We could easily see another week or two of shaky stock market behavior : Stay Short

Note: During last week of Jan'10 we have seen Nifty falling from 5200+ levels to 4700 and during the first week of Feb'10 we also saw the bounce back (you call it relief rally or pre-budget small rally) where Nifty bounce back to 4920-30 levels. Since the upside move was with low volume hence not sustainable, that is what we have seen during last few days Nifty calling back to 4850 levels.....What next? - We are expecting this correction to continue and possibly looking for Nifty levels of 4700 & below, all that possible by this month end itself or max by early next month.

Stock markets around the world are down about 10 percent since their January highs. Complacency, which was so high only weeks ago, has quickly vanished. Worries, if not outright angst, have returned. There are many worries around the globe, few are listed below....

Worry #1: Europe — Sovereign Debt Crisis
In Europe market participants are worrying about sovereign debt levels. Greece is poised for a funding crisis if left alone — as is Ireland, Portugal, Spain, and Italy.

Worry #2: China — Too Much Growth
In China, the world’s third-largest economy, an overheating economy is the main source of the current worries. And it’s igniting inflation and asset bubble fears.

In an attempt to slow things down, last Thursday the Chinese central bank tightened its reserve requirements for lenders. However, some experts feel that the government’s efforts might not accomplish much …

According to Bloomberg three firms have not revised their growth outlook for China since the change in the reserve-ratio announcement: Goldman Sachs still predicts 11.4 percent, Bank of America-Merrill Lynch 10.1 percent, and Capital Economics 10 percent. All represent sharp increases from 2009 when the Chinese economy expanded 8.7 percent.

Worry #3: The U.S. — Too Little Growth
In the U.S., pundits are worried about high unemployment, which the White House says is expected to average 10 percent through 2010. Concerns about a slow and bumpy recovery, or even a double-dip recession, are adding to a relatively dire picture.

Last year’s fourth-quarter GDP growth of 5.7 percent is treated as ancient history. And President Obama’s enthusiastically-greeted presidency is showing severe erosion.

Stock market corrections from three regions of the world explained by vastly differing reasons. Debt worries, too much growth and too little growth. Whatever story fits best to falling stocks seems to be offered by the media. But to me the current situation is typical for a correction in an ongoing, medium-term up trend. We could easily see another week or two of shaky stock market behavior. And I expect that this correction will run its course relatively soon. Thereafter, January’s highs will quickly be in jeopardy.

-JK, Lead Associate, SLT

POSITIONAL NIFTY FUT CALL: SELL NIFTY FUT AROUND 4836-4840, SL 4900, TGT 4700.

Why did we gave a sell call on Nifty?

- Looking at the chart during last 2-3 days, after making a high of 4900+ Nifty is drifting down and it seems there is no impact or no so called pre-budget rally. In such case we might see over all market falling 5-6% in next couple of weeks time. For now, we are looking at Nifty levels of 4700 below which we might see 4600 and 4400 at worst case.

Go short in Nifty future!!!

-JK

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The bull market in natural resources is still very much intact. Look for Metals & Banks Stock.

For the next three to six months, the markets will be shifting into a period of extreme volatility. It will be characterized by wild swings that will spook even the savviest and most professional of traders. One must trade with caution and strict stoploss. My favorite will be Metal stocks because the world is facing a massive shortage of basic natural resources that will, in just a few years, reach crisis levels.

• Pick any stock - SAIL, Tata Steel or JSW Steel
• Pick any stock - SBI or IDBI
• Stay with long position in Nifty Future & Options Calls.

-JK, Lead Associate, SLT

Performance update on the views given on Feb 17th

Yesterday we wrote that the short term correction is over and one can go long or look for further upside in this market. Similar pattern has been seen in the market today, we have given below the performance of our views....

•Tata Steel = Up 6.37%
•Tata Motors = Up 1.19%
•Infosys = Down 0.62%
•Buy Nifty Future at CMP with stoploss at 4700; target 5000 in next few days = Up 1.2%
•Buy Nifty 4900 Call option & hold it till expiry = In Profit.

-JK, Lead Associate, SLT

We are almost at the end of this stock market correction. Look for Metal, Auto & IT Sector!!!

