It is that time of the season when Foreign investors continue to increase their commitment to India albeit with direct plays in Index and stock futures. F&O positions have added on 5500 Puts and 7500 Calls ranging all trades at the 6700 bottom but for not a very big play till May 16. Also all visible indications point to Vols being a dead play at new 34 highs for the markets as markets will hope for a consolidated trade to 19 levels and anther to 45-50 levels ( ‘95% confodence call’ at 45)
Also, one must note the paucity of ‘go long’ strategies except in the index itself has finally converted into viable shorts, on Autos, on Sun Pharma and most noticably on HCL Tech led IT satraps with HCLT finally running a beckoning red line down 50 points in a sesion with room for more. Infy ofcourse is already close to bottoming out and is not really running on short fuel at 3150 levels but that would allow HCLT to come back too early too and that is unlikely. HCL Tech shorts thus carry the week with them at least till today and tomorrow sessions in full jest as PSU banks provide a final exit for the on street traders or the commodity rich HNI versions there of with leveraged margin portfolios finally catching a break as Canara Bank and Unitred post good recovery dataa on the back of another sterling recovery income schedule from IDBI. While IDBI actually recovered more than INR 10 Bln from defined NPAs in the single quarter, Canara Bank reduced Gross NPAs from 2.5% to under 2% and United lost all its INR 10 Bln in losses in a bad Q4. United however has already been caught from all signs even before the call auction trades were over for the fudge not effecting any new realties
Credit Suisse seems ready to admit it had a couple of bad picks and you should get out of Emami nevertheless. Exide’s ING purchase is also unlikely to interest markets as the life co is not really making new business apart from the run of renewal premiums that makes 60% of its income for the period. In sum all mid cap plays including CESC and JSW Energy actually remain shallow market stops that can easily turn into traps and as with markets across the seas, Large Cap Blue chips remain the rush hour excuse for staying in the markets.
Hopefully, energy stocks will be able to keep the indices afloat as market darlings like YES and IDFC continue to fall to create room for a good upsurge back to 475 and 130 levels with Infrastructure definitely a priority for the new government again likely to stay in for 10 years once the job of government making is completed.
Axis and ICICI Bank still remain on hold in most trader portfolios, waiting for the earnings trigge r to take the market surge to 6800, with Glenmark, Bharti and ITC making suitable power plays to sub for Biocon, Maruti and others like Tata Steel unlikely to come back in this Fiscal. Power NBFC trades may not wait for a post election play either.
I do not have the handle on the Hindalco surge so I would guess it is just a retraction of financing plays fromt he erstwhile bellwether. Markets are closed in Asia as the US markets completed a Monday fact check and recovered towards the end
Stay short in HCL Tech, for a target of 1250. Bajaj Auto has also not completed an aborted long play to 1950 levels after having started well on end of month data and will remain positive, making another transition to investor portfolios while remaining a strong trade candidate