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Posts Tagged ‘Infosys stock’

NIFTY set to cross 5000

Thursday, September 17, 2009 2 comments

With global equity markets picking momentum again, NIFTY is set to cross 5000 today. When this upmove started, 5100+ was the level I had in mind( had shared this with my subscribers).  Going beyond this level is not impossible and my sense is that we might stay above this level in the coming weeks and months.

Coming back to stocks, a switch to large caps has proved fruitful. We made spectacular gains in the likes of Tata Steel and SBI. Also metal stocks like Hindalco and Sterlite have done well. And do not forget about auto stocks (Hero Honda, Tata Motors,Maruti and Ashok Leyland)! Did you notice how Infosys is leading from the front? In 2007, we had avoided Infosys and in this bull run we are riding it right from the beginning!

This is a particular characteristic of stock trading- when you are winning, you get a lot of winners. This is what is happenning right now. Also when moves begin to go bad, you can also get a string of losers. That’s why it is important to have proper risk management in place to control the leverage and survive the unfavourable times.

If this bull run resumes, one has to make the tactical move of rebalancing the portfolios. My sense is that this is not a bull market where every stock will move. So pick your winners carefully. You don’t want to be caught in the wrong stock at the right time. Also you don’t want to be in the right stock at the wrong time.

If this is the beginning of another multi year bull rally, then you have to position yourself right now. Also, avoid the temptation to do intraday trading. Catch the big moves!

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Bulls defend their positions

Wednesday, August 12, 2009 Leave a comment

Volatility was the only constant in today’s markets. The markets opened down, went further down till 4350 before bulls managed to bring it back to a respectable closing. The final the damage was only about 15 points on the NIFTY with a closing of 4457. It is becoming evident that bulls are doing their best to defend their positions

Does this mean that markets have again turned bullish?

I’d still have my doubts till we make a 100+ point upmove on NIFTY, say tomorrow (May be take cues from US markets that are 1.5% up as of now). 4500-4550 is a range that will invite a lot of selling from the bears again, so it might make sense to be cautious and book partial profits around this area. Take fresh positions only if markets make a convincing move upwards without much intraday volatility.

As far as individual stocks are concerned, I’d stick with the stocks that are in a firm uptrend. I’d also use this rally to get rid of junk stocks in my portfolio. I still see a lot of participation in stocks like Suzlon,Unitech and RNRLs of the world. One must understand that these stocks are very vulnerable on the downside. Any hint of correction in the markets will bring them down sharply.

And as always-manage your risk properly. Leveraged positions are not advised in these highly volatile markets. As a trader our job is to pick the right spots to buy and sell rather than try to catch each and every move.

If you are a long term investor, use sharp correction in stocks like Asian Paints, Hero Honda,Wipro,Infosys and Maruti to accumulate. Sticking to large caps might be a better option than small caps. For you 4000 level is the critical level to watch.

Market correction continues but Infosys,TCS shine

Monday, August 10, 2009 1 comment

Today was a yet another volatile day with bears finally managing to get better of the bulls. The opening was expected to be strong on strong global cues but the bears has their first pound of flesh in the morning when they outsmarted the bears.

The bulls did try to make a comeback in the afternoon but every high level was met with renewed selling. The NIFTY finally closed 1% lower at around 4440.

It has left all of us wondering -What next ? (This is the only question investors worry about!)

It might be better to divide the market outlook into long term and short term.

In short term- bulls are in real trouble and unless 4380-4400 holds on the NIFTY, it might be very difficult for bulls to recover. Below 4380, this market can slide another 3-4% in no time, with individual stocks correcting 5-8%. On the upside, bulls need a decisive move up (in a day or two) which takes the NIFTY past the 4500 level.We can then be sure about the resumption of the uptrend.

So if you are short term bull, manage your risk properly.It might be better to cut losses than regret later.

In the longer time frame, the upward trend still remains intact and will remain so till we manage to float above the 4000 mark. At the same time, there is a high probability that this markets goes into a sideways mode without making any decisive moves.

Looking at the bigger picture- the renewed threat of bad monsoon has made some investors a bit jittery. It is a fact that bad monsoons affect the rural consumer sentiment in a big way. On top of it, this also means food scarcity and food inflation. And  no stock market investor likes the prospect of lower growth and higher inflation at the same time.

Coming to individual stocks-Infosys was the star of the day. I have been emphasising that Infosys and the IT pack might be the leaders in this rally. I’d advise evry longer term investor or trader to accumulate the stock. Same is true for TCS, Wipro or Satyam, although they are a bit more volatile than Infosys.