Commodity-related shares rose with a slump in the dollar. The main catalyst is weakness in the dollar, which has helped propel energy, basic materials and industrial stocks higher in early trading. Look for the following stocks either in cash mkt, future or option. These stocks can help you gain in short term.....

• Tata Steel
• Tata Motors
• Infosys

During last few days there were many readers/traders asking me, Is this the start of a new Bear market Or just a typical correction? To be very frank, there was no clear answer so far but now all of my short-term indicators are telling me that we are approaching the end of this stock market correction. Although we may not be there yet, we are close. So, if you want to trade in Nifty only then take the following position....

• Buy Nifty Future at CMP with stoploss at 4700; target 5000 in next few days.
• Buy Nifty 4900 Call option & hold it till expiry.

- JK, Lead Associate, SLT

Performance Tracker [15th & 16th Feb 2010] : Profit of 85pts in Nifty future & 57pts in Nifty Option

16th Feb 2010

10:20AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AROUND 4795-4800, SL 4771, TARGET 4840/4880 - http://www.stoplosstrade.com/

11:15AM - NIFTY FUTURE IS TRADING AT 4818. BOOK SOME PROFIT NEAR TO IT AND MOVE THE STOPLOSS TO COST - WWW.STOPLOSSTRADE.COM

1:15PM - WE ARE NEAR TO OUR 1ST TARGET IN NIFTY FUTURE LONG POSITION. NIFTY FUTURE IS TRADING AT 4835. BOOK SOME PROFIT NEAR TO IT - WWW.STOPLOSSTRADE.COM

1:35PM - OUR FIRST TARGET IN NIFTY FUTURE LONG POSITION ACHIEVED.NIFTY IS TRADING AT 4841. BOOK SOME PROFIT - WWW.STOPLOSSTRADE.COM

1:48PM - THOSE HOLDING NIFTY 4800 CALL OPTION CAN BOOK SOME PROFIT AT 99, BUY GIVEN AT 75 - WWW.STOPLOSSTRADE.COM

2:54PM - INTRADAY TRADERS CAN BOOK COMPLETE PROFIT IN NIFTY FUTURE LONG POSITION AT 4830 - http://www.stoplosstrade.com/

3:20PM - THOSE WHO STILL HOLD NIFTY FUTURE LONG POSITION, CAN BOOK COMPLETE PROFIT AT 4858, CMP 4858 - WWW.STOPLOSSTRADE.COM

3:26PM - WE ARE VERY CLOSE TO OUR SECOND TARGET OF 4880. BOOK COMPLETE PROFIT NEAR TO IT - WWW.STOPLOSSTRADE.COM

3:28PM - THOSE HOLDING NIFTY 4800 CALL OPTION CAN BOOK COMPLETE PROFIT AT 127, BUY GIVEN AT 75 - WWW.STOPLOSSTRADE.COM

15th Feb 2010

8:48AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW DOWN 45PTS, ASIA TRADING FLAT, SGX NIFTY DOWN 4PTS, NIFTY HAS SUPPORT AT 4700/4720 & RESISTANCE AT 4860/4900 - TEAM SLT

10:24AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AROUND 4815-4820, SL 4791, TARGET 4840/4880 - http://www.stoplosstrade.com/

11:24AM - PLEASE HOLD YOUR NIFTY FUTURE LONG POSITION . DO NOT EXIT AT SL - http://www.stoplosstrade.com/

11:25AM - INTRADAY NIFTY OPTION CALL: BUY NIFTY 4800 CALL OPTION AROUND 75-80, SL 60, TARGET 100/115 - WWW.STOPLOSSTRADE.COM

11:27AM - CORRECTION: INTRADAY NIFTY OPTION CALL: BUY NIFTY 4800 CALL OPTION AROUND 75-80, SL 60, TARGET 100/115 - http://www.stoplosstrade.com/

1:43PM - CALL UPDATE: NIFTY FUTURE TRADING AT 4815 & NIFTY 4800 CALL OPTION TRADING AT 90 - http://www.stoplosstrade.com/

3:11PM - THOSE HOLDING NIFTY 4800 CALL OPTION CAN EXIT AT 83, HIGH RISK TRADERS CAN HOLD NIFTY 4800 CALL OPTION - WWW.STOPLOSSTRADE.COM

