Analysis: MARUTI

Today’s pick is MARUTI [stockquote]MARUTI[/stockquote]. The stock began 2012 with an uptrend, which ended around mid-April after a series of resistance around Rs. 1,400 levels. This was then followed by a correction to Rs. 1,100 levels till August. The stock has since been on an up-trend and has undergone a flag formation around its 52-week high levels of Rs. 1,539 since the last 6 weeks. In the last three months, the stock has moved +10% vs. +5% of the Nifty’s.

MARUTI technical analysis chart

Oscillators RSI and CMO are in no-man’s land. Also, the short-term technical flashed a 4×18 Bullish cross-over for the scrip yesterday.

The MACD line and the signal line have been moving close to each other, accompanied with the stable histogram levels. Also, long-term GMMA lines are experiencing a contraction which does not suggest any direction to the stock in the near term.

MARUTI Correlation chart

MARUTI’s average correlation with the Nifty is 0.47 is positive. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

MARUTI volatility chart

MARUTI has a historical volatility in the range of 0.3 to 0.7. The scrip’s volatility currently is in the lowest part of the range.

To conclude, the stock is undergoing a consolidation phase, and given these technicals, a short-term HOLD is suggested. The long-term direction would be decided based on the bearish or bullish breakout of the current flag.

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Analysis: BHARTIARTL

Today’s pick is BHARTIARTL [stockquote]BHARTIARTL[/stockquote]. The stock began 2012 with a nick of an uptrend, which ended with the stock touching its 52-week high of Rs. 400 in February. This was then followed by a correction to Rs. 250 levels seen in September. The stock has since been on an up-trend. In the last three months, the stock has moved +18% vs. +4% of the Nifty’s.

BHARTIARTL Technical analysis chart

Oscillators RSI and CMO are in no-man’s land. However, the short-term technical flashed a 4×18 bullish cross-over for the scrip yesterday followed by a long-term golden cross on the 28th of December giving a prominent bullish sign for the scrip.

The MACD line that just started moving up towards the signal line, along with the rise in histogram levels, is suggesting an imminent bullish move. Also, long-term GMMA lines are experiencing an expansion giving out a bullish signal for the scrip.

BHARTIARTL Correlation chart

BHARTIARTL’s average correlation with the Nifty is 0.48 is positive. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

BHARTIARTL Volatility chart

BHARTIARTL has a historical volatility in the range of 0.4 to 0.7. The scrip’s volatility currently is in the middle of the range.

To conclude, given these technicals, the stock is both a short-term and long-term BUY.

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Analysis: TATAMOTORS (TTM)

Today’s pick is TATAMOTORS (ADR: TTM) [stockquote]TATAMOTORS[/stockquote]. The stock began 2012 with an uptrend that took it all the way to its 52-week high of Rs. 320 in April. This was then followed by a correction to Rs. 200 levels which was seen in August. The stock has since been on an up-trend and looks poised to test Rs. 320 levels again. In the last three months, the stock has moved +15% vs. +5% of the Nifty’s.

TATAMOTORS Technical analysis chart

Oscillators RSI and CMO are flashing a bright red over-bought signal. Also, the stock is trading close to the upper Bollinger band which is short-term bearish.

The MACD line that just started moving down towards the signal line, along with the fall in histogram levels, is suggesting an imminent bearish move. However, long-term and short-term GMMA lines are experiencing an expansion giving out a bullish signal for the scrip.

TATAMOTORS correlation chart

TATAMOTORS’s average correlation with the Nifty is 0.64 is positive and strong. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

TATAMOTORS volatility chart

TATAMOTORS has a historical volatility in the range of 1 to 5. The scrip’s volatility currently is in the lower end of the range. The high volatility could be attributed to the face value split from Rs. 10 to Rs. 2 last year (September 2011.)Tata Motors Ltd (TTM.N) Analysts - Reuters.com

Analysts have mixed expectations with the scrip. Better than expected earnings for the current quarter can help bring some consensus to the table.

Dividend investors should also have a look at the DVR (Differential Voting Rights) version of the stock: TATAMTRDVR [stockquote]TATAMTRDVR[/stockquote] that is trading at almost half the valuation of the regular equity version.

To conclude, given these technicals, the stock is a short-term SELL. For the long-term we suggest a HOLD because of the strong underlying trend with a keen eye around Rs. 320 levels.

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The StockViz Reference Portfolio – Dec/28

The StockViz reference portfolio we introduced last week is coming along nicely. The algorithm trimmed quite a few line-items and consolidated around eight stocks. Quantitative Portfolio

Given NIFTY’s +1.00% for last week, the managed portfolio returned +3.00%.

More than the returns, the portfolio is managed by an algorithm, making the process

  1. Systematic
  2. Repeatable
  3. Testable, and
  4. Risk-managed

Talk to us about our Quantitative Portfolio Strategy Execution.

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Weekly Recap

NIFTY.2012-12-24.2012-12-28

The NIFTY ended on a positive note, drifting up +1.00% for the week.
Biggest losers were GRASIM (-2.16%), JINDALSTEL (-1.92%) and M&M (-1.38%).
And the biggest winners were BHARTIARTL (+3.81%), TATAMOTORS (+3.56%) and WIPRO (+3.32%).fii.2012-12-24.2012-12-28

Advancers lead decliners 37 vs 13

Gold: -0.10%, Banks: +0.77%. Infrastructure: +2.07%,
Net FII flows for the week: $1,058.37 mm (Equity) and $286.40 mm (Debt)

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