Category: Your Money

Analysis: TATACOMM (TCL)

Today’s pick is TATACOMM [stockquote]TATACOMM[/stockquote]. After an initial uptrend that lasted until February, the stock collapsed towards Rs. 200 levels. Testing it a couple of times times through July, the stock tried moving up but met with resistance around 260 levels and has been trading between Rs. 220 to Rs. 260 range since. In the last three months, the stock is down –7% against 8% rise of the Nifty’s.

TATACOMM technical chart

Oscillators RSI and CMO are nearing towards the over-sold territory. But they still have to cover some distance before they give any bullish sign.

The MACD line and the signal line are moving very close to each other, making it very unclear as to what might be in store for the stock for the short term.

The long-term GMMA and the short-term GMMA lines are also unable to give any directional suggestion as they are not well dispersed. Also, the 9×18 technical gave a near term bearish sign for the scrip just last week.

TATACOMM correlation chart

TATACOMM’s average correlation of -0.13 with the Nifty is negative. The stock will not be replicating the movements of Nifty given a negative correlation co-efficient. [stockquote]NIFTYBEES[/stockquote]

TATACOMM volatility chart

TATACOMM has a historical volatility in the range of 0.4 to 1.2. However in the last few years it has been in the 0.4 – 0.8 range. The scrip’s volatility currently is in the lower range.

TATACOMM analyst recommendations

Analysts have given an underperform rating to the scrip based on its expected earnings of the next 3 months.

Given these technicals and analysts outlook, the stock is a short-term SELL. A break out of the range-bound movement in any direction would suggest the longer-term direction for the scrip.

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Weekly Recap

NIFTY.2012-12-10.2012-12-14

The NIFTY ended on a negative tone, drifting down -1.12% for the week.
Biggest losers were BHEL (-7.45%), TATAPOWER (-4.64%) and NTPC (-4.41%).
And the biggest winners were BAJAJ-AUTO (+7.29%), BANKBARODA (+5.42%) fii.2012-12-10.2012-12-14and JINDALSTEL (+5.22%).
Decliners eclipsed advancers 30 vs 20
Gold: -0.01%, Banks: +0.24%. Infrastructure: +4.41%,
Net FII flows for the week: $1,070.86 mm (Equity) and $306.36 mm (Debt)

 
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Daily News Summary for Dec-13

COALINDIA [stockquote]COALINDIA[/stockquote]

UNITECH [stockquote]UNITECH[/stockquote]

MARUTI [stockquote]MARUTI[/stockquote]

CORPBANK [stockquote]CORPBANK[/stockquote]

RELIANCE [stockquote]RELIANCE[/stockquote]

GOLDBEES [stockquote]GOLDBEES[/stockquote]

CANBK [stockquote]CANBK[/stockquote]

HDFCBANK [stockquote]HDFCBANK[/stockquote]

SATYAMCOMP [stockquote]SATYAMCOMP[/stockquote]

KOUTONS [stockquote]KOUTONS[/stockquote]

TATAMOTORS [stockquote]TATAMOTORS[/stockquote]

KFA [stockquote]KFA[/stockquote]

NATIONALUM [stockquote]NATIONALUM[/stockquote]

ICICIBANK [stockquote]ICICIBANK[/stockquote]

JSWSTEEL [stockquote]JSWSTEEL[/stockquote]

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Analysis: ABIRLANUVO

Today’s pick is ABIRLANUVO [stockquote]ABIRLANUVO[/stockquote]. After an initial uptrend that lasted until April, the stock collapsed towards its long term support level of around Rs. 725, testing it multiple times through late September. However, the stock regained its mojo and has been on an up-trend ever since. In the last three months, the stock has risen 41% against 10% of the Nifty’s.

stock

Oscillators RSI and CMO are in over-bought territory. Besides, they are at the highest levels seen over the last year which is an extremely bearish sign.