3:12PM - PLS EXIT IN NIFTY FUTURE LONG POSITION AT 4800 - WWW.STOPLOSSTRADE.COM

3:18PM - POSITIONAL CALL: BUY BHARTI 300 CALL OPTION (MARCH SERIES) AT 12 ,SL 8, TARGET 20, IN NEXT ONE WEEK - WWW.STOPLOSSTRADE.COM

-JK, Lead Associate, SLT

Performance Tracker [11th Feb 2010] : No Profit No Loss

11th Feb 2010

8:48AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW DOWN 20PTS, ASIA TRADING +VE, SGX NIFTY UP 27PTS, NIFTY HAS SUPPORT AT 4700/4720 & RESISTANCE AT 4810/4880 - TEAM SLT

10:05AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AROUND 4830-4835, SL 4811, TARGET 4860/4880 - WWW.STOPLOSSTRADE.COM

12:07AM - NO NEED TO PANIC. PLEASE HOLD YOUR NIFTY FUTURE LONG POSITION - WWW.STOPLOSSTRADE.COM

1:24PM - MARKET UPDATE: NIFTY FUT TRADING AT 4830, PRM OF 3PTS, NSE CASH ADV/DEC 946/331, NSE FUTURE ADV/DEC 813/562. MKT BREADTH IS QUITE +VE - WWW.STOPLOSSTRADE.COM

3:15PM - PLEASE EXIT IN NIFTY FUTURE LONG POSITION COST TO COST, AROUND 4825 - 4830. CMP 4827 - WWW.STOPLOSSTRADE.COM


-JK, Lead Associate, SLT

Performance Tracker [10th Feb 2010] : Profit of 32pts in Nifty Future & 24Pts in Nifty Option

10th Feb 2010

8:50AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW UP 150PTS, ASIA TRADING +VE, SGX NIFTY UP 20PTS, NIFTY HAS SUPPORT AT 4720/4760 & RESISTANCE AT 4850/4880 - TEAM SLT

8:28AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AT 4790, SL 4765, TARGET 4825/4850 - WWW.STOPLOSSTRADE.COM

9:50AM - NO NEED TO PANIC. PLEASE HOLD YOUR NIFTY FUTURE LONG POSITION - WWW.STOPLOSSTRADE.COM

9:55AM - POSITIONAL NIFTY OPTION CALL: BUY NIFTY 4800 CALL OPTION AROUND 85-90, SL 71, TARGET 110/140 - WWW.STOPLOSSTRADE.COM

1:22PM - WE ARE NEAR TO OUR 1ST TARGET IN NIFTY FUTURE LONG POSITION. NIFTY FUTURE IS TRADING AT 4822. BOOK SOME PROFIT NEAR TO IT - WWW.STOPLOSSTRADE.COM

1:24PM - WE ARE NEAR TO OUR 1ST TARGET IN NIFTY 4800 CALL OPTION, TRADING AT 109. BOOK SOME PROFIT NEAR TO IT - WWW.STOPLOSSTRADE.COM

2:27PM - PLEASE EXIT IN NIFTY FUTURE LONG POSITION AND NIFTY 4800 CALL OPTION AT COST TO COST - WWW.STOPLOSSTRADE.COM

-JK, Lead Associate, SLT

Performance Tracker [9th Feb 2010] : Profit of 50pts in Nifty Future & 22Pts in Nifty Option

9th Feb 2010

8:50AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW DOWN 103PTS, ASIA TRADING FLAT, SGX NIFTY DOWN 11PTS, NIFTY HAS SUPPORT AT 4680/4715 & RESISTANCE AT 4780/4820 - TEAM SLT

9:22AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AT 4760, SL 4730, TARGET 4795/4820 - WWW.STOPLOSSTRADE.COM

10:24AM - POSITIONAL NIFTY OPTION CALL: BUY NIFTY 4800 CALL OPTION AROUND 90-95, SL 71, TARGET 120/150 - WWW.STOPLOSSTRADE.COM

