Buy : Fedders Lloyd Corp

Investors with a short-term trading perspective can buy Fedders Lloyd Corporation at current level. Short-term trend in the stock is bullish. It has been moving up vertically without any correction since October 6. Momentum indicators in the daily chart have moved in to the overbought region but there is no sign of weakness yet. The stock closed above the immediate resistance at Rs 69 on Monday implying that the vertical climb can extend. Investors can buy the stock with a stop at Rs 68. The uptrend is expected to take the stock to the target of Rs 82 in the short-term.

Sell : Tata Power Company

We recommend a sell in the stock of Tata Power Company from a short-term perspective. It is evident from the charts of the stock that its intermediate-term uptrend that commenced in March low of Rs 602 was arrested at Rs 1,487 in late October. The stock has a significant long-term resistance in the band between Rs 1,450 and Rs 1,500 level. Triggered by the negative divergence in the weekly relative strength index and moving average convergence and divergence indicator the stock reversed its direction. Since late October, it has been on a short-term downtrend. On October 30, the counter tumbled 4 per cent penetrating its intermediate-term up trendline. Moreover, it declined 4 per cent with good volume on November 6, reinforcing the downtrend. The stock is trading well below its 21- and 50-day moving averages. The daily momentum indicator has entered the bearish zone. Our short-term outlook on the stock is bearish. We anticipate its decline to continue until it hits our price target of Rs 1,145. Traders with a short-term perception can sell the stock while maintaining stop-loss at Rs 1335.

Buy : Bharat Forge

We recommend a buy in Bharat Forge stock from a short-term perspective. It is perceptible from the charts of the stock that after recording a multi-year low of Rs 69 in January, it began to trend upwards. Since then it has been on an intermediate-term uptrend, forming higher peaks and troughs. While trending up, the stock conclusively broke through key resistance levels at Rs 195 and Rs 240 which subsequently turned in to key support levels. Following a short-term pull-back from Rs 307, the stock found support around Rs 240 and resumed its uptrend. On November 4, the stock gained 7 per cent with above average volume, reinforcing the uptrend. The daily relative strength index (RSI) bounced up from 40 level and is heading towards the bullish zone. Moreover, weekly RSI has entering in to the bullish zone. Our short-term forecast for the stock is bullish. We anticipate it to rally further until it hits our price target of Rs 293 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining stop-loss at Rs 252.

Today's Pick

Recommendation: Buy

Last Close: Rs 243

Last Close: Rs 270/80

Stop Loss: Rs 218

GE Shipping has a very good support around Rs 220-25 levels; these levels would act as support if the stock corrects from current levels. Keep stop loss below Rs 218 for a possible target of Rs 270/80.

Recommendation: Buy

Last Close: Rs 47.70

Last Close: Rs 52

Stop Loss: Rs 45

Truck major Ashok Leyland is in uptrend in the short-term period; the stock is moving up with good volume and has very good support around Rs 45. Keep stop loss below Rs 45 for a possible target of Rs 52/53.

Recommendation: Sell

Last Close: Rs 288

Last Close: Rs 260

Stop Loss: Rs 300

HCL Tech has hit high of Rs 352 and then started moving down after making lower top of Rs 335. Currently trading below Rs 297, it can lead to further downside up to Rs 260. Keep stop loss above Rs 300 for a possible target of Rs 260.

Recommendation: Buy

Last Close: Rs 544

Last Close: Rs 605

Stop Loss: Rs 518

Divi’s Labs has very good support at Rs 518-30; these levels would act as support if the stock corrects from current levels. Keep stop loss below Rs 518. It has a resistance at Rs 570 at which upgrade trailing stop loss to Rs 540.

Recommendation: Buy

Last Close: Rs 700

Last Close: Rs 740

Stop Loss: Rs 680

FMCG major Colgate-Palmolive is in uptrend for short term and is moving up with good volume. The stock has a very good support around Rs 680. Keep stop loss below Rs 680 for a possible target of Rs 740.

