SENSEX (27011) BSE Sensex opened positive but traded with a negative bias on the derivatives expiry day and breached its 27000 levels for the first time after sixteen weeks hitting an intraday low of 26897 levels. Thus, index ended the day in negative territory for consecutive second session, with a loss of 215 points and continued forming its lower highs price formation of last three weeks. Now, it has to cross and hold its 27500 levels bounce back and witness buying interest towards 27700 and psychological 28000 levels while on downside immediate support exists at around 27000 levels.
STOCK IN FOCUS
Motherson Sumi closed 5% higher in thursdays trade on above average volumes. We have been consistently highlighting Motherson as our key pick in the Auto component space as we remain upbeat about the company’s prospects and believe it to be a major beneficiary of recovery in domestic as well as global passenger vehicle sales. With over 14 new upcoming plants until FY16 coupled with a strong order book and execution of new orders means we estimate the company to post 18% revenue growth CAGR until FY17E. Further a strong margin expansion in its European business (SMR & SMP) would lead to EPS CAGR of over 52% in the next 2 years and D/E declining to 0.4x and ROCE (post tax) improve to ~30% by FY17E.
Currently trading at 16x FY17E earnings, we believe that the stock does not fully reflect the revival in domestic business as well as turnaround in subsidiaries, reiterate BUY with a Target Price of Rs. 529.
INTRADAY PICKS
INDUSINDBANK (LTP: 824) BUY For today's trade, long position can be initiated only in Rs.808- 804 range for target of Rs.840 with a strict stop loss of Rs.798.
YES BANK (LTP: 844) BUY For today's trade, short position can be initiated only in Rs.825- 820 range for target of Rs.845-850 with a strict stop loss of Rs.815.
LUPIN is turning from the lower band of the trading range and showing the early sign of trend reversal. It has formed a dragonfly DOJI on weekly chart thus support the bullish reversal in the stock. It looks attractive in terms of risk reward ratio. Thus, traders can buy the stock between 1738-1755 with stop loss of 1722 for the upside target of 1797 levels.
HINDPETRO crossed its hurdle of 624 levels and managed to hold the gains even after pressure in the broader market. It has made a narrow range price formation on daily chart with a bullish DOJI candle on weekly chart. It is turning from the lower band thus indicating that the stock may shoot up to 640 and higher levels. One can buy the stock between 613-619 with stop loss of 604 for the upside target of 640 levels.
Technical Stock Recommendations
HDFC Bank, continues to move in narrow but declining trend despite sharp sell-off observed in the benchmark indices. Stock faces strong hurdle now in the range of Rs1,020 to Rs1,040 that is seen as short term resistance for the stock. On other hand, long term support in the form of 200 day simple moving average that is placed at Rs940 continues to act as a strong support for the stock on downside. Both MACD and RSI continue to depict the weak trend in the stock. Even while doing a peer comparison, stock continues to depict the weakness, with strong resistance at higher level.
Thus, short position can be initiated only in Rs1,020-1,040 range for target of Rs940 with a stop loss of Rs1,055.
No comments:
Post a Comment