Market Comments - Reliance Petroleum's Day Out

Markets moved up smartly yesterday but based on the positions markets had to give up the gains as it was the settlement day in F & O yesterday.

However if there was one stock which hogged the limelight, it was RPL. As I was expecting it to explode any time, it did in style in the last hour. This was presumably because of huge short covering which came at the last minute. Today we will have new series beginning in F & O and so we should see smart rally in the counter till 250 before consolidation. DO NOT worry about short term movements but try to make some free stocks where ever possible. I certainly see RPL around 1000 Rs in next 2 years.

RPL reminds me of the quote that I like " When you do not see Stars in the sky, it does not mean that they have disappeared forever, it is only a matter of time before the clouds move away and you see the stars twinkle again".

One more stock which I consider as a litmus test for myself is Teledata. The listing is expected in another 10 days and so I expect the demerged entities will give a value of around 90 Rs which means a return of 50% in near term. Even if it does not happen, I am sure the combined entities will fetch 200 Rs worth in one year. Teledata Marine solutions will lead the pack as it will be given higher PE ( atleast 5) and it is expected to grow at good pace. Watch out for the listings in December.

Markets should start fresh rally in December series but we will see markets moving between 18 K and 20 K for some time as we had moved up way ahead of time. However stock specific activity will continue.

Market Comments - Bears Trapped

Market opened up smartly yesterday but due to heavy positions that were built in F & O, bulls had to give up the gains and there was a huge rush to square off the positions which led to market ending up in red. However it will now be Bulls turn and we will see a big rally once again.

Infosys moved up 5% in Nasdaq yesterday which means we will see some rally here. It seems that there are lot of shorts built in Infosys and if this happens, today we will see some huge covering and we can see Infy rally smartly.

There were queries regarding Burnpur Cement IPO and based on current grey market premium which is quoting around 8 to 10 Rs, the IPO looks attractive. The issue size is also good and so one may get good allotment in Retail part. If you have enough money to put in IPO, then apply for this IPO. Minimum allotment will be 500 shares which means profit of around 5000 Rs on listing.

Today IDBI, IDFC, GMR Infra, NTPC should rise smartly in Futures due to short covering.

Market Comments - Its Bulls turn now

Markets corrected yesterday due to weak global cues but if you see the amount of correction, it clearly showed that Bulls were in control not letting market fall.

US markets rallied smartly yesterday and hence we will see a very good opening and then there will be the usual volatility before we see good closing. We should see 6000 on Nifty by Thursday if all goes well.

Tech Stocks are taking a beating but as I mentioned it is good to time to add Stocks like Infy and TCS to your portfolio. However the rupee appreciation effect is still there and hence add theses shares only as part of your free shares and wait for 2 to 3 years.

GMR Infra is buzzing on stake sale at 280 Rs to QIP and hence it moved up smartly even though it was in F & O ban. All depends on the positions during settlement time.

I will write more about Reliance Petro only after it crosses 300. When SBI was 1000, many analysts downgraded it to 600 levels but where are the so called analysts now? SBI moved up smartly to cross 2K. Same will happen with Reliance Petro. Imagine why will any one buy 18 crore shares at 223 Rs when there is no value in it. Rest is your call.

Minda Industries is being accumulated and should move up smartly to 300 Rs in one month's time.

IDBI will move smartly to 200 Rs in quick time as NSE is likely to offload some more of its stake and IDBI has stake of NSE and also IDBI has stake in Mundra SEZ and hence it should move smartly to above 170 levels today and then closer to 200 levels.

Market Comments - Volatile Markets

Markets may be volatile for the next few days but one requires patience and careful selection of stocks to make money in this market. Those who are long term investors can just buy the required stocks and then forget about the market till the desired time.

Those who are looking for short term gains as well as long term investment must be watching the markets carefully to make money and then ensure that more shares are added to the zero cost portfolio.

Reliance Petro opened up smartly but then there was again huge interest for this counter and it crossed 95% limit again. Bears sensed this and hence there were lot of shorts in this counter. I believe this will explode any time but when is the big question? It will be very soon.

With petrol prices increasing one stock which is going to make news is Minda Industries which manufactures LPG kits for maruti. It is currently at 247 and it should cross 300 in quick time. I believe it should touch 500 in one year as there is going to be heavy demand for gas kits in future.

Mundra SEZ port lists today and it should list around 1000 to 1200. Those who want to invest for long term and did not buy in IPO can go for it and start accumulating if it dips.

Teledata Informatics is likely to list around December 10th and the other two demerged entities around December 26th.