Another star was the category of sugar stocks like Balrampur Chini.These stocks might continue to do well if monsoons fail and sugar continues to trend up.

Lastly, Cipla continues to do well. It was another star of the day.

Going forward- I’d be keeping a good eye on the commodities sector. Steel,alumnium,zinc and copper stocks might rally in a big way as soon as expectations for global growth return. So keep Hindalco and sterlite on your watch list.

Oil is slowly and steadily creeping up. This means keeping a close eye on RIL and Cairn India. It might be best to stick to the leaders in each sector.

This also means that we have to avoid a few sectors. Real estate is one sector which needs to be avoided. The sector is over owned by the retail investors and stocks have gone into a sideways or a downtrend.If there is any scare of interest rate rise in the system, these stocks will be hit really hard.

another sector to avoid might be telecoms. Both Bharti and RCOM are not looking great on charts. Bharti in particular looks vulnerable in the short term with critical supports around the 370 area. Short term traders might do well to avoid this.

Auto stocks like Maruti can be picked up if they become available at around 1000. The stock is still in a strong uptrend and remains a good pick.

So if you are a new investor, you might do well to be a little patient. If you are a momentum trader, it might be prudent to get out on trend reversal. If you are an intraday trader, you might continue to suffer with your mind preocccupied with guessing the next moves!

Is Infosys going to lead this rally?

Friday, July 24, 2009 4 comments

It looks like INFOSYS might finally come out of slumber and be the face of this rally. Despite all the negative news about the IT sector, the stock is trading at new highs.(around 2000)

If we look closely, Infosys is finally manging to get deals in the domestic IT space and going by the trend, e-goverannce spend might be huge in coming years. So markets might fancy this stock despite tough US conditions.

Watch out for this old darling of stock markets. There is a good chance that this is an outperformer in the coming months.

INFOSYS and TCS still falling!

Tuesday, August 21, 2007 9 comments

INFOSYS and TCS continue to fall and hit fresh lows. Looks like they are the main “culprits” in bringing the index down.

Thats why don’t “assume” anything in the markets. Earlier analysts were saying that it is because of “rupee strength”. Now rupee has bottomed out, but still these stocks continue to fall. Now what is the latest reason?

Yes- you got it right.Now it is the ‘fear” of growth slowdown in the US!

The stock has fallen from 2400+ levels to 1800 odd levels and who knows where this downturn might end.

Reasons don’t matter-price does.As they say “the screen never lies”.

Read the “INFOSYS Trend analysis” and INFOSYS- A fundamentalist view” posts to get a fresh perspective on this.

Also read “After Wipro-Is INFY next?”.

Markets- Volatility is the only constant!

Tuesday, August 7, 2007 Leave a comment

Volatility seems to be the current “theme”. One day up and the next day down. As the magnitude of upward movement is less than the magnitude of downward movement,net net it is drifting down.

On NIFTY watch for 4400, 4430 and 4455 levels. These are strong resistance levels.

Individual stock continue to shine. SBI a stock which has been trending up nicely is a star .SBI, Kotak Mahindra Bank and Karur Vysya Bank remain core banking stocks in the portfolios. UTI is consolidating beween 600-650 levels, so it is on the scanner. Infact it might not be a bad idea to go short on ICICI and long on SBI (a pair trade)

And watch PUNJ LLOYD, you might not want to miss this beauty. I had mentioned this stock last week.Today it is finally breaking out. This stock can be a likely outperformer. As a disclosure, I hold the stock in my personal and client portfolios.

Yesterday was also a time to nibble a few favourites like ABB around 1060 levels ,Reliance around 1750 levels and RCOM around 525 levels. Bharti is next on radar.These are strong supports ,so it was not a bad idea to accumulate.No aggressive buys though.

At the same time the short sells on NIFTY,CIPLA, Tata Motors and Infosys are providing a good enough hedge for the downside. I am personally advising people to stay away from short term trading and stay in cash.Risk management shall be the key to your long term success.

As I have said before, play like a Dravid and not Dhoni. The playing conditions are difficult. Don’t get too adventurous.

Countertrend Ideas-Short term

Thursday, August 2, 2007 2 comments

Long:

Infosys has a strong support around 1900. You can play for bounce around these levels.

ICICI bank around 890.

TCS around 1100.

RCOM around 530 .

For short:

Maruti around 860

CIPLA around 191-192

Play with tight stop losses. Markets continue to to be volatile. You might not want to be “brave” and burn your fingers.When in doubt, stay “out”!