12:25PM - BOOK PARTIAL PROFIT IN NIFTY FUTURE LONG POSITION AT 4790 AND MOVE THE STOPLOSS TO COST - WWW.STOPLOSSTRADE.COM

1:10PM - NIFTY FUTURE MADE A HIGH OF 4814, BOOK SOME PROFIT NEAR TO IT (CMP 4810) AND MOVE THE FINAL TARGET TO 4850 - WWW.STOPLOSSTRADE.COM

1:12PM - NIFTY 4800 CALL OPTION MADE A HIGH OF 114, BOOK SOME PROFIT NEAR TO IT (CMP 112) AND MOVE THE STOPLOSS TO COST - WWW.STOPLOSSTRADE.COM

2:32PM - BOOK COMPLETE PROFIT IN NIFTY FUTURE AT 4795 AND NIFTY 4800 CALL OPTION AT 104 - WWW.STOPLOSSTRADE.COM

-JK, Lead Associate, SLT

Performance Tracker [8th Feb 2010] : Net Profit of 128pts in Nifty Future

8th Feb 2010

8:50AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW UP 10PTS, ASIA TRADING FLAT, SGX NIFTY UP 3PTS, NIFTY HAS SUPPORT AT 4630/4680 & RESISTANCE AT 4760/4800 - TEAM SLT

9:47AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AT 4750, SL 4720, TARGET 4815 - http://www.stoplosstrade.com

9:52AM - INTRADAY STOCK OPTION CALL: BUY UNITECH 75 CALL OPTION AROUND 2.5 - 2.7, SL 2, TARGET 3.5 - http://www.stoplosstrade.com/

12:45PM - POSITIONAL CALL: BUY NIFTY FUTURE ABOVE 4695, SL 4667, TARGET 4750/4800 - http://www.stoplosstrade.com/

1:12AM - UPDATE: NIFTY FUTURE IS TRADING AT 4721 AND UNITECH 75 CALL OPTION TRADING AT 2.30 - http://www.stoplosstrade.com/

1:48PM - BOOK PARTIAL PROFIT IN NIFTY FUTURE LONG POSITION AT 4735 AND MOVE THE STOPLOSS TO COST - http://www.stoplosstrade.com/

1:57PM - OUR FIRST TARGET ACHIEVED IN NIFTY FUTURE LONG POSITION. BOOK SOME PROFIT AT 4770 - http://www.stoplosstrade.com/

2:17PM - NIFTY FUTURE MADE A HIGH OF 4798, BOOK SOME PROFIT NEAR TO IT (CMP 4794) AND MOVE THE FINAL TARGET TO 4820 - http://www.stoplosstrade.com/

3:03PM - BOOK COMPLETE PROFIT IN NIFTY FUT AT 4775. THOSE HOLDING NIFTY FUTURE BOUGHT AT 4750 CAN BOOK COMPLETE PROFIT AT 4775- http://www.stoplosstrade.com/

3:06PM - EXIT FROM UNITECH 75 CALL OPTION AT COST TO COST. CMP 2.5 - http://www.stoplosstrade.com/

-JK, Lead Associate, SLT

Performance Tracker [5th Feb 2010] : Profit of 45pts in Nifty Future

8:45AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW DOWN 268PTS, ASIA TRADING -VE, SGX NIFTY DOWN 119PTS, NIFTY HAS SUPPORT AT 4710/4770 & RESISTANCE AT 4870/4900 - TEAM SLT

10:22AM - INTRADAY NIFTY FUTURE CALL: SELL NIFTY FUTURE BELOW 4735, SL 4758, TARGET 4700/4680 - WWW.STOPLOSSTRADE.COM

2:04PM - BOOK PARTIAL PROFIT IN NIFTY FUTURE SHORT POSITION AT 4690 AND MOVE STOPLOSS TO COST. OUR REVISED TARGET IS 4650 - WWW.STOPLOSSTRADE.COM

-JK, Lead Associate, SLT

Asian stocks tumble amid global recovery doubts : Fears that global recovery could slip back into recession.

Asian stocks tumbled today as ballooning European debt and a rise in U.S. unemployment claims added to fears the global recovery could slip back into recession. European stocks slid on Thursday on debt worries and U.S. markets were hurt by data showing unemployment claims rose last week.

