Stocks Recommendations

SENSEX (27206) BSE Sensex opened positive and traded inside the range of previous session. It witnessed a lot of intraday swings throughout the day as it hit a low of 26948 levels but finally managed to settle the day above its 27000 mark with the loss of 45 points. Now index needs to hold above 27200 levels to continue its bounce back move towards 27500 and 27800 levels while on the downside, support exists at around 27000 and below that bears may again drag the index towards 26800 and 26500 levels.

STOCK IN FOCUS

Mindtree closed 5.4% higher yesterday, on 1.7x its 2-week average volumes. Based on strong contract TCV booking for Mindtree as well as greater penetration in Europe (top-10

outsourcing service provider in EMEA by ISG), growth visibility is high. Mindtree’s management has undergone a re-alignment and the company has formed Digital Solutions group as well as Platform group; utilization increase is expected to mitigate visa cost headwind ahead. While energy, telecom and insurance are expected to lag the company’s average growth, revenue growth for FY16E is expected to beat NASSCOM’s industry growth rate for the same period. We expect US$ revenue/EPS to grow at 15.8%/17.7% CAGR over FY15-17E and maintain our positive stance on Mindtree with strong digital accelerator (32% of revenue), growth visibility based on strong TCV trend, utilization lever and increase in dividend payout (27% in FY15 from 18% in FY14). 

We have a Buy on the stock with target of Rs.1,600.

INTRADAY PICKS

Crompton Greaves (LTP: 173) BUY For today's trade, long position can be initiated only in Rs.169-167 range for target of Rs.180 with a strict stop loss of Rs.164.

Divis Laboratories (LTP: 1763) BUY For today's trade, long position can be initiated only in Rs.1730-1720 range for target of Rs.1780 with a strict stop loss of Rs.1710.

IGARASHI has been consolidating from last three weeks but taking multiple supports near to its 50DMA. It is forming a small triangle pattern on daily chart and holding above 427 may see fresh buying interest towards 440 and higher levels. The medium term trend of the stock is positive and after the recent consolidation it looks attractive for next round of positive movement. Thus traders can buy the stock between Rs.410 to 415 with stop loss of 406 for the upside target of 430 levels.

BHARATFORG has recently taken multiple support at 1200-1220 zones near to its 50DMA. It is moving after the consolidation of last five trading sessions and holding the gains above 1275 zones. Now it has to hold the current levels to continue its positive movement towards 1325 and higher levels. Traders can buy the stock between 1268 to 1280 with stop loss of 1249 for the upside target of 1325 levels.

Technical Stock Recommendations

Hindustan Petroleum reversed from all-time-high and slipped to three and half month low in very short span of time. Negative cross-over of 20-days EMA & 50-days EMA, falling RSI (14,9) and MACD (12,26,9) are also signaling weakness in the stock. Despite a recent rebound, our short-term technical view will remain negative. However, fresh short position can be initiated on only bounce back for the better risk rewards.

Thus, for today's trade, short position can be initiated only in Rs.610-620 range for target of Rs.525 with a closing based stop loss of Rs.645.