Stock Recommendations

SENSEX (26555) BSE Sensex opened positive and rallied more than 300 points in afternoon trading session but failed to sustain above 26700 levels as selling in the broader market erased most of the gains and settled the day with the gains of 161 points. Now till it doesn’t hold back above 26700 zones, weakness may continue as it has broken its multiple support zones. On downside it has next support near to 26300 and below that fresh selling may be seen towards 26000 levels, while on upside if it manages to hold above 26500 then only a relief rally may be seen towards 26750-26800 zones.

Stocks In Focus

Atul Auto surged over 5% in trade yesterday. The stock has been under the weather in recent months in tandem with the general weakness in the market and unseasonal rains in 4Q impacting the company’s quarterly performance. 

However, we remain positive on the stock. Currently, Atul Auto has a total of 200 primary dealers and intends to grow by 25-30 dealers every year. It has an existing capacity of 48,000 nos. per annum, which can be bottle necked and raised to 60,000 nos. Additionally, the company intends to double its existing capacity by FY17E. 

We expect Atul Auto to register earnings CAGR of 18.4% over FY15-17E. Also, the launch of petrol variant can be a game changer for the company, as it has the potential to open up huge domestic as well as export opportunity. 

Thus, we recommend a BUY on the stock with a Target Price of Rs.601.

INTRADAY PICKS

TVS MOTORS (LTP: 227) SELL For today's trade, short position can be initiated only in Rs.230- 233 range for target of Rs.222-218 with a strict stop loss of Rs.235. 

SKSMICRO (LTP: 433) BUY For today's trade, long position can be initiated only in Rs.426-423 range for target of Rs.445 with a strict stop loss of Rs.420.

TECHNICAL PICKS

Asian Paints, failed to trigger in yesterday's trade and still continues to exhibit extreme weakness with stock closing and sustaining below its 200 day simple moving average of Rs.747 since past few trading sessions. Stock now has multiple resistances in the range of Rs.740 to Rs.760. Negative cross-over in MACD combined with RSI below 50 mark indicates underlying weakness in the stock. Minor bounce back in short term due to oversold nature of the stock, exhibited by Stochastic, below 20 mark is definitely not ruled out.

Thus, for today's trade, short position can be initiated only in Rs.720-740 range for target of Rs.650 with a stop loss of Rs.760.