My stock picks link.
http://indianstockmarketscomment.blogspot.com/2007/10/comments-on-current-stock-picks.html

Monday Morning Market Musing - Settlement Time

Markets will be volatile this week but I believe bulls will have an upper hand unless we see very bad global cues. I think we should test 6000 on Nifty Once again though it is my guess but volatility is going to be there for sure.

Reliance Petro is out of F & O ban and watch the action in this counter now. GMR Infra will be subdued because of F & O curb but since this will be for few days we should see action in this counter once the placement news on this comes out today.

IFCI will move once again towards 95 and then book profits again.

Reliance Petro Out of F & O Ban

Reliance Petro has come down below 80% of the F & O Limit and is out of Ban for November Series. Interestingly, Reliance has made 4% stake sale ( 18 Crore Shares) of Reliance Petro on Friday, for a sum of 4023 crores rupees to Institutional investors which works out to 223 Rs per share.

I had said in my comments on Friday to watch out for RPL in coming days as it was about to get out of F & O ban. Now see where the stock opens on Monday and how it zooms......

GMR Infra is now in F & O ban and so the stock should be subdued till it comes out of the F & O ban or till the December series starts on Friday.

Market Comments - Its Bulls turn now

There are few investors whose nature always puzzles me. They wait for market to correct before they would like to buy and when markets correct, they fear to buy because markets can go down even further. They will not be able to buy anything. When markets rise sharply they keep waiting for markets to fall and this repeats again.

Markets took a U-Turn yesterday evening and since this is a long weekend in US, we do not have any global cues to handle with. Markets should open with a bang today and we should a smart rally unless market players have something else in their mind which is very unlikely.

Once markets open smartly, bears will have to come and cover their positions as even tomorrow we will see the run as there will not be any bad global cues to handle with.

Reliance petro is close to getting the ban lifted and it should move up smartly. Just watch RPL in the next few days.

GMR Infra will make smart moves again today and we should it on track to 300.

Powergrid, PTC, NTPC will dazzle again. Reliance Industries, DLF will also make smart moves.

IDBI, SBI will continue their march.

IFCI will move again quickly to 95 plus levels. One more opportunity for you to make some more free shares.

Enjoy the rally!!!!!!!!

Market Comments - Another Opportunity

Markets have gone down as expected. This was inevitable as I had been mentioning that we were overvalued and markets need some correction. We will see this happening for some time till we move to 21K.

Markets will correct today also but we should see some bottom around 18K or close to 17,500 in the worst case. I believe we may test the bottom soon and sharp rally will resume again.

Reliance Petro is one stock which will rise sharply and I believe it will give excellent returns in one month and it can even touch 300 Rs giving 50% returns in one month. This is one stock which is resilient even in falling market due to the reason that there are many shorts in this counter and so it can explode any moment.

Teledata Informatics will list around December 3rd and the other demerged entities should be listed by end of December.

GMR Infra touched 250 and corrected yesterday but we will see sharp rise once the market stabilises.

IFCI has crossed 95 to go till 105 and then now back to 85. This type of opportunities keep coming in IFCI and so buy now again around 80 levels to sell at 95.

Nagarjuna Fertilisers and Arvind Mills my stock recos in Speculation list have already hit the required targets.

Market Comments - Weak global cues

We had another day of weak global cues and our markets would also react negatively to the global cues on opening today and then there will be some volatility before we see some negative closing.

GMR Infra crossed 250 and next target is 300 Rs by December End. There is speculation in market that GMR Infra has reportedly bagged an airport contract in Europe.

Reliance Petro is going down because of consolidation and also oil prices retreating back. This stock will now be tracked on Oil prices and may move down to 180 levels on the downside but 400 Rs target in next one to two months is not ruled out as there is reportedly a stake sale happening around 350 Rs similar to GMR Infra at 250.

IFCI has moved smartly amid speculation of banking licence in the market but as usual book profits around 100 Rs and make some shares free of cost. It will give another opportunity at 80 levels.

PTC has already doubled from my recommended levels in less than 3 months and NTPC should cross 300 anytime after market stabilises.

Monday Morning Market Musing - Fear and Greed

Good morning to all my readers. It is Monday Morning and time to put on thinking cap. There has been lot of inflows in the last few months and with this the bulls were creating new records and sensex was moving from one milestone to another.

This has bought in new expectations from the investors and they are so high, it is akin to asking Yuvaraj to hitting six sixes an over every time he comes in to bat. Investors now want 50% to 100% returns in less than a month. Is this possible ? No.....It is expecting very high returns in quick time. Normally if you get a return of anything above 20% in a year, it is considered as good returns in stock market since we get less than 10% in an FD.

