25 April,2011 10:41 AM IST | | Alex K Mathews
Better than expected numbers result in optimism
Driven by better than expected quarterly numbers, markets, the world over cheered and added to their gains. After disappointing results from Infosys, markets regained lost glory after HCL Tech and HDFC Bank came out with surprising numbers, which the markets celebrated whole heartedly. HCL Tech came out with a 26.37 per cent rise in net profit from Rs 262.57 crore in March 2010 to Rs 331.81 crore in March 2011, while the HDFC Bank came out with a 33.24 per cent rise in net profit from Rs 836.62 crore in March 2010, to Rs 1114.71 crore in March 2011.u00a0As it is result season across the globe, we are witnessing better than expected numbers from majors like Intel Inc, Apple, and Yahoo, which reassured investor confidence in the current scenario.u00a0
Libya Implodes: A Libyan rebel holds the Kingdom of Libya flag as
he walks past a burning, wrecked tank at a site. Pic/AFP
The food inflation number for last week, which was at 8.74 per cent and fuel index rose to 13.05 per cent in the year through to April 9. Price declines in HCL-Tech and HDFC Bank can be utlilised to buy these stocks for a medium-term perspective.u00a0
Protection
Nifty has moved above 5800 and has immediate resistance at 5900 and 5960.u00a0 If Nifty can move above these levels then one can expect huge short covering, which can lift Nifty beyond 6025 levels. Investors can buy Nifty futures at around 5900 levels and they can buy Nifty April 5900 put options of Nifty for protection.u00a0 Investors with high-risk tolerance can buy 5900 Nifty call options for three days.
As per the recent reports from the MET department, the monsoon is going to be good this time and so stocks in the fertilizer, agriculture and automobile sector moved up on expectation of increased demand. Fertilizer stocks like Coromandal Fertilizer and Tata Chemicals can be bought at every decline for a medium to long-term perspective.
Positive
Banking Nifty and individual banking stocks are very positive after the HDFC Banks result. ICICI Bank has an immediate target of Rs 1125, above which, it can test Rs 1148 and more.u00a0 SBI is also likely to move up towards Rs 2925 in the short-term and it has the strength to move even above Rs 3000 in the medium-term. Global economic data was mostly positive.u00a0
The French Manufacturing PMI rose to 56.9 against 55.4 and services PMI rose to 63.4 against 60.4. The US building permits rose to 0.59 million against 0.53 million, while housing starts at 0.55 million against 0.51 million. Also the US existing homes sales rose to 5.1 million against 4.92 million.u00a0u00a0In Asia, Japanese Tertiary Industry Activity Index rose to 0.8 per cent against an estimated 0.2 per cent.u00a0
Crude
Commodity price is yet another aspect that demands attention. Crude remained positive after UK and France asked their allies to intensify their offensive against Libya, as the Libyan dictator remained defiant. WTI crude moved past $110 and is currently trading at around $112. It is likely to move above $113 to $ 115 in the short-term. Recent US crude inventories moved up but the move wasn't strong enough to hold the crude price.
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Metal prices rose considerably last week on fear high inflation in China and the US. Gold prices moved to new highs daily. They are now at $1507 and look likely to break $ 1510 and $1518.u00a0 Partial profit booking can be advisable at $1518 levels.u00a0 Re-entry can be made at lower levels very close to $1500 levels.u00a0 Silver, too, is looking very strong and has an immediate target of $47.75 and is likely to move towards $48.25. Strong support is visible at $45.6 and $44.35. Rising gold prices are a blessing to jewellery stocks like Thangamayil Jewellers, Shree Ganesh Jewellery and also stocks like Gitanjali Gems, Shrenuj etcetera that are yet to come out with their Q4 numbers.
The author may have a vested interest in investments he has recommended. Feel free to e-mail him at alex@geojit.com. Geojit BNP Paribas has membership in, and is listed on, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
Disclaimer: No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here isu00a0 for educational and information purposes only and under no circumstances should be used for actual trading or making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment or trading decisions, based on information published here.