The MACD line is headed towards the signal line and the decreasing histogram levels are suggesting a short-term bearish move.

The long-term GMMA are fanning out to give a long-term bullish outlook for the stock. The short-term GMMA lines just gave a bearish signal with the lines crossing-over. However, the 9×18 technical is suggesting a near term bullish move for the scrip.

cor

ABIRLANUVO’s average correlation of 0.62 with the Nifty is positive and strong. The stock will be replicating the movements of Nifty given such co-efficient. [stockquote]NIFTYBEES[/stockquote]

vol

ABIRLANUVO has a historical volatility in the range of 0.3 to 0.6. The scrip’s volatility is in the middle range.

abnuvoAlso note that HSBC sold Rs. 15 Cr. worth (0.13% of the shares outstanding) in the open market on the 26th November.

From a fundamental point of view, Globe Capital has a BUY on ABIRLANUVO. They expect it to become a beneficiary of increased FDI in insurance and they are also bullish on its chances of getting a banking license.

To conclude, given these technicals, the stock is a short-term SELL. For the long-term the stock has a clear technical green signal and it appears that the fundamentals concur: long-term BUY.

 

 

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Too early to rejoice over retail FDI

India Inc is euphoric as the red carpet for Walmart, Tesco and its ilk has been formally rolled out with reports suggesting Delhi as the first city to host the global retail giants.

Riding on the retail bandwagon, the analyst community and government voices have fuelled hopes of more measures in the coming weeks like passing of key financial sector reform bills, FDI in insurance and so on.

RETAIL MARKET-CRISIL

In a September, 2012 report, Crisil estimated that allowing 51 % FDI in multi-brand retail will result in investment of $2.5 billion-$3billion in the retail sector over the next five years.

FDI in retail will also address the issue of inflation as mandatory creation of backend infrastructure may remove bottlenecks and inefficiencies in the supply chain and pave way for better farm practices and higher prices for farmers.

But getting carried away with the ‘potential’ big investments would be foolhardy as FDI in multi-brand retail is at the discretion of states. With a busy election calendar for the next one year followed by the big Lok Sabha elections, FDI in retail is unlikely to get off the ground.

RETAIL FORMATS

After the Gujarat polls in December, there are state elections in Karnataka, Meghalaya, Nagaland and Tripura in the first half of 2013 and Madhya Pradesh, Mizoram, Delhi and Rajasthan in the second half. This means implementation of FDI in retail is at risk in the near term as the reform measure will give way to populism. With the latest Walmart controversy over lobbying claims rocking Parliament, FDI in retail has attracted severe negative publicity and is being viewed as anti-people. On current mood, even Congress-ruled states would not invite the wrath of voters and woo global retailers.

Also, riders like minimum $100 million investment, 30% sourcing from small industries, etc may act as barriers for global retailers.

However, retail stocks have been flying high in the last few months on hopes that FDI would help them forge partnerships with global retail chains and bring in funding and technology for the sector.

RETAIL-COMPANIES SHARE

While FDI in retail will attract capital inflows in the long-term, it is miniscule when compared to India’s annual requirements. C Rangarajan, Prime Minister’s Economic Advisor was quoted as saying in October that India needs capital inflows of up to $ 70 billion annually for the next five years to bring its Current Account Deficit (CAD) down to 2.3% of GDP.

RETAIL VERTICALS

Apart from acting as a sentiment booster, FDI in retail is unlikely to change the fundamental equations at the ground level like elevated inflation, high fiscal and current account deficits and a weakening currency.

For the economy to decisively turnaround, structural reforms like addressing coal and power sector issues, fast-tracking investment proposals and land acquisition and green clearances are crucial.

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[stockquote]BRANDHOUSE[/stockquote] [stockquote]CANTABIL[/stockquote] [stockquote]KOUTONS[/stockquote] [stockquote]SHOPERSTOP[/stockquote] [stockquote]TRENT[/stockquote]

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