One of the best long term investment opportunities available today is the stock of DLF — India’s largest real estate developer, and a constituent of Nifty 50 Index. We believe property prices in India have increased nothing compared to the rise we will see in next 5 years. Thanks for QE2, global liquidity will continue to flow into India during the next 5 years, and all commodity prices including property will increase in the emerging markets like India; property prices may increase significantly more than metals. The recent plot sale of Rs 5 billion by DLF is a good example of how they can start monetizing land bank assets, which DLF has in plenty. If you want to trade DLF for Rs 20-30 gains, that’s your decision. However, we believe one can confidently buy at any price between 250 and 300 (which we got last week as well) and hold this stock for over 250% gain in 4-5 years, by when the stock may cross Rs 1000.
Indian Stock Market Analysis -21Nov2010
The interesting thing in this market market correction is that many stocks are at 52 week lows and many are near 52 week highs. The stocks that did not participate in the Sept-Oct rally are falling as rapidly as stocks that rose 30-50% and now correcting.
Banking stocks, which led the recent rally, are down with profit booking, but once the market stabilizes and starts moving up, they can move up again by 25-30% in the coming months. Among large banks, ICICI Bank looks good with 1 year target 1500, which is 35% upside from current levels. City Union Bank has posted good results, and is our top pick in smaller banks, and it can gain 50% over next 12 months. Continue reading Indian Stock Market Analysis -21Nov2010
FII-DII trading on NSE and BSE-19Nov2010
This week, FIIs have sold their long positions significantly in Futures and Options. And they have written (sold) call options for Nifty 6100 and 6200, which means the Nifty Index will find it difficult to cross these levels in the short-term. The real support for this market is between 5450-5550, which was the level from where the rally started. An intermediate support is at 5800-5820, from where a short-covering pullback can happen for 100-200 points up to reach 5950. But if the selling pressure remains strong, then 5500 levels are possible.