Feb 20, 2017

Chart Of The Day : DR.REDDY'S LABORATORIES LTD. Buy/Sell/Hold? Short - Mid Term View 20 Feb 2017 For Trading Positional Technical Analysis Recommendation

Dr.Reddy's Laboratories Ltd.

You can clearly see the 300 level as the support and 3300 level acting as resistance level since November 2015 crash in the stock price.
The pharma sector is passing through a turbulance like the IT sector and the PE multiples are also not expensive. But for the short term as a technical research follower traders sell what is weak and buy what is strong we we are short on both sectors unless the entire sector outlook is changed from one of doom to optimism which does is not in sight anytime soon.
A price of 2500 looks imminent on Dr. Reddys.
Its in derivatives, so you can sell Call Option or Buy put option or sell futures counter.
Any one want to put small SL can put it above 3200.
A worsening investor sentiment and sell off in the entire sector can take the stock to 1800 where it will find support.

PS : Beware of the recent spurts in individual pharma stocks.
Attached : Monthly chart spot market. Daily chart Futures market.

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Feb 17, 2017

Chart Of The Day : SAIL/STEEL AUTHRITY OF INDIA LTD. Buy/Sell/Hold? Short - Mid Term View 17 Feb 2017 For Trading Positional Technical Analysis Recommendation

Sail or Steel Authority Of India Ltd.
Recommendation: Strong buy
Duration : Short, Mid Term, Possibly long term as well.
While the fundamentals of the steel sector and that of the particular company are improving, it will be a detailed subject of explanation so we will limit ourselves to the recommendation and some technical analysis.
The stock has bottomed out around 35 levels from February 2016 from where the present rally in stock market has started.
After steadily rising with a clearly visible rising trend-line, the stock gave breakout with new yearly high in last month by crossing 55 levels. Which is now a support level only.
On monthly chart also the stock is looking excellent and a level of 100 is not far. And crossing 100 will take the stock into new bull market and levels of 300 are possible.

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Feb 16, 2017

Chart Of The Day : Castrol India Ltd. Buy/Sell/Hold? Short - Mid Term View 16 Feb 2017 For Trading Positional Technical Analysis Recommendation

Castrol India Ltd.

The Chart here is of futures segment
View: Neutral to bearish
Target-365, below 360 further decline possible. But  buying will emerge as the company is an MNC bluechip. Only short term short selling positional trading recommended with booking profits as you get.

The stock has not made any new high or shown exciting movement since Dec 2014, so we conclude that it is not in a bull market and in a sideways market as it has been in range of 360 - 520 since then.
The stock has formed a clearly visible and highly reliable multiple head and shoulder pattern.
While on the Weekly charts also, it is trying to form head and shoulder formation and formed a bearish candle stick pattern called Evening Star provided it closes this week lower around 410 or below which it looks like.

Feb 7, 2017

Impact of Donald Trump on Indian Stock Markets / Companies / Sectors

Possible impact of Donald Trump on Indian Stock Market
Which Sectors Will be affected positively or adversely due to Trump Presidency
Impact of Donald Trump on Indian Stock Markets / Companies / Sectors

These days some stock traders are following Twitter more than macro data or financial statements.
When President Donald Trump tweets about a public company, the market listens. In fact, Trigger, a company started by three Cornell Tech students, has incorporated a "Trump trigger" in its app that alerts users to companies mentioned in the man’s tweets. Should this pattern continue, how should the market read the Trump tweets, and how to trade on them?
The ‘risk-on’ rally spurred by animal spirits, or Trump’s promise to “make America great again”, is now gradually pausing for a reality check on long-term implications.

The Trump Agenda
Looking into the crystal ball has just got a bit more challenging, but Trump’s broad agenda, under six broad heads : America First Energy Plan; America First Foreign Policy; Bringing Back Jobs And Growth; Making the Military Strong Again; Standing Up For the Law Enforcement Community; and Trade Deals that Work For All Americans.  
Domestically, Trump’s policies look reasonably clear – the focus is on creating jobs and increasing spending. So, if the US Congress is willing to play along, expect growth to pick up, thereby rekindling inflationary expectations, a faster pace of rate hikes and the continued strength of the US dollar.   In fact, 2017 could herald the re-emergence of fiscal spending in developed markets. The forces that drove Brexit, elected President Trump and have for long been simmering in Europe are primarily about lack of growth, leading to a lack of jobs or low-paying jobs.
These should bode well for emerging markets including India with the positives in the long-term likely outweighing the negatives for certain sectors. India could see the emergence of new export sectors and companies in the metals, engineering and industrial segments, which should be good news for the long term and for the 'Make in India' initiative.