Oil prices hovered near $73 a barrel, adding to a big slide overnight, while the dollar continued to gain against the euro, which was at its lowest since May. Investors were pulling money out of riskier assets such as emerging market stocks and commodities amid concern about the fiscal health of deeply indebted Greece, Spain and Portugal and their ability to borrow more money.

We are getting into a situation where stimulus is needed to sustain growth but governments may not be able to finance it. If that scenario materializes, there will be nothing to save the global economy from another recession. That risk has caused a lot of stress in markets.

In the United States, the Dow Jones industrial average closed down 268.37, or 2.6 percent, at 10,002.18 after briefly trading below 10,000 for the first time in three months. That came after the Labor Department said claims for unemployment benefits rose by 8,000 to 480,000 last week, disappointing investors who hoped for a decrease. Most Asian economies have weathered the global crisis with less damage than Western countries and debt levels are lower. But many rely heavily on exports to the United States and other developed markets.

The importance of the U.S. and Europe is so large that if those major industrialized economies have a risk of recession, Asia cannot escape unscathed. We see further downside in the market from the current levels.

-JK, Lead Associate, SLT

Performance Tracker [4th Feb 2010] : Profit of 23pts in Nifty Future and Loss of 6pts in Nifty Option

8:5AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW DOWN 26PTS, ASIA TRADING -VE, SGX NIFTY DOWN 23PTS, NIFTY HAS SUPPORT AT 4850/4900 & RESISTANCE AT 4950/4990 - TEAM SLT

9:40AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AT 4875, SL 4849, TARGET 4930/4950 - WWW.STOPLOSSTRADE.COM

9:45AM - INTRADAY STOCK OPTION CALL: BUY ESSAR OIL 150 CALL OPTION AROUND 4.30 - 4.50, SL 3.60, TARGET 6 - WWW.STOPLOSSTRADE.COM

10:55AM - INTRADAY NIFTY OPTION CALL: BUY NIFTY 4900 CALL OPTION AT 99, SL 87 ,TARGET 120/135 - WWW.STOPLOSSTRADE.COM

11:33AM - BOOK PARTIAL PROFIT IN NIFTY FUTURE LONG POSITION AT 4898 AND MOVE YOUR STOPLOSS TO COST, WAIT FOR THE NEXT TARGET OF 4930 - WWW.STOPLOSSTRADE.COM

1:20PM - TRAILING STOPLOSS TRIGGERED FOR NIFTY FUTURE LONG POSITION. PLEASE EXIT AT 4882 (CMP) - WWW.STOPLOSSTRADE.COM

1:33PM - SL TRIGGERED FOR ESSAR OIL 150 CALL OPTION. PLEASE EXIT - WWW.STOPLOSSTRADE.COM

1:42PM - NIFTY IS NOT SHOWING STRENGTH. PLEASE EXIT FROM NIFTY 4900 CALL OPTION AT 93 (CMP), HIGH RISK TRADERS CAN KEEP A SL OF 70 - WWW.STOPLOSSTRADE.COM


-JK, Lead Associate, SLT

Performance Tracker [2nd & 3rd Feb 2010] : No Profit No Loss

3rd Feb 2010

8:52AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW UP 111PTS, ASIA TRADING +VE, SGX NIFTY UP 28PTS, NIFTY HAS SUPPORT AT 4750/4805 & RESISTANCE AT 4870/4950 - TEAM SLT

12:03PM - MARKET UPDATE: NIFTY FUTURE TRADING AT 4933, NTPC 220 CALL OPTION TRADING AT 2.45, ARTEFACT PROJECTS IS TRADING AT 120 - http://www.stoplosstrade.com/

12:10PM - BUY JSW STEEL IN CASH ABOVE 1030, SL 1014, TARGET 1050/1070 - http://www.stoplosstrade.com/

1:22PM - BUY MARUTI AT CMP (1378), SL 1360, TGT 1400. OUR BUY CALL GIVEN ON JSW STEEL IS EXECUTED AND MADE A HIGH OF 1035.7 - http://www.stoplosstrade.com/

1:43PM - EXIT IN MARUTI AT 1380 AND JSW STEEL AT 1035 - THEY ARE NOT SHOWING STRENGTH - http://www.stoplosstrade.com/

