Arun Kejriwal runs his own advisory firm, M/s Kejriwal Research and Investment Services Pvt Ltd. He advises HNIs, corporates and brokers on managing portfolios and investment opportunities.
He helps new promoters to tap the capital markets and also those who are keen to learn the nuances of the market. Equipped with a commerce and law degree, he has rich experience of over two decades in dealing with the markets.
In a week that started off on a quiet note, the Satyam announcement and withdrawal thereafter kept people intrigued and confused. No doubt, shareholder activism has picked up and shareholders lambasted the promoters, board members and particularly the independent directors.
It's an irony that this very company has received in September 2008 an excellence award for corporate governance for the year 2007. The latest market wire on Satyam was that the department of company affairs and SEBI were going to investigate the episode. Upaid, a company based out of the US, has filed a suit against the company some time back and has now requested for deposition of Satyam's key officials and said that this acquisition is towards stripping Satyam of its cash.
Markets were volatile but are consolidating ahead of the yearend. The US markets were range bound and fairly flat. The Dow Jones closed almost flat for the week losing 49 points or 0.57 % to close at 8579.11, while the Nasdaq gained 24 points or 1.56 % to close at 1564.32 points. Asian markets fared better and gained between 2% and 5%. The Nikkei gained 353 points or 4.29% to close at 8588 points. The Hang Seng gained 369 points or 2.5% to close at 15127 points.
The BSE Sensex gained 409 points or 4.22% to close at 10099.91 points, thus closing above the physiological 10k mark, after more than five weeks. The Nifty gained 156 points or 5.34% to close at 3077.50. The gains in the benchmark indices were subdued compared to the broader and sectoral indices. The top gainer was the BSE Realty index, which gained a whopping 18.66% or 397 points to close at 2525 points. It may be mentioned that of this gain as much as 242 points or 61% of the weekly gain came on Friday alone.
The BSE Consumer Durables gained 14.63%, the BSE PSU gained a similar 14.33%, while the BSE Bankex gained 568 points or 11.22% to close at 5394. There was activity in the midcap and small cap space and these indices outperformed the benchmark indices.
The PSU oil refineries did very well this week gaining between 10% and 17%, with the star being HPCL. In the realty space, Unitech did very well gaining Rs 9.95 or 29% to close at 44.25. Inflation has come down again and is expected to reduce further though the Indian consumers' weekly and monthly expenditure have not reduced drastically.
Interest rates have started to soften, crude oil has gone below the $34 mark, which is almost a four year low and the rupee after breaching the 50-mark is now closer to 47.50, a gain of 5%. All this augurs well for the markets, but the world is yet to recover from the fear psychosis of the last two quarters.
Our two picks for last week had mixed success with Union Bank touching an intra week high of as much as 171.40, substantially higher than target expected of Rs 161. Chambal gained, but failed to reach the target, touching an intra week high of 42.95.
This week will see the December series expiring on December 24, ahead of the Christmas holiday. Markets are expected to be buoyant and the optimism and change in sentiment to positive will keep the momentum going forward. Some amount of short covering and NAV propping in the next week with year-end considerations will also help.
The Sensex has support at around the 9990-10000 levels, then around the 9760-9790 levels and finally at around the 9250 levels. It has immediate resistance at last week's high of 10188 between 10185- 10195 levels, then at 10315, 10397 and finally at 10870 levels.
On the Nifty, support exists at 3040, then between 2960 - 2970 and finally at 2772. On the upside, there is resistance at 3110, then at 3150 and then at 3181 levels. Very strong resistance exists at 3335-3340 levels.
This week, I believe traders and weekly investors can look at one stock for trading/investing. GE Shipping, currently trading, at Rs 217.60 looks good to achieve a price of Rs 245-248 with a stop loss below Rs 207.
The stock has made an intra week high of Rs 231.90 last week and in the process broke through its immediate resistance of the 13-week average at the 221 levels.
All in all an interesting week with once again a positive bias this time around.
SEBI disclaimer: I have investments in GE Shipping recommended above.
The writer invites comments at firstname.lastname@example.org