Indian IT –
Smarter guys to weather the storm The noise and news around visa rules will impact sentiment as more Bills get introduced in the House/Senate and the Street fears changes through executive orders by Trump. The undertone of these Bills would be an increase in minimum wages, granting of higher investigative powers and changes to the visa allocation process; some bills may seek modest amendments to visa rules while a few others may ask for radical overhaul.
The entire legislative process, would nevertheless, not happen overnight (could take 10-18 months). It is important to note that increase in minimum wages for H-1B workers is applicable only to H-1B dependent employers i.e. companies having more than 15 percent US headcount on visas. Even if the competitive hit Indian companies take is limited to the 15 percent of their employees that fall under the category, they need to reorient their business models. That said, it should be borne in mind that in the long-term, raising minimum wages and driving wage inflation in the US materially above the existing market dynamics will only strengthen the case of further savings through global sourcing. In the interim, amid a steep valuation correction, smart investors should focus on business models that will survive both Trump and the tectonic shift in technology and opportunistically accumulate while the line between the men and the boys is still fuzzy.

Pharmaceuticals –
selective value at deep discount Amid Trump’s largely socialist rhetoric on pharmaceuticals, Indian companies have been second guessing the impact of the new regime on their business.
Though Indian drugmakers, supplying low-cost generic medicines worldwide, see Trump's bashing of American Big Pharma industry as an opportunity for the domestic industry, they are also cautious due to possibility of pricing pressure in their most profitable market. There are widespread fears about local sourcing clauses and higher import taxes as the US is set to promote indigenous manufacturing. Valuations of the Indian pharma sector have corrected by 45 percent over the last 18 months, mainly on the back of regulatory issues and concerns of sharper generic price deflation in the US. The industry is slowly moving towards speciality transition versus pure dependence on manufacturing cost arbitrage to survive. With generic opportunities remaining strong over the next 5 years and data indicating some stabilizing trends in pricing (despite the noise), discounted valuations might provide a good opportunity to leverage the likely relative outperformance of companies with a differentiated business model. The strength of the US dollar could provide the much-needed added competitive advantage for the export-oriented companies.

Commodities –
A beneficiary of ‘America First’ The yield on the 10-year Treasury note has climbed to 2.48 percent from the level  of 1.86 percent it was at on November 8 before Trump’s arrival, on expectations of a pick-up in inflation and real rates. Trump is expected to deliver on campaign promises that include a ramp-up of infrastructure spending and a repeal of rules that critics say have hemmed in the nation’s largest financial institutions. A reduction in taxes also has been proposed. The World Bank has taken note of the same and has predicted that if Trump’s stimulus plans are fully implemented, it could lift GDP growth to 2.5 percent this year and to 2.9 percent in 2018. A surge in US growth could provide a significant boost to the growth of the global economy. The US is still the largest consumer of natural gas and oil, and the second-largest consumer of a wide range of commodities, including aluminum, copper and lead. So the optimism on commodity companies might linger on for little longer.

Oil –
Unpredictable commodity meets unpredictable president President Trump will want to keep oil prices as high as possible (due to higher breakeven cost of shale oil) to ensure that America can keep oil jobs in the country as well as continue on a path toward energy independence. However, he has vowed to destroy ISIS. Very high oil prices wouldn’t help as oil remains a major source of revenue for the terrorist outfit. Moreover, higher oil production in the US would put a cap on the oil price rise. Hence, a net importer of oil like India might stand to gain from moderate oil prices due to the opposing forces at work in this market.

Trade and foreign policies –

The joker in the pack The rabble-rousing business tycoon’s tough trade beliefs and apparent xenophobia are least understood at this stage. In his first week in office, he directed a withdrawal from the Trans-Pacific Partnership. He has recently signed an executive order requiring the “extreme vetting” of citizens of seven Muslim majority countries seeking to enter the United States. While it still remains unclear how Trump’s trade & foreign policy will evolve, it is clear that as a seasoned businessman he will weigh the merit of every deal and shift from multilateralism to bilateralism. Donald Trump’s foreign policy might remain a black box for longer. He has showered praise on President Putin, expressed his love for China while also blaming it for much of America's economic woes. Although India considers America to be a great friend, and Trump has talked tough on Pakistan, he hasn’t quite walked the talk yet. With China overtly bolstering its ties with our neighbour, markets may have to contend with a mercurial, unpredictable friend, more difficult to understand than a constant foe.