Will Maruti be everyones Diwali Gift for 2012-13?

Dear All,

It looks like Maruti is on the verge of a multi year trend break. As per the chart below Maruti is testing the 2009-10 trendline.

Keep an eye on this stock which is currently trading around 1450 levels for a break above 1500 and with the following targets:

3 months - 1600
6-9 months - 1710
12 - 15months - 1800

Once this stock crosses the 1650 levels there will be several new highs this stock could potentially create.

Technical traders will notice a possible cup and saucer(2011-12) or head and shoulder (mid 2009 - 2012) or a symmetric triangle (2009 start to 2012) pattern possibly being broken out.

Do keep an eye on this stock for a potential multi-bagger opportunity.

Thanks,
Dewang  K. Mehta
DENIP Consultants Pvt.  Ltd.

Disclaimer Post applies

Nifty View - DENIP Consultants - Jan 2012 - Dewang K Mehta

Dear All,

The down trend that started on the Nifty since November 2010 from 6300+ levels on the Nifty is under significant threat.


I, have highlighted the tops with the help of a black trendline in the chart below.

We at DENIP Consultants believe that if we see a close above the 5220 mark on the Nifty we could see this downtrend end. A close above 5220 would definitely indicate the beginning of a major up trend which could last at least a year/ year and a half.

However for the short term traders, it would not be a bad point to initiate some speculative shorts. We would advise investors to start deploying cash into banking and metal stocks provided we see a close above 5220.

Do feel free to post your comments / views on the Nifty & get in touch with us in case you need to create a portfolio to encash this rally.

Thanks,
Dewang K Mehta
DENIP Consultants Pvt. Ltd.
Disclaimer Post applies.

BAD Equity SIP Returns VS FD Returns

Dear All,

This is an interesting read by ET Wealth. I think during such troubled times they're trying to educate investors to stick with their SIP's instead of stopping them and to have faith in the Equity Markets over the long term. 

I totally support this process and believe that investors should show a little more faith in the time frame and the performance of the fund manager. Although the short term / near term for the Equity Market looks to be terrible, over the long run your Systematic Investments will work out just fine. 

A 27% return CAGR over 10 years is pretty impressive where clearly Rs. 1.2lakh was returned as Rs. 12.79lakh. 

Our view at DENIP is that we anticipate at least a 10% - 15% fall in the indices (BSE Sensex & NSE Nifty) over the next 1 quarter. We believe that all long term investors should look to add a Gold SIP to their Equity SIP portfolio as a hedge to the oncoming fall since in the worst case inflation linked returns around 6% will  persists and during such turbulent times (2008 crisis, 2011 EU crisis) higher returns to the tune of 20%+  can be expected. Following is an email we had sent to a client on the 31^st of October 2011 who had started investing recently:

Scheme Name	Folio No.	Amount Invested	Current Value	No. of Units	Current NAV	Profit / Loss	P/L %
HDFC Top 200 Fund	7228258/61	15,000.00	14,099.14	73.953	190.650	(900.86)	-6%
Reliance Regular Savings Fund	404120184465	5,000.00	4,744.64	171.952	27.593	(255.36)	-5%
DSP Black Rock Top 100 Equity Fund	2496587/94	10,000.00	9,298.50	102.142	91.035	(701.50)	-7%
Kotak Gold Fund Growth	1913261/95	10,000.00	12,415.69	959.859	12.935	2,415.69	24%
	Total	40,000.00	40,557.97			557.97	1%

The whole portfolio was saved only because of investments in a Gold fund. If you work on proper asset allocation, the return game changes completely.

Do get in touch with us if you're interested. You can call us on (022)40156688/99 or 9320496699/9320196699.

Thanks,

Dewang K. Mehta

DENIP Consultants Pvt. Ltd. 

Nifty View- October 2011 - DENIP Consultants - Dewang K Mehta

Dear All,

We have been bearish on the Nifty since July 30th 2011 and we even booked profits once around the 4750 levels. At the current levels of 5118, and with today's red tick in the market we are bearish on the Nifty again with a target of 4750. 

Following is a zoomed out version of the Nifty chart which clearly shows that we are in a range bound zone in a falling trend market.

The following chart of the Nifty is the zoomed in version of the range bound trade. Next Target on the Nifty is 4750. We need to wait and watch if 4750 is breached this time or do we find support and continue this range bound trade.

