Markets vaulted to new highs on Friday — the last trading day of the week ended — on the back of a strong speculation of the NDA getting closer to majority. Both the Sensex and the Nifty soared by 2.6 per cent to close at 22,994 and 6,859. With the Lok Sabha elections coming to a close on May 12, the exit poll results would influence markets till May 16, the day of actual results. According to old timers, investors should not take their investment decisions in haste based on exit poll results, as they have been proved to be wrong in both the last two parliamentary elections — in 2004 and 2009.
Focus of the market players will be on polls, IIP data and CPI numbers. Expectations are that CPI would be a dampener and would restrict RBI from easing interest rates. For the week ahead, chart-ists predict a trading band of 22,600 and 23,400 for the Sensex and 6,700 and 7,000 for the Nifty. Immediate supports are at 22,700 and 22,500 and 6,775 and 6,700. Don't believe when market goes into terrible gyrations its rules have changed.
Stock Scan
TVS Electronics Ltd provides transaction automation IT products and solutions in India and internationally. It engages in the manufacture and sale of computer peripherals. The company’s products include impact matrix printers, thermal printers, specialty printers, label printers, POS systems and accessories, key boards, scanners, and cash registers. It serves retail, manufacturing and logistics, BFSI, healthcare, hospitality, and government sectors. Turnaround performance and rumours of an MNC taking equity in the company has triggered buying in the counter. Buy for a surprising target of Rs 50 in the medium term.
Camphor & Allied Products Ltd manufactures and sells terpene chemicals and other specialty aroma chemicals in India. The company offers various fragrance chemicals and pharmaceutical products. It also provides industrial chemicals consisting of alpha pinene epoxide, alpha campholenic aldehyde, camphene, camphor, camphor oil and others. The company’s products are used in various applications in industries, such as flavors and fragrances, pharmaceuticals, soaps and cosmetics, rubber and tire, paints and varnishes, and others. Buy on declines for a target price of Rs 400 in the medium term.
F&O
Hopes of a favourable outcome in the elections triggered a renewed speculation in the derivative segment. A sharp jump in VIX and open interest reflect the frenzied trading activity. Option segment is witnessing a strong buying out of the money calls and puts suggesting punter bets on a wild move on either upside or downside.Barring pharma and IT nearly all the sectors witnessed strong gains. High beta stocks were speculators favourites. Private banks saw a strong buying interest. Stay invested in ICICI Bank and Kotak Bank.
Power stocks are back in reckoning. Punters suggest a ‘big’ move in Reliance Power to Rs 100 levels in next few weeks. A renewed buying was seen in capital goods counters. Stay invested for present in the sector for further gains. Select metal stocks are likely to outshine others. Buy on declines Hindalco and Tata Steel. Stocks which look good are ACC, Adani Enterp-rises, BHEL, Bharat For-ge, IDFC, ICICI Bank, JP Power, LIC Housing, HDIL, CESC, RIL, Kotak Bank, Reliance Power and Tata Steel.