GMR Infrastructure : Buy

We recommend a buy in GMR Infrastructure from a short-term perspective. It is apparent from the charts the stock has been on a long-term uptrend from its October 2008 low of Rs 22.75. However, after encountering resistance around Rs 90 in June it was on a medium-term decline till the July support level at Rs 60. With in the long-term uptrend, the stock has been consolidating sideways in the range of Rs 60 and Rs 75 since July. The key support at Rs 60 along with the positive divergence in the daily relative strength index (RSI) backed the stock’s 7 per cent jump on November 4. The daily RSI is on the verge of entering the neutral region from the bearish zone and the weekly RSI is hovering over the neutral region. Considering that the stock’s long-term uptrend-line is in tact we are bullish on it from a short-term perspective. We expect the stock to move up until it hits our price target Rs 69.5. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 60.

JSW Steel : Sell

We recommend a sell in the stock of JSW Steel from a short-term horizon. It is evident from the charts that the stock’s intermediate-term rally from March low of Rs 161 had ended in late October high of Rs 935. Triggered by the negative divergence displayed in the daily relative strength index, the stock changed its trend. It has been on a short-term downtrend since October high. While declining, the stock breached it 21-day and 50-day moving average as well as intermediate-term uptrend-line. On November 3, the stock plummeted 10 per cent breaking through its significant long-term support level of Rs 700. The daily RSI is featuring in the bearish zone and weekly RSI is falling in the neutral region towards this zone. Moreover, the daily moving average convergence and divergence indicator has entered the negative territory. Our short-term outlook on the stock is bearish. We anticipate it to tumble until it hits our price target of Rs 610. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 715.

Sell : Reliance Power

We recommend a sell in the stock of Reliance Power from a short-term perspective. It is apparent from the charts that the stock was on an intermediate-term uptrend from March low of Rs 89 to its June high of Rs 210. Triggered by negative divergence and presence of significant long-term resistance around Rs 200, the stock resumed its long-term downtrend which has been in place since February 2008 high of Rs 374. Moreover, since June it has been on an intermediate-term downt rend. In early October, the stock breached its 21-day and 50-day moving averages and is hovering way below them. Both the daily relative strength index (RSI) and moving average convergence and divergence (MACD) indicators are featuring in the bearish territory. The weekly indicators are on the verge of entering in to the bearish territory. Our short-term forecast on the stock is bearish. We expect the stock’s downtrend to prolong until it hits our price target of Rs 124 in the approaching trading sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 146.

State Bank of India Q2 net up 10.2 pc

The bank, which along with its associates controls almost a quarter of Indian bank loans and deposits, said on Saturday its July-September net profit rose to Rs 24.9 billion($530.2 million) from 22.6 billion rupees a year earlier.

That met a poll of brokers who forecast a profit of Rs 24.6 billion for the period.

Closest rival ICICI Bank said on Friday its quarterly net profit rose 2.6 per cent, beating forecasts.

Shares in State Bank, valued at $31.5 billion, rose 26 percent in July-September, beating a 20 per cent rise in the sector index and an 18 per cent gain on the benchmark index.

Sell : Canara Bank

We recommend a sell in the stock of Canara Bank from a short-term perspective. It is evident from the charts the stock has been on an intermediate-term uptrend from its March low of Rs 144. However, the stock’s medium-term uptrend that commenced from August low of Rs 252 accelerated and the stock encountered resistance at Rs 395 in the second week of October. Subsequently, the stock reversed direction triggered by the negative divergence displayed in the daily relative strength index (RSI) and the momentum indicator hitting over-bought territory. On October 27, the stock tumbled 6 per cent breaching the 21-day moving average and reinforcing the short-term downtrend. The daily RSI has slipped in to the neutral region from the bullish zone and weekly RSI is on the verge on slipping. Besides, the daily moving average convergence and divergence has signalled a sell. We are bearish on the stock from a short-term perspective. We anticipate it to dive until it hits our price target of Rs 305. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 356.

