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9am with Emkay |
n Dealer Comments
The markets started the day’s session on a positive note with almost 70 odd point’s upward gap tracking firm cues from the global markets particularly the Asian markets. Post firm opening markets just kept inching northwards after several days of lacklustre trading aided by an all round buying in stocks across the board. Today markets were chirping with a lot of action after witnessing comatose state since the beginning of the Christmas season. Today banking stocks saw some really good buying interest in late trades and buying may continue for couple of days from FII’s on the back of probably NAV propping for the year end and anticipation of good Q3 results. Besides buying in metal, fmcg, auto and select telecom stocks led the days rally. Even rollover of existing positions of the December derivatives series played a part in the rally. Finally the markets snapped its losing streak and closed the day on a positive note towards the end at almost day’s highs with Sensex gaining 231 points or 1.15% higher to settle at 20256 levels while Nifty gained 64 points or 1.07% higher to settle at 6060 levels. The overall market breadth indicating the strength of the market was positive as broader markets witnessed subdued buying action with Midcap index and Smallcap index gaining almost 0.80% each and was at almost 1.8 x. The overall traded volumes were quite higher compared to the earlier day by almost 29% and were at Rs 1375 bn. While delivery based volumes were also higher compared to the earlier day at 41.9% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 0.96 bn on 28th December 2010. While on 29th December 2010 FII’s were net buyers to the tune of Rs 5.47 bn in the cash segment while in the F&O segment FII’s were net buyers to the tune of Rs 20.61 bn while Domestic Funds were also net sellers to the tune of Rs 1.70 bn.
n Technical Comments
Up-move resumes after a breather
Nifty settled above 6046 level and thus continue to maintain its streak of rising highs and rising lows. Moreover, the ADX on hourly chart has also begun to strengthen indicating that the current up-move is gaining strength. The key pivot going forward is the previous swing high of 6069.45, the clearance of which will clearly confirm the Dow theory’s buy signal (i.e. higher top higher bottom signal) on daily chart. Hence we still maintain our bullish view.
BSE FMCG:
BSE FMCG has managed to surpass the resistance of 50-DSMA on closing basis and hence in the coming session it can rise upto 3750 level.
United Phosphorus Company Update; MAI deal signifies investment opportunity in UPL; Buy; Target: Rs 230
n ChemChina has proposed to acquire MAI (a leading global generic crop protection company) at US$ 2.4 bn
n The deal signifies investment opportunity in UPL since UPL’s current valuations at EV/EBITDA of 6x are at 40% discount to proposed deal’s valuations
n UPL’s management may lower its guidance for FY11 by ~20% which poses near term risk to the stock
n Despite near term risks, we believe that investors can buy this stock at current levels with 18 months target of Rs 230
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