Stock Recommendations

SENSEX (28260) BSE Sensex staged spectacular performance on first day of the financial year 2015-16 and rallied around 300 points. The index after trading in a tight range in the absence of any major cues and weakness in the Asian markets, witnessed a sharp recovery in second half of the session and pared its loses on account of strong buying in Banking, Realty and FMCG sector stocks. 

Now, it has to hold above 28300 levels to continue the buying interest towards 28500 levels while on downside immediate support exists at around 28000 levels.

STOCK IN FOCUS

JB Chemicals gained ~3.5% in Wednesday’s trade on above average volumes. The stock has lost nearly 30% of its market capitalization in the past few months on the back of concerns of Ruble impact and delay in expansion plans. 

However, management guidance of re-negotiating long-term contracts under new conditions, which will partially mitigate the currency effect, has partially made for the fall in the past one month.  We believe that the concern of pressure on margins are overdone, and focus on US and CRAMS apart from India remain key growth drivers. 

JB Chemicals has an outstanding cash balance of Rs500cr, which forms ~44% of the capital deployed. With return ratios in the range of 13-15% (both ROCE and ROE), we believe the stock is an attractive long-term bet. 

We remain positive on the stock with a Target Price of Rs.230.

INTRADAY PICKS

LIC HSG FIN (LTP: 446) BUY For today's trade, long position can be initiated only in Rs.440-437 range for target of Rs.460 with a strict stop loss of Rs.432. 

HDIL (LTP: 104) BUY For today's trade, long position can be initiated only in Rs.101-99 range for target of Rs107-110 with a strict stop loss of Rs.98. 

AMBUJACEM (260) has cross and closed above its immediate hurdle of 258 zones and now trading above its 35 & 50 DMA. It has snapped the losses it had made in previous session and formed a bullish engulfing candle pattern on daily chart. Relative strength index is also supporting the momentum with rising trading volumes. Thus traders can buy between 254-257, with stop loss of 250 for the upside target of 266 levels.

Positional Stock Recommendation

HDFC BANK closed Wednesday's trade on a positive note. The recent reversal in the stock price is seen post stock hits its 100 day SMA which is currently placed around level of Rs1,000. We believe 100 day SMA will continue to act as strong support for the stock and presents a good opportunity to create fresh long position on dips. On upside, stock faces minor resistance in the range of 1,090 to Rs1,100 above which, we may observe a sharp up move.

Thus, for today's trade, long position can be initiated only in Rs.1,020-1,000 range for target of Rs.1,090 with a stop loss of Rs.980.