Mid-term picks

BUY

MARKET PRICE: Rs 2,203

TARGET PRICE: Rs 2,900

On the back of strong profitability in 2QFY09 and 1QFY10, SBI had raised NPA provisions. Strong traction in fee income is likely to continue in 2QFY10. In 1QFY10, fee income grew 45% y-o-y. Trading profits will remain strong in 2QFY10, non-interest income growth of is seen at around 30% y-o-y.

BUY

MARKET PRICE: Rs 296

TARGET PRICE: Rs 360

Over the past three years, Cipla has invested around Rs 2,000 crore in manufacturing assets. The company has made aggressive plans to expand its manufacturing capacities. In the US, Cipla has entered into partnership for 118 products with 21 partners. Its number of partners have increased to 21.

BUY

MARKET PRICE: Rs 48

TARGET PRICE: Rs 65

During 2QFY10, GVK Power has witnessed momentum in terms of domestic passenger traffic at Mumbai airport (up 10% y-o-y) and higher operating rates for power projects (at 85%+). We expect earnings for GVK to grow at a compounded annual rate of 80% over FY09-11.

BUY

MARKET PRICE: Rs 283

TARGET PRICE: Rs 384

Birla Corp’s second quarter operational performance was better than estimated with reported revenue of Rs 530 crore (up 38% y-o-y) and profit of Rs 150 crore (up 155% y-o-y). Higher realisations and stable cost led to highest ever EBITDA margins at 38.3% (730 basis point y-o-y improvement).

BUY

MARKET PRICE: Rs 276

TARGET PRICE: Rs 375

Sesa Goa has raised $500 million through FCCB, the proceeds of which will be used to finance the company’s growth plans. During September 2009, iron-ore imports increased by about 30% month-on-month to 64.55 million tonnes. It is likely to benefit from strong prices and volume growth in 2HFY10.

Sell : Reliance Natural Resources Ltd

We recommend a sell in the stock of Reliance Natural Resources Ltd from a short-term perspective. It was on a medium-term uptrend from March low of Rs 34 to its June high of Rs 112. However, the stock reversed direction after encountering significant resistance around Rs 110 in mid-June. Since then the stock has been on a medium-term downtrend. This downtrend got reinforced as the stock failed to breakthrough the resistance Rs 90 after multiple attempts and continued to decline. On October 26, the stock tumbled 5 per cent penetrating 21- and 50-day moving averages. With this the daily relative strength index (RSI) has entered the bearish zone and the weekly RSI is slipping in the neutral region towards this zone. The daily moving average convergence and divergence indicator has signalled a sell and is on the verge of entering the negative territory. Our short-term outlook is bearish. We expect the stock’s decline to continue until it hits our price target of Rs 72. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 84.5.

Maruti Q2 net up 99.3%, sees FY10 capex at Rs 2,100 cr

Maruti Suzuki has come out with its second quarter FY10 results. Its net profit shot up 99.3% to Rs 570 crore versus Rs 286 crore, on year-on-year basis (YoY).

The company's net sales increased 45.94% to Rs 7,049 crore as against Rs 4,830 crore (YoY).

The topline as well as the bottomline numbers were below expectations. CNBC-TV18 was expecting net profit at Rs 597 crore and net sales at Rs 7,091 crore.

Raw material cost went up 46.9% to Rs 5,255 crore versus Rs 3,578 crore (YoY).

In a press conference, Maruti said buoyant exports helped strong growth in second quarter. However, the company said they would be cautiously optimistic on volumes in near future and margins will be seen under pressure going forward. "High commodity prices and strong Yen will tighten margins."

The company's Q2 domestic passenger car market share stood at 54.9%, it added.

