Morning Trading Strategies – India August 09, 2012

Cairn is likely to get a small dip as events overtake the company’s Indian ownership, even as to years into Mangala’s opening the company’s $2 B revenues are an eye opener and are ramping up well. 

Consumer goods companies should be celebrating a good quarter but are stuck in their vortex near previous highs as the market has been put on notice that marketmakers ill not waste their breath on individual stories unless the secular move, undserstandably, fructified and most are not going to sell down more than 5-10% from here. 

The Veritas strategy is being used more as detractors offence by the offending managements and the company’s own actions do look like attempting just cheap publicityso gyrations in those stocks would be unhealthy on both sides. No they are not cheap enough to buy. 

Even at this low volatility, range bound options strategies on the indices get shot out very fast yet the indices are unlikely to move below 5200 and abpove 5400 immediately , so unless you are day trading it is not going to make much sense. 

The new version of the Land Acquisition Bill will likely increase interest in Jaicorp and Reliance as Reliance climbs out of a 3 year hiatus in the trenches and DIIs are unlikely to sell further after the 7B spree yesterday. 

Stanchart is due for a comeback as NY’s action was not defensible according to the Fed and the Treasury and the incidence of penalties is fairly okay at $700 mln in line with settlements already made. 

The movers continue to reside largely in Healthcare ( Glenmark, Stride Arcolabs, Orchid) and Banking (HDFC Bank, ICICI Bank) while Infracos like IDFC still make gretat portfolio picks for the coming spending surge even as the Fisc blues have been shouted too often and little or nothing will be done, Veritas making sure the deficiencies we look for reside in an entirely parallel universe of good old “these vermin companies do not deserve…” 

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