Pre Open Thoughts: Appetite Picking Up!!

Pre Open Thoughts: Appetite Picking Up!!

Ø To succeed, jump as quickly at opportunities as you do at conclusions. The market will hope nothing goes wrong soon. For now, world markets are breathing little easy now. May be the law of averages is likely to catch up with our markets. The icing on the cake is that Moody's upgrades India's rating to investment grade. Banks will continue to be in focus post this news. The upcoming results season will turn out to be better than expected? Is the big question to answer…

Ø In the meantime the biggest trigger could come from the RBI at its January 24 policy meeting. The buzz of an impending CRR cut has been doing the rounds for quite some time. What the central bank says about the outlook on interest rates will also be crucial.

Ø The frontline Indian indices are likely to shoot up at start after as Rupee has recovered some of the lost ground of late which in turn have; FIIs steadily increasing their bets on the Indian equities.

Ø The Indian market is set to get an early boost from a powerful rally on Wall Street & European markets. Asian indices are mostly higher.

Ø According to Our systems Nifty has managed to close above the crucial level of ~4850. We expect the positive trend to persist and this time it will stick and we can move much higher. However, profit booking is not ruled out around 4900 levels. Q3 results will continue to drive sentiment; so, stock specific action will continue to hog the limelight.

Trading Idea: DLFU Buy (Target: 205)

Ø DLF has recorded highest volume in last 2 years. Stock is Near to its 52Week low which was at 174.50.

Ø Recently DLF has also sold its entire stake in an IT SEZ in Pune to Blackstone for Rs8.1bn. Separately the company also sold Aman Resorts which is likely to be sealed in 4QFY12. As a result of these 2 transactions Net debt could fall by Rs 2,000cr at end-FY12.

Ø From Futures Perspective Open Interest is almost Near 52 Week High; Assuming so much negative news in the whole realty sector we feel everything is priced in.

Ø According to our analysis we suggest going LONG on DLFU at CMP 185 with Stop loss of 174.50 and target of 205.i.e almost 11% upside.