Thanks,

Dewang K Mehta

DENIP Consultants

Disclaimer Post Applies

RIL Q2 PAT up 15.8% at Rs 5703cr, GRM below expectations

Robust refining margins—which are directly co-related to crude oil prices—helped Reliance Industries (RIL) to meet analyst expectations on the bottomline. At the same time, revenues from the exploration & production business fell sharply, offsetting much of the gains from higher volume sales and price hikes.

RIL’s July-September quarter net profit rose 15.8% year-on-year, to Rs 5,703 crore. This was marginally lower then the CNBC-TV18 poll projecting the bottomline at Rs 5,750 crore. Net turnover for the quarter rose 35% to Rs 80,790 crore, better than the poll estimate of Rs 79,800 crore.

“The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%. RIL has strong balance sheet and sustained earning base to pursue growth opportunities,” said, chairman and managing director  Mukesh Ambani in the earnings release.

Here is a quick look at how each of the key segments fared.

OIL AND GAS (exploration and production):
Segment revenue:                         Rs 3,563 crore, down 17.2% y-o-y

Earning before interest and taxes: Rs 1531 crore, down 10.2 % y-o-y

The company in a statement said that production from KG-D6 was 2.7 million barrels of crude oil, and 303.4 BCF of natural gas, a reduction of 42.1% and 20.3% respectively  y-o-y.The reduction in production was mainly due to reservoir complexity. Production of gas condensate was 0.40 million barrels, an increase of 26.3 % over the previous period. 
Gas was sold as per the Government’s Gas Utilization Policy and at a price of $ 4.2 /MMBTU.

REFINING AND MARKETING

 Segment revenue: Rs 68,096 crore, up 37% y-o-y

Segment EBIT:       Rs 3,075 crore, up 40.3% y-o-y

RIL, which operates the world's biggest refining complex in western India, said gross refining margins were at $10.1 per barrel but did not immediately provide year-ago numbers. The margins had been at $10.3 a barrel in the previous quarter. The company also said that the refining and marketing segment achieved a record revenues due to higher prices which accounted for 38.0% growth in revenue while increase in volume accounted for 3.5% growth in revenue.

 PETROCHEMICALS

Segment revenue: Rs 21,066 crore, up 39.5% y-o-y

Segment EBIT:      Rs 2,422 crore, up 10.2%

However, segment EBIT would have been higher if not for spiralling depreciation cost.

Meanwhile, have a quick glance at the company's half yearly performance

- Turnover increased by 36.0% to Rs 164,479 crore ($ 33.6 billion)
- Exports increased by 52.2% to Rs 101,872 crore ($ 20.8 billion)
- PBDIT increased by 9.0% to Rs 21,950 crore ($ 4.5 billion)
- Profit Before Tax increased by 19.6% to Rs 14,581 crore ($ 3.0 billion)
- Cash Profit increased by 4.6% to Rs 17,828 crore ($ 3.6 billion)
- Net Profit increased by 16.3% to  Rs 11,364 crore ($ 2.3 billion)
- Gross Refining Margin at $ 10.1/bbl for the quarter and $ 10.2/bbl for the half year ended 30th September 2011

Source: Moneycontrol.com

RIL Q2 PAT up 15.8% at Rs 5703cr, GRM below expectations

Robust refining margins—which are directly co-related to crude oil prices—helped Reliance Industries (RIL) to meet analyst expectations on the bottomline. At the same time, revenues from the exploration & production business fell sharply, offsetting much of the gains from higher volume sales and price hikes.

RIL’s July-September quarter net profit rose 15.8% year-on-year, to Rs 5,703 crore. This was marginally lower then the CNBC-TV18 poll projecting the bottomline at Rs 5,750 crore. Net turnover for the quarter rose 35% to Rs 80,790 crore, better than the poll estimate of Rs 79,800 crore.

“The increase in profits was largely driven by improved performance in the refining and petrochemicals business. All our manufacturing facilities operated at record levels with refineries achieving operating rates of 110%. RIL has strong balance sheet and sustained earning base to pursue growth opportunities,” said, chairman and managing director  Mukesh Ambani in the earnings release.

Here is a quick look at how each of the key segments fared.