However there have been many stocks in the past few months which have given more than 50% returns in less than 2 months and some even 100% returns. I had infact given 100% returns as target for one year but they were achieved in a month.

Now investors are caught in two minds, Fear and Greed. They fear that stocks might go down and would like to sell but at the same time they do not want to sell because there is further scope for increase in price.

The best thing to do is keep booking profits after certain levels and also make free shares ie zero cost price and forget them. In this way you need not worry and you can forget the two factors fear and greed. When to exit a stock is difficult to stay but the best thing is to set some target and book profits and then leave some shares free of cost. Always get back your capital at any time and play with free shares.

US Markets tanked on Friday again and we may see some more weakness in our markets this week. Time to buy my stocks at lower levels as you will see another upmove after consolidation.

Market Comments - Consolidation Phase

Markets Consolidated yesterday and there will be some more consolidation before the uptrend resumes. GMR Infra moved up smartly as it was out of F & O curb and is now moving towards 250 mark. GMR Infra has been my favorite pick and though it had not performed when market moved close to 21K earlier, it has picked up offlate.

From 150 levels it has moved to 225 levels giving returns of 50% in less than 2 months time. There is lot more to come in this stock as Stake sale is likely to happen at 250 Rs which means target of 400 is not ruled out in this stock by next year.

Reliance Industries is going to perform well and my target will be 4000 in next 6 months.

Reliance Petro will fire the moment it is out of F & O curb and it should reach 300 in a jiffy. At present consolidation is going on.

IFCI moved up smartly and as I said many times it keeps moving between 80 to 95. Anything below 80 you buy and anything close to 95 or above you sell. Keep making free shares in this with above ups and downs.

IDBI, ICICI and SBI are three banking stocks which will give you good returns in next one year.

DLF is going to move to around 1600 which is my revised target from earlier target of 1200 in one year.

Opportunities will keep coming in this market and so keep visiting my blog for more info.

I hope all my blog readers are having happy time in investing in my picks.

Market Comments - Bulls Create History

As I had mentioned in my comments on Wednesday that we were close to bottom and Bulls were ready to take charge and even a small rally in US markets would make the markets rally in a big way here. US Markets closed up in a big way on Wednesday and so we had a record rally yesterday.

We will see some consolidation today and an attempt to move to 21K. It will be interesting to see how soon we can reach 21K. However it is not so easy to get to that mark. I hope bulls prove me wrong.

Reliance has moved up smartly and raring to go. There is news that Reliance may go for stock split after it crosses 3000 and ex stock split it may give value upto 4000.

Reliance Petro is unable to move due to the huge positions built in F & O and unless it comes out of the F & O curb or short covering takes place, it may not move. However I still believe it has potential to cross 300 by December End.

GMR Infra is also in F & O curb but as per sources there is some placement likely to happen at 250 Rs per share which means GMR can cross 250 very soon. More information will be known after 26th November on this.

Teledata is going to ex-demerger tomorrow and even conservative estimates suggest that the demerger value should be around 90 to 100 Rs for the three entities combined. The only thing required is patience in this counter.

Nagarajuna Fertilisers moved up smartly and it should now move towards 80 levels.

IDBI and SBI willl give good returns and still have lot of potential. Stay invested for one year to get returns in these.

Powerstocks have flared up considerably and still have some potential to go till REL IPO goes through.

ICICI Bank was another bank stock which I recommended and it has started moving up smartly.

My stock picks link.

http://indianstockmarketscomment.blogspot.com/2007/10/comments-on-current-stock-picks.html

I will add some more stock recos soon.

Market Comments - Bulls in Full Flow

Sorry for the late update but there is not much to write today. As I had written in my comments yesterday, US markets moved up smartly on good earning news and so here our markets raced up on opening. This was what I was mentioning and so all stocks should move up smartly.

Teledata moved up smartly yesterday and today also it should close around 72 levels and tomorrow it should touch 80. I hope this happens but even if this does not happen, nothing to worry on this. You will get good value after demerger.

I hope every one of you is enjoying the ride. Catch you tomorrow with more news....

PE Ratio - How prices are effected?

Many investors go by the EPS and PE ratio for a particular stock but sometimes things can drastically wrong or there can be surprising rewards in this.

Take the example of Infosys. Infosys was the favorite stock in IT pack even till 9 months back. Infosys had an EPS around 90 in FY06 and there was also a bonus of 1:1 and Infy moved to 3500 cum bonus commanding a PE of 40 on FY06 earnings.

