Cummins India - Value Pick - Bonus Update

Stock Update – Corporate Action

 

 Cummins India - Accumulate                  Adjusted  Price    439                                                 Adjusted  Target   621 

Cummins India Ltd had announced on 12th Sep, 20011 that 21 Sep, 2011 has been fixed  as Record Date for the purpose of issue of fully paid Bonus Equity Shares in the ratio of  2:5.

We maintain our positive view and recommend to Accumulate for 18-24 months. Stock is  now quoting at Ex-Bonus hence our adjusted target price is 621.

Recommend Price (Cum-Bonus)             = 614 Rs.

Adjusted Reco. Price (Ex - Bonus)         = 614* 5/ 7= 439 Rs.

Therefore

Original Target Price ( Cum – Bonus)             = 870 Rs.

Adjusted Target Price ( Ex-Bonus )               = 870*5/7 =621 Rs.

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Daily Fundamental Snippets - 21/09/2011

OUTLOOK

 

Today global markets are in negative terrain and our markets may see dull opening for the day.

 

The weakness in the rupee has helped the markets yesterday, but the outlook will depend on the news flow from the global markets such as the FOMC meeting and the Greece deadline.

 

The market will watch out for cues from a two-day meeting of the U.S. Federal Reserve that ends on today will also have bearing on teh sentiments in coming days.

 

The next big catalyst culd come from positive policy action or some softening of inflatrion. Corpoarte earnings next month will also be a key to near term direction for the markets.
We continue to remain cautious on markets.

 

Our value Pick Zylog Systems initiated at 418 for a target of 519. The stock was moving yesterday mainly on weakness of rupee which is beneficial for the IT stocks and which offsets the concernss of lower revenue beacuse of worries in global markets. Zylogs majority of the revenue comes from global sales which is mainly in dollar terms. The company is also among top 500 tehcnology innovators across America.
Promoters have also incresaed thier holding in August which shows business confidence in the company. We have a positive outlook for the company. 

 

 

 

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Derivatives Strategist 21 September 2011

Market Outlook

 

Nifty future recovered loss of last two trading sessions and seen strong up move led by short covering towards 5165 levels. On option front, maximum Put OI is now shifted at 5000 strike. If Nifty future sustains above 5175 levels then it may move up towards 5220-5250 levels. On downside if it fails to hold 5100 levels, then selling pressure may get intensified in the market towards 5000 levels. Now 4900 levels would be immediate strong support for the market.

Derivatives Calls : Buy Bataindia and Lupin Labs

 

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First Morning Technical Call_21092011

Market Outlook:

S&P CNX Nifty yesterday witnessed sharp pullback rally by taking support around 5040 levels and fast momentum was seen above 5100 levels toward the 5150 levels which is also the immediate hurdle for the market being the trend line from 5204 to 5169 levels. Nifty is also making Inverse Head & Shoulder pattern formation on daily charts and the neck line lies around 5170-5180 levels, sustaining above these levels may target 5250 or above levels in coming days. Whereas if it fails to hold these levels then it would attract fresh selling in the market towards 5100-5080 levels. Capital Goods stocks especially BHEL & LT look weak on charts as even the market rallied from lower levels these stocks did not witness any buying interest indicating weakness.

Sensex yesterday closed the gap(16889-16865) which was created on Monday with increased volumes. Now Sensex has immediate resistance around 17200 levels which was the previous top made on 8th Sept sustaining these levels may give breakout of Head & Shoulder pattern and may rally towards 17650 levels. Whereas if it fails to hold 17200-17250 levels then fresh selling may be seen towards 16800-16700 levels.One should have cautious approach at this juncture and trade accordingly.

Technical Calls:

ZYLOG (Close: 433.20) The stock has given breakout with volumes after a consolidation of four months. The stocks also trading above 200Days SMA@401. Counter sustaining above 437 levels may target 455-460 levels in coming days.

GRASIM (Close: 2320) The entire cement pack is seeing buying interest and the stock looks very attractive on charts. The counter is trading above its all major moving averages i.e. 200 DMA @2288 and 100 DMA@ 2204. One can initiate long position with stop below 2280 levels and for the target of 2370 levels.


Technical View:

ENGINEERS INDIA (Close: 262.30) The stock has given volume breakout and has formed base around 250-255 levels. Counter looks attractive and it can target 100DMA@273 and 200DMA @289 levels in coming days. One can initiate long position with stop below 254 levels.

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