OIL AND GAS (exploration and production):
Segment revenue:                         Rs 3,563 crore, down 17.2% y-o-y

Earning before interest and taxes: Rs 1531 crore, down 10.2 % y-o-y

The company in a statement said that production from KG-D6 was 2.7 million barrels of crude oil, and 303.4 BCF of natural gas, a reduction of 42.1% and 20.3% respectively  y-o-y.The reduction in production was mainly due to reservoir complexity. Production of gas condensate was 0.40 million barrels, an increase of 26.3 % over the previous period. 
Gas was sold as per the Government’s Gas Utilization Policy and at a price of $ 4.2 /MMBTU.

REFINING AND MARKETING

 Segment revenue: Rs 68,096 crore, up 37% y-o-y

Segment EBIT:       Rs 3,075 crore, up 40.3% y-o-y

RIL, which operates the world's biggest refining complex in western India, said gross refining margins were at $10.1 per barrel but did not immediately provide year-ago numbers. The margins had been at $10.3 a barrel in the previous quarter. The company also said that the refining and marketing segment achieved a record revenues due to higher prices which accounted for 38.0% growth in revenue while increase in volume accounted for 3.5% growth in revenue.

 PETROCHEMICALS

Segment revenue: Rs 21,066 crore, up 39.5% y-o-y

Segment EBIT:      Rs 2,422 crore, up 10.2%

However, segment EBIT would have been higher if not for spiralling depreciation cost.

Meanwhile, have a quick glance at the company's half yearly performance

- Turnover increased by 36.0% to Rs 164,479 crore ($ 33.6 billion)
- Exports increased by 52.2% to Rs 101,872 crore ($ 20.8 billion)
- PBDIT increased by 9.0% to Rs 21,950 crore ($ 4.5 billion)
- Profit Before Tax increased by 19.6% to Rs 14,581 crore ($ 3.0 billion)
- Cash Profit increased by 4.6% to Rs 17,828 crore ($ 3.6 billion)
- Net Profit increased by 16.3% to  Rs 11,364 crore ($ 2.3 billion)
- Gross Refining Margin at $ 10.1/bbl for the quarter and $ 10.2/bbl for the half year ended 30th September 2011

Source: Moneycontrol.com

Nifty View - DENIP Consultants - Dewang K Mehta

Dear All,

At the risk of sounding cocky, we are going to come out and say that we told you so. A lot of people got worried when we opened almost 3% lower this morning, some even started shorting the market. However if you would have followed our advise (http://denipconsultants.blogspot.com/2011/08/nifty-view-denip-consultants-dewang-k.html)  you would’ve been a buyer and not a seller this Monday morning.

Hope none of the people associated with us or reading this email or reading our blog went short in the market. We however strongly believe that the rally that comes in next will be a relief rally and that people should look for opportunities to sell the rally. Please be patient and opportunities will come knocking. (http://denipconsultants.blogspot.com/2011/08/what-do-you-do-with-your-sip.html)

Godrej industries had fallen down to 205 and we hope that some of you bought the stock as per the levels mentioned by us this past week (http://denipconsultants.blogspot.com/2011/07/godrej-industries-6month-buy-dewang-k_30.html).

Thanks,

Dewang K Mehta

DENIP Consultants

Nifty View - DENIP Consultants - Dewang K Mehta

Dear All,

The charts of the S&P CNX Nifty show that we have broken down from a descending triangle pattern with a gap down which usually is considered to be a strong down move. If a target has to be set then the first target for this fall would be 10% lower from the breakdown point which comes to 4815 - 4825 considering that the break down happened from 5361 levels.

We however believe that since we have had a 5% fall this week, we will spend the coming week consolidating and then the week after in a pullback mode. Ideally we believe that the pullback till 5360 / 5350 should not be ruled out in the coming 2 weeks. However the 5350 / 60 would be a good level to short again and this time around expect a fall till 4800 levels.

According to us large cap stocks such as M&M, TCS, SBI etc. of the world would be strong candidates for a buy since they would lead the pullback.

Our Previous Post: http://denipconsultants.blogspot.com/2011/07/s-cnx-nifty-still-bearish-dewang-k.html

Thanks,

Dewang K Mehta

DENIP Consultants

Disclaimer Post Applies 

What do you do with your SIP Investments when the Market is falling? - Dewang K Mehta

Dear All,

With a lot of you worried about your investments in the market, we at DENIP believe that in a falling market it’s better to have a SIP running rather than stopping with your investments just because the market is falling. Following is an example which should help you get an idea of what we’re talking about.

