Author: Abhishek

Analysis: GLAXO

Today’s pick is GLAXO [stockquote]GLAXO[/stockquote]. The uptrend that started in the beginning of the year lasted till April touching the highs of Rs. 2,300, post which the stock moved back to the support level of Rs. 1,925 in a month. The up-move that started later saw a resistance around Rs. 2,200 levels and stock corrected itself back to the support levels by October. Since then the stock is in an up-trend. In the last three months, the stock has moved +10% vs. +7% of the Nifty’s.

GLAXO technical analysis chart

Oscillators RSI and CMO are deep into the over-bought territory, giving out a bearish signal for the stock. Long term SMA’s just saw a 50×200 bullish golden cross-over.

The MACD line is moving towards the signal line, accompanied by the falling histogram levels such movement is suggesting an imminent bearish move for the stock. The long-term GMMA lines are well dispersed out, suggesting a bullish outlook for the scrip. However, short-term GMMA lines are starting to move towards each other giving a bearish outlook for the short term .

GLAXO correlation chart

GLAXO’s average correlation with the Nifty is 0.13 is positive. The scrip will not be replicating the movement of Nifty closely. [stockquote]NIFTYBEES[/stockquote]

GLAXO volatility chart

GLAXO has a historical volatility in the range of 0.2 to 0.5. The scrip’s volatility currently is in the middle of the range.

Given these technicals, we suggest a short-term Hold. Looking at the well dispersed GMMA lines and the golden cross signal we suggest a long-term Buy for the script. . It will be beneficial to have trailing stop-losses in place, in order to book profits if a correction is seen around the resistance levels.

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Preetam’s List

Market roundup: Dow +0.20% to 13534. S&P +0.11% to 1472. Gold -0.09% to $1682.30 London–0.15%. Germany –0.69%. France –0.29%.

The World Bank forecast that global gross domestic product will inch up 2.4 per cent this year, from 2.3 per cent in 2012. In its last forecast in June, the bank projected global growth would reach 3.0 per cent in 2013. Will the new growth approximations have an impact on the roaring markets? (ET)

Axis Bank Ltd [stockquote]AXISBANK[/stockquote] did well in the December quarter, with its net interest income rising by 16.6% over the year-ago period. Some analysts had expected growth of 12-13%, primarily because of a high base effect. After IT its now time for our banks to shine. HDFCBANK and IDBI results expected by end of this week.  (MINT)

India’s antitrust body has sought more details on the acquisition of United Spirits Ltd (USL) by Diageo Plc to make sure that the merger doesn’t create a monopoly. [stockquote]USL[/stockquote] controls over half of India’s 250 million cases liquor market and owns brands such as McDowell’s No.1 and Bagpiper. Mr. Mallya will have to wait for a bit more to see the deal through. (MINT)

SEBI has proposed allowing gold exchange-traded funds to park up to 20% of their gold holdings with commercial banks against 100% maintained currently. The suggestion is in line with a similar proposal made by the RBI recently to put the gold corpus of ETFs to productive use and, thereby, curb India’s huge gold imports. Let’s wait to see how this impacts performance of various GOLD ETF’s like [[stockquote]GOLDBEES[/stockquote], [stockquote]KOTAKGOLD[/stockquote] etc. (ET)

How is Facebook’s new search tool (Graph search) going to fare with Google’s long standing search engine? Mark Zuckerberg unveiled a feature to help its users search for people and places within the social network, in the first major product launch event since company’s IPO in May last year. Will it be a decisive factor in the competition amongst the two? (MINT)

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Analysis: SAIL

Today’s pick is SAIL [stockquote]SAIL[/stockquote]. The stock started the year with a nick of an uptrend to see the Rs. 115 levels but dropped on its chin due to lost momentum soon thereafter to see itself around Rs. 80 levels by September. After a couple of trials to move up, the stock finally broke the down-trend in place during late December and is currently trading at Rs. 90. In the last three months, the stock has moved +12% vs. +6% of the Nifty’s.

SAIL technical analysis chart

Oscillators RSI and CMO are in no man’s land unable to suggest any direction. The stock just saw a short-term 9×4 bearish cross-over.

The MACD line is moving towards the signal line, accompanied by the falling histogram levels such movement is suggesting an imminent bearish move for the stock. The long-term GMMA lines are well dispersed out, suggesting a bullish outlook for the scrip. However, the sudden decrease in the prices has led to a constrained movement of short-term GMMA lines giving a bearish signal.

SAIL Correlation chart

SAIL’s average correlation with the Nifty is 0.67 is positive and strong. The scrip will be closely replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

SAIL volatility chart

SAIL has a historical volatility in the range of 0.3 to 0.7. The scrip’s volatility currently is in the middle of the range.

Given these technicals, we suggest a short-term Sell. Looking at the well dispersed GMMA lines we suggest a long-term Buy for the script with a keen eye around Rs. 100 levels for any resistance.

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Preetam’s List

Market roundup: Dow +0.14% to 13507. S&P –0.09% to 1470. Gold –0.15% to $1667.60 London –0.22%. Germany +0.18%. France +0.06%

Markets rallied 1.22% on Monday, after the government announced deferring the implementation of controversial tax-avoidance rules until 2016. The decision to defer GAAR would stimulate business confidence of investors, which had taken a beating with the introduction of tax proposal. (ET)

The spread between gold and platinum narrowed to $31.30 an ounce, its smallest since last April, after platinum staged its biggest two-week rise in about four months on growing expectations of global economic recovery. Is Platinum on a come-back run? (ET)

Financial sector funds recorded their sixth straight week of inflows as the strength and depth of support from central banks overshadowed news of more cost cutting. US averting fiscal cliff, signs of economic recovery in China keep investor sentiment upbeat. (MINT)

TCS [stockquote]TCS[/stockquote] net profit for the three months ended December rose 26.7% from a year earlier, beating analysts’ expectations in a seasonally weak quarter and auguring well for the troubled $70 billion Indian information technology (IT) exports business. (MINT)

And on a totally unrelated front, Coke is now going to address obesity in Ads after becoming one of the world’s most powerful brands by equating its soft drinks with happiness.. (ET)

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Analysis: DRREDDY (RDY)

Today’s pick is DRREDDY [stockquote]DRREDDY[/stockquote]. The stock started the year with an uptrend to see the Rs. 1,800 levels. After hovering for a week around the levels it corrected itself to Rs. 1,525 level. Since then the stock has been on an uptrend and it just saw its 52-week’s high of Rs.1,927 during last week. In the last three months, the stock has moved +10% vs. +5% of the Nifty’s.

DRREDDY technical analysis chart

Oscillators RSI and CMO are in the over-bought territory suggesting a short-term correction for stock. The stock just experienced a bullish Dragonfly Doji.

The MACD line is moving towards the signal line, accompanied by the falling histogram levels such movement is suggesting a short-term bearish move for the stock. The long-term and short-term GMMA lines are well dispersed and are suggesting a bullish outlook for the scrip.

DRREDDY correlation chart

DRREDDY’s average correlation with the Nifty is 0.34 is positive. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

DRREDDY volatility chart

DRREDDY has a historical volatility in the range of 0.25 to 0.45. The scrip’s volatility currently is in the lower end of the range.

RDY

Analysts are quite positive about the scrip which is a very good sign for the stock. Traders are advised to keep an eye on the forthcoming results as a drift from the analysts expectation can bring about a drastic change for the stock.

Given these technicals, we suggest a short-term Hold. Also looking at the up-trend in place we suggest a long-term Buy for the script. It will be beneficial to have trailing stop-losses in place, in order to book profits if a trend-reversal were to take place.

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