Vol.14.

144 29th Oct 2010

MARKET COMMENTARY
Volatility reigned supreme particularly in the last 60 minutes as indices fluctuated wildly on the
expiry day of Oct series. Nifty barely managed to show a gain of 30 points for the October
series despite being up almost 300 points during the series. The whole series was marked by
increased volatility and the same phenomenon was repeated on the expiry day too. Nifty
gained almost 60 points mid session before slipping suddenly and sharply below 6000 around
3pm. Most heavyweights suffered sharp slides during this period. SAIL, Reliance Cap, JP
Associates, DLF, NTPC, Tata Steel, IDFC and Ranbaxy were some of the biggest losers in Nifty.
Bharti, Hero Honda, BPCL, HDFC and Ambuja did neutralize some of the losses but still Nifty
closed almost 25 points lower at 5987. It was a day of historic volumes as overall volumes
reached almost 2.83 lakh crores, bulk of it being contributed by NSE F&O segment. Some
stocks that remained in demand were ABG Ship, Asian Paints, Cummins, SriRam Transport
Finance, JSW Steel, NMDC and Core Projects. IDBI came out with stellar performance just
before the closing bell and moved up sharply to new all time highs. Some of the non-nifty
prominent losers were Orchid, United Spirits, Andhra Bank, Uco bank, Tulip, GSPL, FSL, Indian
Bank, KFA and IOB.
Nifty failed to sustain above 6050 and almost made a new recent low below 5966. As mentioned
yesterday also we have to watch out for 5950 on the lower side as sustained trades below 5950
could open up new lower targets. In fact, Nifty seems to be delicately placed right now as even
a strong rebound can also not be ruled out completely. So, market could move atleast 200
points either way from around 5950. Hero Honda seems to be coming out of the negative bias
of past few months and sustained trades above 1900 could take the stock higher to around
1990 and 2050. IDBI has given a strong breakout above 175 and sustained move above 175
could open up fresh new targets of about Rs 210. Some action was seen in some of the new
additions from 29th Oct in f&O. Few that are positively poised are Hind Oil( above 275), Bata,
Srei Infra, DCB, Escorts, IGL and Bom Dyeing( above 640).
Nifty has immediate support around 5960-70 and then around 5920-30.

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Every evening I would close my eyes in a quiet place in my apartments. I would
picture myself in the pit. I would visualize the opening and walk myself through the
day and imagine the different emotional states that the market would go through. I
used to repeat that exercise every day. Then when you get there, you are ready for it.
You have been there before. You are in a mental state to take advantage of emotional
extremes because you have already lived through them.”-Paul Tudor Jones

EQUI QUICKPICK
LOW RISK / LOW RETURN

NOTE : IN CASES WHERE CASH LEVELS ARE GIVEN, BUY/SELL FUTURES WHEN THE CASH
PRICE CROSSES THE BUY ABOVE/SELL BELOW LEVEL IN CASH

SCRIP STRATEGY S. LOSS TARGET HOLD PERIOD

M & M CASH BUY ABOVE Rs.740 732 748/756 3-4 DAYS

ADANI ENTT CASH BUY ABOVE Rs.687 679 696/702 3-4 DAYS

CENTURY TEXT CASH SELL BELOW Rs.497 509 489/483 2-3 DAYS

DERIVATIVE PICK
MEDIUM RISK / MEDIUM RETURN

NOTE : IN CASES WHERE CASH LEVELS ARE GIVEN, BUY/SELL FUTURES WHEN THE CASH
PRICE CROSSES THE BUY ABOVE/SELL BELOW LEVEL IN CASH

IDBI ( CASH – Rs.180.15) : This PSU banks which reported Rs.429 cr of profit in the second
quarter surprised the market with better than expected results. Buying is advised above Rs.183
for a target of Rs.189 and Rs.194. Higher target of Rs.202-206 is also possible. Stop Loss of
Rs.173 should be kept.

STOCKWATCH
LOW RISK / HIGH RETURN
HOLDING PERIOD – ONE to TWO MONTHS

JUBILANT FOODS
Present Price – Rs.528.80
Buy Only Above – Rs.535
Projected price – Rs.552/575

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Jubilant Foods Ltd ( JFL) is one of the largest and fastest growing international
food brands in South Asia with ~65% market share in the organized pizza home
delivery segment in India. The exclusive Domino’s franchise in India provides the
company with substantial operational efficiencies over some of its competitors
who do not have the right to operate on a national basis.
JFL is also the master franchisee for Domino’s brand in Sri Lanka, Bangladesh
and Nepal till 2024, extendable till 2034. Its sub-franchisee operates 5 stores in
Colombo. Over next few years, these non-India emerging markets could also
enhance the company’s business prospects.
Jubilant conducts ROI analysis based on projected sales and profitability to
determine the financial feasibility of a store. The average store opening time is
between 35 and 45 days from the date of possession of the premises. The
company’s operating discipline and standardised internal processes have
contributed significantly to its growth. Employee training programmes cover
every aspect of a store’s operation, including receiving an order, pizza
preparation,baking, cutting, routing, delivery, among others. The company has
been able to ensure that the average delivery time for an order is only 22.50
minutes.
On the technical front, the stock has consolidated around Rs.500 levels for the
past one month. Once it crosses the level of Rs.535, it can easily go to a level of
Rs.552 and then to around Rs.575-580 levels.

MOMENTUM STOCKS

SCRIP STRATEGY S. LOSS TARGET HOLD PERIOD

MUNJAL SHOWA BUY ABOVE Rs.71 - 76/81 5-6 DAYS

SONATA SOFTWARE BUY ABOVE Rs.58 - 65/69 8-9 DAYS

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 MARKET GOSSIP
HIGH RISK / HIGH RETURN

RISHI LASER ( Rs.78.30) is being recommended by a Mumbai based analyst who expects the
stock to cross the level of Rs.125 in the next ONE YEAR.

GAYATRI PROJECTS ( Rs.376.10) listed in BSE, is expected to cross the level of Rs.500 in the
next SIX MONTHS, says a broker form Delhi. Keep track of its prices

INDEX LEVELS
LTP S1 S2 S3 R1 R2 R3 STRATEGY
NIFTY FUT 6075 6048 6017 5985 6096 6127 6163 Trade both sides
BANKNIFTY 12270 12225 12185 12135 12305 12355 12420 Trade both sides
CNXIT 6645 6617 6578 6545 6670 6710 6755 Trade both sides

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Disclaimer: The recommendations made herein do not constitute an offer to sell or a solicitation to buy any of the securities
mentioned. Readers using the information contained herein are solely responsible for their actions. The information and
views contained herein are believed to be reliable but no responsibility or liability is accepted for errors of fact or opinion.
Editors may or may not have trading or investment positions in the securities mentioned herein.

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