In FY07 the EPS was 136 or ex-bonus it was 68. But the rupee effect started showing some effect and the PE ratio was now 34 only. Infy moved to a maximum price of 2400 Rs.

When the rupee started sliding further and Infy gave conservative guidance of 80 we are now seeing the stock at 1600 levels which means the PE ratio has come to 20. If only the rupee had not depreciated Infy should have ideally been around 2700 Rs to 3000 Rs.

This is how a small change in PE ratio can effect the share price of even a blue chip company.

Take another example of Reliance Industries. Reliance used to command a PE of 10 till 2004 and when the EPS was 60 Rs stock was quoting around 600 Rs or something like this.

It all changed in 2005 after the demerger. PE ratio of Reliance started increasing and now with annual EPS expected around 100, Reliance is close to commanding 30 PE.

Reliance Petro EPS is not known but only we have few analysts estimates. It was expected to be 5 but with increasing oil prices I believe this can be even 10 in the first year. Giving a PE ratio of 50, Reliance Petro can move up to 500 Rs by end of FY09 but market tends to give more PE for stocks and sometimes it can even be 100 also which means Reliance Petro can move upto 1000 Rs by FY09. This is based on presumption that oil prices will keep moving up and stay around $100 atleast. What happens if they drop back to 70 levels? Markets will then give less PE ratio and even say 30 PE and price can come down to 300 Rs from 1000 Rs. This is how PE ratio can effect stock price.

Consider an interesting scenario for Infosys. If govt is forced to increase petrol prices and if petrol prices move up by 6 Rs atleast then inflation will increase and rupee will start downward trend and dollar moves up. If rupee touches 42 to 43 level again, Market will give higher PE valuation to Infy and in Fy09 if Infy can clock an EPS of 100 and PE ratio is 30 then the price can be 3000 Rs. That is almost double from current levels. But the million dollar question is....when will the rupee go down? Any guesses ???????????

Market Comments - Close to Bottom

I believe we have seen good amount of correction and yesterdays rally was because of frentic short covering by bears. US markets corrected yesterday but it was not a huge one and every respite in US markets will give good opportunity for our markets to rally. The day US markets close in positive, we will see a huge rally and when there is correction, we may see a pause.

Markets have corrected significantly and hence the bubble phenomenon is now gone which is good for the health of the market. We will however see the swings between 17 K to 20K and it will take significant time before we see 21K. However specific stocks will keep moving.

Power Stocks have moved up and NTPC sparkled well. I had recommended IFCI, NTPC, Relpetro for futures trade this month and IFCI profit booking was done around 95. RPL sparkled to 290 and NTPC now at 257. I will keep giving few stocks for trading in F & O so that those who can trade in F & O with good amount of money can do their trades.

Teledata has corrected with market and it may go down to 55 levels also but of late it has bounced back from 58 levels to 63. DO NOT worry about the price now and be patient. It will fetch the desired results.

IFCI sale stake may be delayed is the news and hence it will be in the 75 to 95 range for some more time.

I will try to post the PE ratio post today.

Monday Morning Market Musing - Weak Global Cues

I hope every one of you had a good Diwali though markets did not sparkle on Diwali Muhurat trade. This was the first muhurat trade in last seven years where markets closed in negative.

This was precisely due to the reason that Markets had run up too fast. If you my remember my comments earlier, I was mentioning how markets were running ahead of fundamentals and so correction was imminent. The much desired correction is happening now and we may see some more downside before we resume the rally again. The reversal will be sharp and fast like it happened at 13500.

Focus on specific stocks and buy. GMR infra finally crossed 200 and I am happy that it has crossed this resitant figure of 200 and now we should see 250 as the next target once market reverses. We may see some stocks move up eventhough markets are in negative and Reliance Petro could be one stock where the run up will be huge. Please see my another post which I will be postigng seperately which will explain how quickly valuations can change a stock price.

It will be interesting to see how Teledata price will be in the correction mode as the ex-date for teledata demerger is on Friday. There is nothing to worry about Teledata as I know the value for the shares after demerger will be much more than the current value and so there is no need for panic to sell Teledata. It is a safe bet in this falling market.

Buy in this market as per your comfort levels and wait for the reversal. Opportunities keep coming. It is for you to utilise them.

Market Comments - Global Melt Down

US markets tanked yesterday and there is a sell off in Asian Markets today. Our markets will also open weak and there will be volatility again in our markets today. We may see below 19K today and this should trigger some panic in the market after a long time.