2:27PM - THOSE STILL HOLDING JSW STEEL CAN BOOK COMPLETE PROFIT AT 1051, BUY GIVEN AT 1030 - WWW.STOPLOSSTRADE.COM


2nd Feb 2010

8:55AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW UP 118PTS, ASIA TRADING +VE, SGX NIFTY UP 32PTS, NIFTY HAS SUPPORT AT 4805/4875 & RESISTANCE AT 4945/4995 - TEAM SLT

9:11AM - PLEASE HOLD NTPC 220 CALL OPTION, NTPC FPO PRICE SET AT 201, WE ARE EXPECTING NTPC TO MOVE FURTHER, SINCE TREND IS +VE - http://www.stoplosstrade.com/

10:32AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AROUND 4880-4885, SL 4849, TARGET 4940/4970 - http://www.stoplosstrade.com/

1:01PM - NIFTY FUT TRADING AT 4880. PLEASE EXIT FROM NIFTY FUTURE LONG POSITION AT 4880 COST TO COST AND WAIT FOR THE RIGHT TIME TO ENTER - http://www.stoplosstrade.com/

-JK, Lead Associate, SLT

Performance Tracker [1st Feb 2010] : Profit of 55 pts in Nifty future & 30 pts in Nifty Option

8:35AM - GOOD MORNING, GLOBAL MKT UPDATE: DOW DOWN 53PTS, ASIA TRADING -VE, SGX NIFTY DOWN 41PTS, NIFTY HAS SUPPORT AT 4805/4850 & RESISTANCE AT 4935/4970 - TEAM SLT

9:18AM - POSITIONAL NIFTY OPTION CALL: BUY NIFTY 4900 CALL OPTION AROUND 95-98, SL 74, TGT 150/180 - http://www.stoplosstrade/

9:31AM - INTRADAY NIFTY FUTURE CALL: BUY NIFTY FUTURE AT 4825, SL 4797, TARGET 4870 - http://www.stoplosstrade.com/

9:37AM - POSITIONAL STOCK OPTION CALL UPDATE: OUR NTPC 220 CALL OPTION IS TRADING AT 4.90. PLS CONTINUE TO HOLD IT. TARGET 8/10 IN ONE WEEK - http://www.stoplosstrade.com/

9:54AM - BOOK PARTIAL PROFIT IN NIFTY FUTURE LONG POSITION AT 4860 AND WAIT FOR OUR NEXT REVISED TARGET OF 4890 - http://www.stoplosstrade.com/

10:46AM - BOOK COMPLETE PROFIT IN NIFTY FUTURE LONG POSITION AT 488O - http://www.stoplosstrade.com/

10:53AM - PLEASE HOLD NTPC 220 CALL OPTION. DONT EXIT AT SL, WAIT FOR OUR MESSAGE - http://www.stoplosstrade.com/

11:38AM - NTPC 220 CALL OPTION TRADING AT 3.40, NIFTY 4900 CALL OPTION TRADING AT 107, NIFTY SPOT 4872, NIFTY FUT 4866,NIFTY CASH ADV/DEC 1032/261 - http://www.stoplosstrade.com/

1:51PM - BOOK COMPLETE PROFIT IN NIFTY 4900 CALL OPTION AT 125, BUY CALL GIVEN AT 95 - WWW.STOPLOSSTRADE.COM

-JK, Lead Associate, SLT

NTPC FPO : The price band is yet to be declared but marketmen estimate it to be in the range of Rs 220-230 per share

[Please hold your NTPC 220 Call Option.....]

Its the first big-ticket divestment of the year. State-owned power producer NTPC will hit the markets with its follow-on public offer (FPO) in two days. The price band is yet to be declared but marketmen estimate it to be in the range of Rs 220-230 per share.

Going by this number, the government will be looking to mop up about Rs 8,500- 11,000 crore. Market players are confident that the issue will be fully subscribed even in these shaky markets.

NTPC will be the third company to be divested in the current programme after NHPC and Oil India. NHPC managed to raise Rs 4,200 crore and Oil India Rs 2,770 crore. Currently, Oil India trades at a premium of over 10% to its issue price where as NHPC trades at around the IPO price.