If you need any further details please feel free to call or email us.

Thanks,

Dewang K Mehta

DENIP Consultants Pvt. Ltd.

Disclaimer Post Applies

Godrej Industries - 6Month Buy - Dewang K Mehta

Dear All,

In our previous post on Godrej Industries (http://denipconsultants.blogspot.com/2011/07/godrej-industries-6month-buy-dewang-k.html), we asked fellow investors to book out profits in Godrej industries on the 7^th of July 2011 around 222 levels. We advise you’ll to re-enter this stock below 207 levels for a test of 231 levels again. We also believe that the target of 250 is still intact.

If we are to consider yesterday’s close of 211, we have saved at least 11Rs or close to 5% in this month alone. I would ideally want to buy it around the 205 levels but I am not too sure if it will fall to those levels. Below 210 is a good entry for this stock but patience is a must.

Thanks,

Dewang K Mehta

DENIP Consultants 

Disclaimer Post Applies

S&P CNX Nifty - Still Bearish - Dewang K Mehta

Dear All,

This week the S&P CNX Nifty closed at 5482 which according to the charts is a very crucial level for it. A close below 5480 will definitely see us testing the 5200ish zone on the Nifty which takes it lower by at least another 3%.

What we have done is to go back to the basics of technical analysis which talks about supports and resistances. We have highlighted the resistances in red color from where the Nifty has fallen every time and the supports in black which are the zones where Nifty witnesses buying and bounces back.

So according to our reading of the charts we are very crucially poised and if you play by the book then it’s prudent to buy the Nifty at 5480+ levels and keep a stop loss of 5446 both being spot figures. However for traders who love going short we would advocate a weekly close below 5450 to go ahead and short the Nifty.

We began July with the Nifty at 5700+ when we had emailed and blogged about being cautiously bearish and we still continue to hold a bearish view on the market. However we are not ruling out a ultra quick up move to 5650 if buying does come in.

Our previous posts on the Nifty:

1. April 2011 - http://denipconsultants.blogspot.com/2011/04/nifty-view-denip-consultants-dewang-k.html
2. June 2011 - http://denipconsultants.blogspot.com/2011/06/nifty-view-denip-consultants-dewang-k.html
3. July 2011 - http://denipconsultants.blogspot.com/2011/07/s-cnx-nifty-cautiously-bearish-dewang-k.html

Clearly the above posts show how we have been bearish on the Nifty since 5900 and continue to maintain our view.

Thanks,

Dewang K Mehta

DENIP Consultants

Disclaimer Post Applies

S&P CNX Nifty - Cautiously Bearish - Dewang K Mehta

Dear All,

Please find attached herewith the Nifty charts. We believe that  the coming week could be very decisive for the Nifty and a weekly close in the red(negative) means that we resume our downward trend. A close below 5550/30 could very well mean that we test the 5450 levels soon.

We advise investors to hedge their long positions for the coming week where we see a potential downside. Resistance level for the Nifty is set at 5650/60 and the support levels are placed at 5560/5535. A close below the support levels takes us to 5450.

According to us 5500 – 5570 is a strong support zone but the international crisis could take us down.

Thanks,

Dewang K Mehta

DENIP Consultants 

Disclaimer Post Applies 

Nifty View - DENIP Consultants - July View - Dewang K Mehta

Dear All,

In continuation with our view on the Nifty where we did mention a possibility of a break out and we do seem to be in place now with the S&P CNX Nifty closing at 5728 levels. We believe that we should see at least 2 – 3 sessions in the green on the Nifty before we witness a pullback.

For now we should face resistance on the Nifty at the 5740 /5750 level and a close above that should take us to 5800 levels. However we do not rule out a pull back from the 5740 / 50 levels which could happen as early as Friday.

Please click on the image for an enlarged view.

Thanks,

Dewang K Mehta

DENIP Consultants Pvt. Ltd.

Disclaimer Post Applies

Nifty View- July 2011 - DENIP Consultants - Dewang K Mehta

Dear All,

Attached herewith are 2 S&P CNX Nifty charts. If you look at the charts then you will clearly see that the Nifty is facing stiff resistance at the 5720 – 5745 mark due to the resistance line (denoted in red) which has been pretty effective since November 2010.