Forget about sensex and keep adding my stocks as per your comfort. Oil prices are close to $100 and this can increase further. There were a few Analysts who say that Reliance Petro can touch 1000 Rs in next 2 years based on the expected increase in oil prices. Though the valuations are expensive, considering the fact that RPL will start operations atleast 6 months before the original completion date of December 2008, it should have good earnings in the first year. I had expected an EPS of 5 in the first year for RPL but this can now be even 15 based on the oil prices and in the next year it can even go to 30. 1000 Rs for RPL is surprising but the way oil prices are moving up, it should not be impossible for this stock.

RPL had reached the limit in F & O for this month and hence there was a big sell of in this counter. This is the first time a NIFTY constituent has touched the market wide limit. However we should see good buying opportunity in this stock if you have long term vision.

IFCI will still remain in the same range till the bidding news is out but if you try to stay put in this counter with your free stocks, you can get 400 to 500 Rs in next 2 years.

IDBI, SBI are still on course and they should give decent returns in next one year.

PTC and NTPC are good bets in power sector and powergrid also is one of the good stocks to buy in the correction mode though it refuses to come down much.

Infosys is close to the bottom and so is TCS. Try to accumulate these two at lower levels for a quick rebound. However try to put your profits in the IT stocks as the rupee effect is still going to have effect on IT stocks. If you are a long term investor with 3 to 4 years vision, then buy and forget these.

"I wish all my readers a HAPPY AND PROSPEROUS DIWALI".

I hope many of my stock recos will give 100% returns in one year and my pick of the year will be TELEDATA and I hope to see a 300% return in this by NEXT Diwali.

Market Comments - Buying Opportunity

Markets are correcting because of profit booking but this was bound to happen as the run up was sharp and 20K is a big hurdle to cross.



This is another buying opportunity and so add value picks at every dip. Teledata dividend has been deferred and I feel it is good because there could have been legal hurdles with the dividend declaration. Dividend will act as another trigger after the demerger and I see teledata should touch atleast 80 Rs by 15th November and the demerged entities should give good value and the combined value will be 100 Rs after the listing.



There is nothing to worry but pick value stocks at every dip and wait for the reversal.

Market Comments - Nothing to Worry

I was busy with my scheduled work and so could not post my 4M post yesterday. Markets corrected as 20K seems to be a difficult mark to close above and also US economy worries are lingering now but I feel lot of money will flow to India for investments and we will see reversal very soon.

Last time from 13500 markets appreciated by 50% and now we may not see that deep correction but try to accumulate my recommended stocks at every level. See the link below for my stock picks.

There is speculation of Reliance going for stock split from 10 Rs to 2 Rs once it crosses 3000 Rs and so try to buy at dips so that you get good appreciation post stock split.

GMR infra has started moving up slowly and we may see it cross 200 after market stabilises.


Stock picks link :
http://indianstockmarketscomment.blogspot.com/2007/10/comments-on-current-stock-picks.html

Market Comments - Volatile Markets

Markets rallied smartly yesterday in the morning as expected but as I was saying that it was like playing musical chairs and so some one decided to stop the music abruptly. Profit booking started and though there was some recovery, panic was evident in the market as correction started. 20K is being like a tough point for the market to close.

US markets tanked yesterday as further rate cut seemed unlikely and also economy slowing down. Our markets will react to this news but once we see good correction, rally should resume again. This should provide good opportunity to buy again.

IFCI tanked again to 80 levels after reaching 95 and again a good chance to buy now. I am sure one will get another 3 to 4 opportunities like this.

Focus on specific stocks and buy accordingly in the correction mode.

Market Comments - FED cuts to boost Markets

FED has cut interest rates in US and this will boost our markets today. We may now see 21k at the current frenzied pace as at present all fundamentals are being set aside and markets are moving up like anything. Interest rate cut in US would further boost inflows here which means we will see further up move for market.

Religare IPO is good but since the issue size is small it will get oversubcribed heavily. Apply for this IPO only if you are sitting on huge cash as the allotment chances will be very less. It was oversubscribed 13 times in retail part yesterday and so on last day it should get oversubscribed nearly around 80 times or more.

Barak Valley Cement is also small issue and allotment chances will be less as this should also be subscribed around 25 times. Invest only if you are sitting on huge cash or you would like to take a chance with allotment.

We should see rally in stocks now like Reliance ind, Reliance Capital, Reliance Energy, RNRL, SBI, IDBI, IFCI, GMR Infra, DLF, Unitech and all my recommended stocks but we are in a situation of musical chairs and the music is now playing. When the music will stop is a big question which is difficult to answer at present. Any way I will be there to let you know before the music stops. Till then play on !!!!!!!!