- After the sharp fall in early trades, the Nifty recovery in the last hour was largely aided by ONGC and Reliance Industries. However, the A/D ratio of the Nifty was still skewed heavily in favour of the declines.
- We suggest that traders and investors should be cautious of buying corporate governance cases on dips. We have seen such dips in stocks like Zee, Dewan Housing, Yes Bank and Vedanta. Avoid investing in such stocks.
- FIIs were net sellers to the tune of Rs.(-112) crores while DFIs sold Rs.(-65) crore on Monday. The FIIs will be keen to watch out for the RBI monetary stance later this week but India remains at the higher end of the MSCI AFPAC valuations.
- The NASDAQ was higher on Monday on the back of a rally in technology stocks. Markets across Asia and Europe were flat as Chinese markets were closed. The SGX is now trying to make headway beyond the 11,000 mark.
- We suggest using rises to sell all the corporate governance cases like Yes Bank, ICICI Bank, Zee TV, Dewan Housing etc. Most of these stocks are sell-on-rises stocks and any long term investment on these stocks is not advisable.
- One can look at seriously buying into ONGC at the price range of 140-145. With crude prices steadying, ONGC represents a good bet as it values at a much lower crude realization. Dividend yield could also be a positive.
- Among the pharma plays, Biocon looks a good bet at around the Rs.650 mark on the back of better traction on their core business as well as the SOTP benefit of its stake in Syngenta. One can target Rs.750 on the stock.
- The level of 11,000 on the Nifty should remain a resistance for the Nifty. A lot will depend on banks, autos and oil to lead the market higher.
