Pre Closing Trading Strategies September 03-08, 2012

The trades are there for those with a little committed trading capital as Banks hit 9850 on the banknifty this time with Axis and the Big 3 winding down positions and European yileds hit ting the high note for International investors to accumulate ahead of the pre holidays liquidity exercise. the Euro has in fact already started down from the above 1.26 levels on the weekend, a little slow in the short US week that started yesterday IDFC apparently will go baclkk to 123, YesBank is already at 330 and Axis is now trading at solid supports at 933 but buying interest and the expected fundamental reform  except for the diesel price hike which will apparently amount for more than INR 1.1 B or 20% of the daily losses being incurred by the Oil marketing Companies this year. 

The loss on Diesel is Rs 17 per liter and on Gas Rs 347 per cylinder. Goldman Sachs sell side has obliged with trading buys on the weaker BankNifty members but it is more likely that the Big 3 and Axis will start the up move around the corner and it will pay to buy into Ais, HDFC Bank and ICICI Bank at all levels as also Jubilant Foods, Bajaj Auto and ITC which has finally settled up at 270

Mining has begun is A grade mining companies in karnataka pursuant to a Supreme Court order and more action is expected as action shifts from allocation to production in Coal mines and the Land Reform bills and others with the government /parliament. 

Parliament’s close may not be the desired catalyst for the Diesel price hike though.

Beaare of the Bharti rerating in process as the current positive bite is pursuant to an incomplete rerating and may not be a good indicator. Same goes for Kotak Bank which shows YTD gains only on a bad pummelling in the previous Calendar year and is not changed up in prospects nor able to work the new banking guidelines virtually killing expansion for the bank and MNC banks reclaiming retail market share sooner than later in urban areas. 

 

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