NTPC, in its IPO in November 2004, had issued shares at Rs 62. Today, NTPC is trading at Rs 211/share, and the company expects the FPO price to be at a premium to the current price.... At the closing price today, the company is valued at Rs 1.73 lakh crore....

NTPC currently has over 31,000 Mw of installed capacity & an additional 18,000 MW is under construction... this will make it the largest power generating company in Asia. The company currently has a debt-to-equity ratio of 0.6:1, which is much lower than the industry average....

Analysts say that if the FPO price comes in below Rs 220, it may be positive for investors....

In the pipeline
Power Grid FPO 3000 cr
Coal India IPO 3000 cr
Hindustan Copper FPO 4000 cr
HPCL FPO 5000 cr
NMDC FPO 14,000 cr

Valuations (P/EFY10)
Adani Power 46 X
GVK Power 36 X
NTPC 20 X
Siemens 32 X
Reliance Power 64 X

- JK, Lead Associate, SLT

The technical picture appears quite negative, it seems FII selloffs were tactical rather than outright panic hence we caution you ahead!!!

Market could swing between 4,600 and 5,100 within the next week. One can take any of these position to make descent gains...

1. Short Nifty future with SL 4950.
2. Buy equal quantity of Nifty 5000 call option & Nifty 4800 put option.
3. Short CNXIT & Long Bank Nifty.

Persistent selling in the past 10 sessions by the FIIs helped trigger a collapse. It seems FII selloffs were tactical rather than outright panic exits. The technical picture appears quite negative. The fall is reinforced by breadth – declines far outnumber advances. It would be prudent to expect a slide till at least 4,650 levels.

The rupee has fallen in part due to FII selling, while the RBI has raised the CRR 75 basis points without touching policy rates. The CNXIT lost more ground than the Nifty and most IT majors appear weak. In the derivatives market, the February CNXIT futures settled at a small discount to underlying. Chances are, despite the favourable weak rupee, the CNXIT will lose more ground than the Nifty in the early stages of next week, at least.

Most bank majors appear capable of a further pullback and it is likely that the sector will outperform in the early stages of next week as well. The market may have been overly pessimistic about RBI's determination to cut liquidity and it is now correcting up.

Technically, the market could swing between 4,600 and 5,100 within the next week. February usually sees greater volatility due to Budget expectations as well.

-JK, Lead Associate, SLT

NTPC 220 Call Option Update : Please continue to hold it.

We have posted on Jan 28th 2010: POSITIONAL STOCK OPTION CALL: BUY NTPC 220 CALL OPTION (FEB SERIES) AROUND 4.75 TO 5, SL 3.50, TARGET 8/10 IN ONE WEEK - We would suggest you to hold this position....

News Update: Chances of ‘Maharatna’ tag make NTPC brighter for investors

Amid its plans to hit the capital market with the follow-on public offer next week, power major NTPC is likely to get the coveted status of ‘Maharatna’, which will give it more financial and operating freedom.

Once a PSU gets the ‘Maharatna’ status, it will have more autonomy and can take investment decisions for up to Rs 5,000 crore without the government approval against the present limit of Rs 1,000 crore.

Many believe NTPC’s bright chances of getting the ’Maharatna’ status, would attract investors’ attention. The government is also planning the French auction route for the FPO. Under the French auction route, the highest bidder under the institutional cat egory (QIB) will be allotted shares.

The government is planning to divest its 5 per cent stake in NTPC through FPO. The divestment is expected to bring in nearly Rs 10,000 crore to the exchequer going by the current market value of the company.

The Secretary in the Department of Public Enterprises, Mr Bhaskar Chatterjee had recently said, “We hope to confer the Maharatna status in about 10 days... as of now four PSUs appear to be there.” NTPC, IOC, ONGC and SAIL are the four vying for the tag.

Of the 18 Navratnas companies SAIL, ONGC, NTPC and IOC meet the stiff criterion, including a three-year track record of annual net profit of Rs 5,000 crore, net worth of Rs 15,000 crore and turnover of Rs 25,000 crore, besides being listed on the bourses .

At present, top PSUs are accorded the Navratna status and there is no Maharatna status.