Our understanding is that although it might be a good level to sell the Nifty, this time around the scenario might just be a bit different. If you look at the numbers then the FII have been buying heavily in our markets and the fall on Friday could be nothing more than profit booking. Monday might turn out to be a more decisive day than ever considering that we already have one close in the red. If we do close in the red on Monday with decent volumes then we might actually witness the Nifty fall back to 5555 levels where it should find some decent buying.

However a close below the 5555 level could essentially see the nifty fall back in the 5400+ region. We advise traders to keep strict stop losses on their long positions and could buy some puts to hedge their long positions. A 100 point fall on the Nifty from the current 5627 level could earn decent money on Puts.

The scenario does change if we do mange to close above the 5730/40 mark. We could have an upside that potentially extends till 6000 levels. If I look at the historical trend in July then the trend has been on the upside with the Nifty gaining a minimum of 100 points in the past 2 years or so. If I was to look at the indicators then all of them suggest that we are overbought but more often than not during a break out these indicators tend to be in the overbought zone.

This time it will be very interesting to see whether we break out or continue the downtrend considering that the FIIs have been buying heavily and the DIIs have been selling. Let’s see who wins this battle but for now trade safe and be light on your portfolio positions.

Thanks,

Dewang K Mehta

DENIP Consultants 

Disclaimer Post Applies

Sensex slumps 600pts in panic selling - Dewang K Mehta

The markets after a start took a sharp dip in mid-morning trades on panic selling on reports that tax treaty talks between India and Mauritius are likely to resume soon. The Sensex tumbled to a low of 17,314, and is now down nearly 300 points at 17,577.

In the doing so, the index almost revisted its February low of 17,295. The NSE Nifty has plunged 100 points at 5,272.

Stocks with investment in Mauritius have collapsed on reports that tax treaty talks between India and Mauritius are likely to resume soon. Over 40% FDI in India comes from Mauritius. KS Oils (down nearly 25%), Deccan Chronicle (down nearly 6%), Lanco Infra (down nearly 13%), Delta Corp (down nearly 12%), S Kumars (down nearly 7%), Cipla (down nearly 5%), Hindalco (down nearly 4%), JP Associates (down nearly 4%), Grasim (down nearly 5%), HCL Tech, DRL and Wipro (down nearly 4%), HDFC Bank (down nearly 3%), IDFC (down nearly 6%).

The Sensex had opened up 21 points at 17,891 and the Nifty, which slipped into red soon after opening, was up five points at 5,371.

IT and Power indices weighed on the benchmark indices in early trade. These indices are down between 1 and 1.5%, respectively. Wipro, Tech Mahindra, TCS, HCL Tech, Infosys are all down 2-4%. Reliance Infra dragged the Power index after being removed from the Sensex, the stock is down 5.5%. Suzlon, Reliance Power, GVK Power, GMR Infra are others down over 3% each. Reliance Power’s 4,000 MW UMPP hits a roadblock, teh company may seek government’s help.

Metal index is the biggest sectoral loser, down 0.7%, pulled down by Welspun Corp (down almost 5%), JSW Steel (down 2.5%) and Hindalco (down 2%). Auto is the other laggard on BSE, down nearly 1%. Tata Motors, M&M are down 3% each, Amtek Auto, Apollo Tyres are down nearly 4% each.

RIL (down nearly 3%) has pulled down Sensex by 55 points, followed by Infosys, TCS and HDFC Bank, which have lowered Sensex by almost 30 points each. The stock is seeing selling pressure since last week. Reliance Communication is another big loser on the back of being excluded from Sensex, the stock is down over 8% on the Sensex.

Sugar stocks are in focus after the government rules out additional exports before next harvest. Balrampur Chini is down 4%, Sakthi Sugars down 6%, Shree Renuka down 3.5%.

Market breadth is extremely negative. Only 362 stocks are advancing against 1,920 declining stocks.

Broader markets have crashed. CNX MIdcap is down 214 points and BSE Small Cap is lower by over 250 points.

Other stocks in news are GTL Infra, which touched a new low of Rs 16.90, down 43% on the back of its $300 million fund raising plan being scrapped. Bank of India is flat on its plans to enter mutual fund business with Bharti AXA. Bombay Dyeing is down over 5% after coming under the  CCI scanner for dictating prices and sale terms.


Thanks,
Dewang K Mehta
DENIP Consultants
Source: Business Standard