- The markets did show a sharp bounce ahead of the last F&O expiry of the year as a mix of short covering in select stocks propped up the markets. There was selected covering in stocks like Zee and Adani Ports which are sharply down.
- The Dow gained nearly 1085 points on Wednesday and that is likely to hold sentiments on Thursday. Also a month driven by short accumulation is likely to see some aggressive covering on F&O expiry. There could be a sharp bounce.
- FIIs were net buyers to the tune of Rs.80 crores while DFIs sold Rs.(-138_ crore on Wednesday. The day was marked by extremely thin trading volumes with most of the foreign investors likely to be back only next year.
- A 5.9% rise in the NASDAAQ and a 5% rise in the Dow Jones gave the signal of an all round recovery rally. The Nikkei is also up nearly 4% even as the SGX is above 10,800. Short covering could take the markets higher on Thursday.
- We stay short on Sun Pharma and we also stick to our earlier targets of Rs. 360 for the stock. We also play Zee short on every rise and have an eventual target of Rs.370 on the stock. Play these stocks on the short side.
- With oil at below $55/bbl in the Brent market, it is time to again cherry pick aviation stocks. Jet Airways at around Rs.270 looks ripe for a bounce closer to Rs.330 in the next one quarter. Buy with appropriate stop loss.
- Among the oil service companies, Selan Exploration is a good bet at the price of Rs.175 and has upside targets of Rs.225 in one quarter. The company is also reasonably priced in P/E terms, valued at just around 6.2X.
- Thursday could see another bounce in the markets on the back of a strong US recovery and short covering on expiry day.
