Category: Your Money

Sunder’s List

English: Silvio Berlusconi

Roundup: S&P -1.15%. Dow -0.93%. Nasdaq -1.51%. Gold -0.12% at 1,674.40. London -1.58%. Germany -2.49%. France -3.01%. Italy -4.4%, and Spain -3.7%Nikkei is currently at -1.4%.

Europe is back playing spoilsport to the rally in equity markets. In Italy, ex-premier Silvio Berlusconi has upset the political landscape just three weeks before elections, surging back into contention with vows to rip up “German-imposed” austerity policies and cancel a hated property tax. And Spain’s Prime Minister faced calls to resign amid allegations that have embroiled senior members of the ruling conservative party in a wide-reaching corruption scandal.

US December Factory orders came in at +1.8% vs. consensus of +2.4%.

Meanwhile, back home in India, the MNCs are increasingly under the tax scanner. After Vodafone, Wal-Mart and Nokia, it is now Royal Dutch Shell’s turn. The tax department has sent Shell a notice that claims it underpriced a sale of shares to an overseas group company by $2.7 billion. (WSJ)

Foreign investors lapped up as much 60% of the 6 crore shares in Oil India, pumping in about Rs 1,800 crore to buy equity in India’s second biggest explorer. (ET) [stockquote]OIL[/stockquote]

HSBC: Investors should be brave at this point of time as there is very less risk of the global economy falling back into recession. The risk-reward ratio is in favour of equities. Besides, Indian market valuations are looking very cheap compared to other regional markets. Given the kind of corporate profitability, Indian companies are trading at attractive valuations. (ET)

Europe gets the securities transaction tax, aka, the Tobin tax. The plans are expected to be published within weeks and to be signed off by mid-March. (FT)

Good luck!

Live Portfolio – Initialized Feb/4

Making use of technical analysis has always been a adrenaline rush for me, and I have been doing it for a long time now. But, from now on I will be sharing the trades and the ideas behind them with all of you. This portfolio will be of select few stocks that are picked up just for the technical reasons, and for the risk management reasons, I will be making both Buy and Sell calls for them.

Stocks that I bought today are CAIRN [stockquote]CAIRN[/stockquote], UCOBANK [stockquote]UCOBANK[/stockquote] and, VOLTAS [stockquote]VOLTAS[/stockquote]. Below are the price charts of all the above with reason of the transaction.

Cairn India Technical Chart

Its quite visible, that the CAIRN’s stock is going to experience the golden cross of 50×200 bullish cross-over, and the combination with declining histogram levels of MACD are suggesting a short-term up move for the scrip. The convergence of RSI with price action is also giving a positive support for the thesis. Also, the stock is trading close to the lower Bollinger-band, suggesting an upcoming Bullish move.

For UCOBANK, the stock was in a flag formation for a while and has been trading close to the lower Bollinger-band. An opportunity is visible around the current levels, with the increasing RSI levels combined with increase in volumes. Although, for the stock it is suggested to have Trailing stop losses in place.

UCOBANK Technical Chart

The last stock is VOLTAS and it has broken out of a downward flag on Wednesday, confirmed by the large number of trades on Thursday and close above the upper line of Flag. The increase in RSI is also suggesting improved buys for the stock.

VOLTAS Technical Chart

Here’s how I have allocated the trades:

 

Abhishek's portfolio

As you can see, its more or less an even split. And our demat account holders know the screen below very well:

StockViz Order Screen

Its tough trading when you have the spotlight focused on you. Fingers crossed!

Investing with a Human Touch

Abhishek, our Chief Technical Analyst, will start blogging about his own personal investments from today. He has seeded his account with Rs. 20,000/- a sum that most retail investors get started with. The idea is to show how you can use the tools provided by StockViz to:

  • Screen for stocks
  • Confirm the right entry point
  • How to manage risk, and
  • When to exit

Wish him good luck!

Follow his posts here.

Analysis: INFY

Today’s pick is INFY [stockquote]INFY[/stockquote]. The stock was moving in a range till March since starting of the year. It then fell sharply to Rs. 2,400 levels in April after moving in range till July the stock again fell to Rs. 2,200 levels. Since then the stock has been on an uptrend. In the last three months, the stock has moved +16% vs. +5% of the Nifty’s.

INFY technical analysis chart

Oscillator RSI is hovering in the over-bought territory whereas CMO is in no man’s land. The stock is trading in the middle of Bollinger band not suggesting any directional move. However, short-term technical just saw 9×4 bearish cross-over.

The MACD line has just penetrated the signal line in a bearish manner. However, both long-term and short-term GMMA lines are very distant from each other, giving out an extremely bullish sign for the scrip.

INFY correlation chart

INFY’s average correlation with the Nifty is 0.51 which is positive. The scrip will be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

INFY volatility chart

INFY has a historical volatility in the range of 0.2 to 0.7. The scrip’s volatility is currently in the higher end of the range.

INFY Analyst coverage

Majority of analysts are suggesting a hold for this stock given the current condition of the IT industry.

Given these technicals, we suggest a short-term sell. For the long-term, we suggest a buy given the well spread out GMMA lines. However, we recommend that investors tread with caution given that the spread in the GMMA lines has occurred due to the +20% spike seen at the most recent earnings announcement. Also, for risk management we suggest having trailing stop-losses in case trend-reversal were to take place.

Sunder’s List

Credit Suisse logo c. 1972

Fridays’ overseas action: S&P +1.01%, Dow +1.08%, Nasdaq +1.18%, London +1.12%. Germany +0.74%. France +1.10%.

The Economist’s piece on Maruti’s rise, fall and redemption. (Economist) [stockquote]MARUTI[/stockquote]

Credit Suisse has gone on record that the bull run for gold is over, saying the “fear trade” that caused the metal to more than quintuple in value peaked last year. “We feel that demand for ‘safe havens’ will continue to moderate over coming months and years as the risk of a truly monumental economic collapse continues to diminish,” the bank said. (FT) [stockquote]GOLDBEES[/stockquote]

At least we Indians are candid: “We don’t want to get into a similar mess. It’s only natural that on the day my bank is borrowing, I will tend to forecast a little lower rate, but send out a higher number when I’m lending.” On how the LIBOR scandal in Europe has made Indian brokers shy. (ET)

World Bank and the Asian Development Bank have bluntly told India it needs to improve its investment climate and physical infrastructure, and modernize its financial sector if it needs to grow. Tell us something we don’t know. (FT)

Good luck!