Maruti Says

-Development of new models on track
-Concerned that input costs could go up
-Target 1.3 lakh units exports in FY10
-Remain watchful of interest rates, inflation
-Domestic demand broadly good
-See good market potential for CNG vehicles
-Expect higher steel prices in October-March
-FY10 capex seen at Rs 2,100 crore
-FY11 capex seen around Rs 2,000 cr
-Company has cash reserves of Rs 5,300 cr
-Not sure strong demand to continue after October

Buy : Wanbury

We recommend a buy in Wanbury from a short-term horizon. The stock has been on an intermediate-term uptrend, forming higher peaks and higher troughs, since March low of Rs 24. Following a corrective decline from August high of Rs 96, the stock found twin support around Rs 65. Subsequently the resumed the uptrend. It is trading well above 21-day and 50-day moving averages. On October 23, the stock gained 5 per cent. The daily relative strength index has entered the bullish zone and weekly RSI is also featuring in this zone. Daily and weekly moving average convergence and divergence indicators are in the positive territory. Considering that the stock’s intermediate-term uptrend-line is intact, we are bullish on a short-term perspective. We expect it to hit our price target of Rs 91. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 79.

Govt plans 20% stake sale in SAIL this fiscal

The government on Wednesday said the disinvestment process in steel giant SAIL will start in the current fiscal.
"The first phase of disinvestment will happen in the current fiscal," Steel Minister Virbhadra Singh said in New Delhi after a conference wherein trading firm MSTC presented a dividend of Rs 15.31 crore to the minister.
Singh has already approved a proposal for 20 per cent two-phase Follow-on-Public Offer (FPO) of SAIL. The next phase is likely the next fiscal, the minister said.
Giving details of divestment plans, Steel Secretary P K Rastogi said that the FPO will be a combination of five per cent dilution of government's equity and five per cent issue of additional shares by the company.
The government will mobilise around Rs 8,000 crore through the FPO at current share prices The amount may vary depending on the share price of SAIL, he added. Rastogi further said the proposal has got in-principle approval from the Disinvestment Department of the Finance Ministry and SAIL's board is now finalising the proposal.
SAIL would be informing market regulator SEBI about the planned FPO. Once the regulator approval is obtained, the ministry will prepare a note to be sent to the Cabinet for its approval, which is likely by December.
SAIL, which will also raise about Rs 8,000 crore through two-pahse FPO, will use fund part finance its Rs 70,000-crore expansion projects.

Sell : Indian Overseas Bank

Sell in the stock of Indian Overseas Bank from a short-term perspective. It is evident from the charts the stock has been on an intermediate-term uptrend from its March low of Rs 37. After taking support at Rs 80 in August, the stock resumed its uptrend move. Subsequently, the stock’s uptrend accelerated but with decreasing volume. It encountered resistance at Rs 141 early this week and began to decline triggered by negative divergence displayed in the daily relative strength index (RSI) and weekly RSI reaching the overbought region. On October 21, the stock declined 3 per cent, with very low volume. The daily moving average convergence and divergence indicator (MACD) has signalled a sell. Both daily and weekly RSI are correcting from the overbought territory. We take a contrarian view on the stock and we are bearish from a short-term perspective. We expect the stock to decline until it hits our price target of Rs 120. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 139.

Sell : Grasim Industries

Sell in the stock of Grasim Industries from a short-term perspective. It is evident from the charts that the stock was on an intermediate-term uptrend from December 2008 low of Rs 872 to July 2009 high of Rs 2,938. However, after encountering key resistance around Rs 2,900, the stock reversed direction triggered by negative divergence in the weekly relative strength index (RSI). It formed a double top, a top reversal pattern spanning between mid-July and early October with baseline at Rs 2,465. On October 9, the stock conclusively broke through this pattern by tumbling almost 3 per cent. Subsequently, it penetrated the intermediate-term uptrend-line and continued its decline. The stock is currently trading well below its 21-day and 50-day moving averages. The daily RSI is featuring in the bearish zone and weekly RSI is slipping towards this zone in the neutral region. We are bearish on the stock from a short-term perspective. We anticipate the stock’s decline to continue until it hits our price target of Rs 2,140. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 2,450.

