Spooked by the lower than expected earnings guidance of Infosys, macro economic data and choppy global markets — spectacular intra-week gains evaporated on the last trading day and markets closed on a weak note during the week ended.

On the BSE the Sensex ended 65 points lower at 19,387 and the Nifty on the NSE closed 17 points weaker at 5,824. The midcap and smallcap indices logged 0.5 per cent gains but sentiment turned negative on short term concerns. Poor Infosys guidance, weak IIP numbers and inflation data acted as dampeners. ‘Bad’ start to the earnings season has put ‘bulls’ on the back foot. Concerns of fresh rate hikes by RBI are back due to the high inflation.

As the results of major companies get into high gear, stock specific movements are predicted in markets. Eurozone sovereign debt problems, Japanese nuclear radiation issue and high crude oil prices continue to drag down global investor sentiment. Avoid becoming complacent and protect profits by trailing stop loss.

For the week ahead chartists predict trading range of 19,050-19,750 for the Sensex and 5,715-5930 for the Nifty. Key short term supports for the indices are at 19,200 and 19,040 and 5,770 and 5,720. Keep an eye on the 200-day moving averages at 19,070 and 5,725. Initiate fresh positions only if indices cross last week highs. It is results season. Make the ‘must’ periodic reappraisal of all your investments to see whether changing developments have altered their prospects.

FUTURES & OPTIONS
Volumes were on the lower side for the better part of the week ended in the derivative segment. However surge in speculative volumes was seen in line with the wild intraday gyrations in Nifty. Open interest and put/call ratio indicate overbought market. Further correction in near term not ruled out say punters.

Disappointed by results of Infosys traders were seen shorting technology counters. Below Rs 2,950 level Infosys may slide to Rs 2,600 level feel company observers. Savvy players advise caution in ‘blind’ shorts. Contrarian buying suggested at lower levels in TCS, Polaris and Oracle. Infrastructure stocks continued to witness good buying at lower levels. Accumulate on declines JP Associates and IVRCL. Capital goods counters ABB, Crompton Greaves and L&T look good for further gains from current levels. Renewed buying was seen in select FMCG stocks on expectations of price hikes of their products.

Buy on declines ITC, HLL and Dabur. Range bound movement seen in banking counters. Steady buying seen in YES Bank, InduSind, Canara Bank, UCO Bank, DCB and IFCI. Hold positions for gains in short term. Four-wheeler Auto stocks are showing signs of tiredness. Book partial profits in Tata Motors and M&M at current levels. Two-wheeler stocks may perform better in near term. Stay invested. Among the stocks looking good are Mercator Lines, Educomp, Bhushan Steel, Sintex, Tata Communications, Bharti Airtel, Havells, Cummins and GSK Consumer.

Whatever is hard to do in the market is generally the right thing; and whatever is easy is usually the wrong thing to do. Never average a loss. This is one of the worst mistakes a trader can make.

STOCK SCAN
Riding the boom in precious metals Thangamayil Jewellery Ltd has reported impressive growth of more than 70 per cent for the last five years when compounded annually and cash profit has also shown CAGR of 78 per cent. Despite the cyclical nature and working capital nature of the business the stock looks good bet for investors with higher risk appetite. Buy for target price of `265 in short term.

Zydus Wellness Ltd is a leading manufacturer of healthcare, nutrition and cosmeceuticals that cater to changing active lifestyle of present day. The leading brands of the company Sugar Free, Nutralite and EverYuth have shown very good sales growth in the past few quarters. New product launches are expected in the next few months to increase the product portfolio. Buy on declines for target price of Rs 850 in next few months.

Avanti Feeds Ltd is the leading manufacturer of shrimp and fish feeds in the country. Union Frozen Foods of Thailand the world’s largest sea food manufacturer has picked up significant stake in the company and is reportedly keen to hike it further. Excellent turnaround performance in the last three quarters has put the company on the radar of savvy investors. Buy this turnaround counter for doubling returns in medium term.

It is results time again. Sources indicate that Vishnu Chemicals, Andhra Petrochemicals and Pitti Laminations will continue to improve their good performance shown in the last few quarters. Good accumulation in the past few weeks indicates possible ‘spurt’ in near term.