Quarterly numbers to give direction

Its earning season now. All sorts of numbers QonQ,  YonY etc will be out in comings days/weeks. Markets are hoping to get some impetus from these to give the markets the direction it needs. Which means marketmen are waiting to see if the markets are going to go up or down from here. It will  therefore be necessary  to carefully examine these before any further action in the markets.

BHEL  today announced flash (tentative) results for YE 31 Mar 2013.  YOY ,while there is an insignificant drop in profits (.08%) the order inflow increase is a stupendeous 42.7%. On the receivables form customers front, situation as stated by management is comfortable indicating not much of a  problem with cash flow.

Stock Idea:  BHEL: As mentioned above we can hold an optimistic view on the company  At its current price of Rs. 182, P/E  works out to a paltry 6.9. Also to be considered is the fact that the company has recently received a "Maharatna" status from Govt. Such status gives the company far greater autonomy. It appears that invetment cycle will bottom out sooner than later. With that the power sector is bound to get the required boost . And BHEL's stock, which has been battered, will widely outperform. For patient investors it is a very attractive buy at current levels. Technically it has broaken a very important support level of 200. There is no support till 150. The stock might not reach there but it is possible in case there is any sell off owing to any adverse scenario globally or locally.

Stock Idea update:  ICICI Bank . I had mentioned that  this stock could be bought around Rs 1000 levels and lower.. It sure corrected to this level. Looks like there is more weakness and it could get more attractive.
RECL is showing strength.

Disclosure: I hold BHEL and RECL. Waiting to enter ICICI Bank

Till my next then

Happy Investing
Basudev          

Markets continue to stagnate

Listless condition in the markets is expected to continue. After a few days of rally indices today took a tumble giving rise to a spectre of continuing volatility. Uncertainties facing the markets are quiet a few.

Interest rates are not likely to come down soon. With monthly increases in diesel prices, inflation will continue to exert pressure against any monetary easing. Companies will therefore be facing an uphill task
protecting bottomlines. There are also political uncertainties. Noises keep coming of early election etc.

Technically frontline indices are in a downtrend making lower tops and lower bottoms. Also Sensex had left previous upward gap @1800 and 1750. These will have to be filled up. So 1800-1750 are possible targets. Same is the case with Bankex. It will have to fill up gaps @ 12250/11750/11400. Most of the important stocks have broaken below their major trendline supports. Further correction is lurking. One should therefore be not in a hurry to buy now.

Stock Ideas:
ICICI Bank - This stock is expected to fill up an earlier gap @975/900 on the daily charts. Will buy if the stock corrects to around these levels.
RECL - This stock is,for a change, is in an upward channel on the weekly charts with lower line support  at around 180. Will buy at this level.

Fundamentally both the stocks have a good track record.

Until my next then

Happy investing.