Buy : Rei Agro

Buy in Rei Agro from a short-term perspective. It is apparent from the charts of the stock that from June high of Rs 103 it was on a medium-term downtrend till its late August low of Rs 45. Subsequently, the stock began to consolidate sideways. It breached the medium-term down trend-line in early September. The stock took support around Rs 45 for the second time last week. It has key medium-term support around Rs 45. On October 16, the stock crossed over its 21-day moving average by jumping almost 6 per cent with good volume. The daily relative strength index (RSI) is heading towards the bullish zone in the neutral region. Besides, the daily, moving average convergence and divergence (MACD) indicator has signalled a buy and is inching towards the positive territory. We are bullish on the stock from a short-term perspective. We expect the stock to move up further until it hits our price target of Rs 55 in the approaching trading sessions. Traders with a short-term perspective can buy the stock while maintaining a stop-loss at Rs 47.5.

Best 5 mid-cap stocks

It’s that time of the year again when many investors rejig their portfolio and take position on their favourite stocks. With most of the blue chips having turned expensive, the only option for most investors is the mid-cap sector.

We at ET Intelligence Group bring you a list of 5 mid-cap stocks that could make your next Diwali brighter. But, as always, make sure you’ve done the due diligence before placing your bets on these.

Tata Teleservices (Maharashtra) Ltd

TTML, which has recently joined hands with Japan’s NTT Docomo, is the Rs 2,000-crore Tata Group company that provides telecom services in the circles of Mumbai and Maharashtra, including Goa. TTML has reported net loss in each of the past six years. However, the picture is likely to change soon.

The company is aggressively adding new subscribers and has topped the 10-million mark, following its innovative pricing methods. Higher users would improve network efficiency, thereby reducing cost per user. The company has undertaken necessary capex in the last few years.

TTML has reduced the level of net loss in the last three quarters. It is likely to post quarterly profit by the March 2010 quarter.

Indian Hotels Company Ltd

Indian Hotels (IHCL), which has underperformed the markets, is currently trading below its book value. This appears pretty cheap as it has always traded between 1.4 and 5 times the book value in the last five years. The last few bad quarters indicate that the scrip is trading 28 times its past 12 months earnings.

The hospitality industry is now going through a tough phase. However, being the industry leader, IHCL could well be the first one to move up once the tide turns. The Commonwealth Games being held in Delhi next year can be one major trigger for the industry, apart from the global economic revival.

Supreme Industries Ltd

Supreme Industries, India’s leading plastic goods manufacturers, has always enjoyed a healthy history of profit growth, cashflows and dividends. Its decision to exit unprofitable businesses, coupled with rising domestic demand for plastics and a likely glut situation in polymers, are likely to keep its profit growth strong in the coming quarters.

At the same time, the company has constructed a commercial complex at Andheri with 2.5-lakh square feet of saleable area at a cost of Rs 115 crore. The sale proceeds from this property will boost the company’s bottomline for the next few quarters. The scrip at Rs 363 values the company just 8.6 times its earnings for trailing 12 months, much cheaper compared to its peers.

IndusInd Bank Ltd

IndusInd Bank has made a huge turnaround in the past one year, reporting a dramatic improvement on key parameters such as non-performing assets (NPAs), net interest margin (NIM) and business per employee. Its gross NPAs or bad loans as a percentage to gross advances have halved in the quarter ended September 2009 against the year-ago period, with NIM rising to 2.86% from 1.68%.

The bank has cleaned up its balance sheet and has more than doubled its profit in the September quarter. The next growth driver will be expansion of its loan book beating the industry growth and continued improvement in its NIM, which can transform it into one of the fastest growing banks.

Dalmia Cement (Bharat) Ltd.

Dalmia Cement (Bharat) (DCBL) is aggressively expanding its cement capacity and is shortly bringing on stream 38% additional cement capacity, taking its total capacity to 9 million tonnes. It is also well positioned in the booming sugar business with a combined capacity of 22,500 TCD (tonnes of cane per day) at three locations in UP. These two businesses should help the company grow its net sales aggressively in the next two years.

In the past four years, the company has quadrupled its revenues and is expected to maintain its growth trajectory in the next few years. Dalmia Cements recently announced plans to raise nearly Rs 3,000 crore to fund its expansion plans. The company plans to add a further 10 million tonnes capacity across the country in a phased manner over the next three years. At Rs 169.3, Dalmia Cement (Bharat) trades at a P/E of 8.2 and looks cheap.