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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Preetam’s List

Friday’s market action: Dow +0.13% to 13488. Crude+0.29% to $93.85. Gold +0.06% to $1661.60 London +0.33%. Germany +0.09%. France +0.08%.

Investors are speculating if TCS will surprise the Street when its announces its earnings later today. Analysts, however, are not expecting any major deviations from their estimates. TCS [stockquote]TCS[/stockquote] and WIPRO [stockquote]WIPRO[/stockquote] closed 4% and 6% higher on Friday respectively following INFY’s lead. (ET)

India’s headline inflation is likely to have risen in December by less than the central bank projected, and analysts expect a cut of at least 25 basis points in the policy repo rate. (ET)

After Satyam scam, it looks like Price Waterhouse has caught itself in another problem. The Income-Tax office in Chennai has summoned audit firm Price Waterhouse and Company to appear before it in connection with the alleged tax default by Nokia to the extent of Rs 2,500 crore. (BusinessLine)

China’s unexpected surge in exports last month renewed concern from analysts at Goldman Sachs Group Inc., UBS AG and Australia & New Zealand Banking Group Ltd. (ANZ) that statistics from the nation can be unreliable.The increase didn’t match goods movements through ports and imports by trading partners according to UBS. What is cooking in China now?  (Bloomberg)

After US and France changing there TAX regime, voices in India are contemplating the pros and cons for Indian economy. What does it have in store for investor and people in general – Aswath Damodaran explains . (ET)

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The StockViz Reference Portfolio – Jan/11

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It was a rough week for our portfolio algorithms.

While the NIFTY went down -1.05% we are down -2.38% for the week. We had so many trailing-stop-losses trigger today that our portfolio is almost 40% cash.

We remain focused on 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 Heatmap : Performance

The NIFTY ended on a negative tone, drifting down -1.05% for the week.
Biggest losers were AMBUJACEM (-9.56%), JPASSOCIAT (-7.82%) and ULTRACEMCO (-7.77%).
And the biggest winners were INFY (+15.43%), TATAMOTORS (+4.76%) and WIPRO (+4.04%).
Decliners eclipsed advancers 37 vs 13fii.2013-01-07.2013-01-11

 

Gold: +0.10%, Banks: -4.59%. Infrastructure: +0.55%,

Net FII flows for the week: $729.13 mm (Equity) and –$238.17 mm (Debt)

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Analysis: SUZLON

Today’s pick is SUZLON [stockquote]SUZLON[/stockquote]. The stock started the year with a steep uptrend to blow past Rs. 30. It hovered around that point for a month, and finally gave up the momentum and slid all the way down to Rs. 15. However, it looks like it is at the beginning of an uptrend, having broken the pennant it was stuck in since December. In the last three months, the stock has moved +28% vs. +5% of the Nifty’s.

SUZLON technical analysis chart

Oscillators RSI and CMO are in no man’s land and are not signaling any directional move. Short-term technical just saw a 4×9 and 4X18 bullish cross-over.

The MACD line is moving close to the signal line but the increasing histogram levels are suggesting a bullish outlook. The long-term GMMA lines are starting to flag out suggesting an upcoming long term bullish move for the scrip.

SUZLON correlation chart

SUZLON’s average correlation with the Nifty is 0.57, which is positive. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

SUZLON volatility chart

SUZLON has a historical volatility in the range of 0.4 to 1.0. The scrip’s volatility currently is in the middle of the range.

Given these technicals, we suggest a short-term and a long-term Buy for the script. Also, looking at the volatile history of the stock, we suggest traders to use trailing stop-losses in order to book profits if a trend-reversal were to take place.

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