs.
5. PETRONET LNG : This closed at Rs. 23.40 marginally down from Rs.
as of 4th Oct'04. Stay invested. This will be multi-bagger of 2005-06.
6. TCS : This Indian Software major closed at its new 52 week high of
1287.00 up smartly from 1081.00 as of 4th Oct'04. Stay invested. This
a Stock for every Indian Investor's Portfolio. Stay invested.
7. L & T : This Engineering Major closed today at its new 52
of Rs. 912.00 p smartly from Rs. 874.00 of 4th Oct'04. This is a Stock
every Indian Investor's Portfolio. Stay invested till further advise.
In August 2002 we had recommended LIQUOR and SPIRITS Stock -
at a level of Rs. 45.00. We had predicted that this Stock will be Rs.
in about one year's time. We were off by 12 months or so. McDOWELL
today at Rs. 124.00 but tested a 52 week high of Rs. 136.00 in Nov'04.
Stock will be Rs.150.00+ in the very near future. Investors who hold
Stock are advised to completely exit from this Stock at around Rs.
Some Market Pundits were making a laughing stock of our prediction in
2002 about this Stock. These guys called me a few days back and were
about the bull run in the Stock. God has been kind !
We predict Stocks in our own queer ways and most of the time our long
predictions have been 'Bulls Eye'. We again repeat Investors who have
holding capacity for medium to long term and who follow our timely
directions, will for sure make big bucks in the Indian Stocks.
The Indian Stock Markets are in for a big Bull Run in the coming months
all the negative news is being discounted. Happy Investing in Indian
information above is provided by the source indicated and presented by
the Astrologers Fund Inc. Neither the Astrologers Fund Inc. nor the
source guarantee that the information supplied is accurate, complete or
timely, or make any warranties with regard to the results obtained from
its use. The Astrologers Fund does not guarantee the suitability or
potential value of any particular investment or information source.
Remember always to check with your licensed financial planner or broker
before acting. This is just the starting point of your research and you
must carefully investigate before you buy/or sell.