Stocks in India have performed very well over the last month, with the BSE SENSEX up more than 5% and NSE’s NIFTY 50 index gaining more than 6%. Two sectors in particular are leading the rally: pharmaceuticals and cement stocks.
Top Gainers – Sun Pharma, Ultratech Cements
Sun Pharma and Ultratech gained the most on Monday. The market capitalization of Sun Pharma is Rs. 23300 crores with shares trading at Rs. 332.75 per share, up 4% from the previous day’s close. The company has a P/E ratio of 9 times and an EV/EBITDA value of 16 times.
Ultratech have a market capitalization of Rs. 6500 crores with shares trading at Rs. 397 per share, up 2% from the previous day’s close.
The company has a P/E ratio of 14 times and an EV/EBITDA value of 19 times.* Top Losers – NTPC, Apollo Hospital: NTPC lost the most on Monday.
NTPC has a market capitalization of Rs. 10627 billion with shares trading at Rs. 198 per share, down 3%. Apollo Hospitals also shed as it had a fall in its stocks by 8%.*
NTPC is more of an infrastructure stock that invests in power generation and other related sectors while Apollo Hospitals is involved in hospital services.*
*The aforementioned figures were updated for each stock within 24 hours of this blog post . **We advise our readers to do their own research before making any
investments based off of our posts.
We are not liable for any loss incurred as a result of following advice given here. Readers should perform their own independent due diligence before investing in any company or sector.
Biggest Loser – NTPC
NTPC is the worst performer in today’s rally. The energy major has lost the most points among all stocks on both Sensex and Nifty. It was down by more than 2% in early trading hours but turned around to trade up 0.7%.
The stock has been a sell all year due to slow power demand growth and higher coal prices. NTPC is also grappling with financial issues as they recently reported losses for the last quarter of FY2017-18 (April-June).
Analysts believe that weak rupee may provide some respite for NTPC, which has seen its share price declining heavily this year. The rupee continues to remain weak against the dollar which would be positive from an earnings perspective, said Gopal Agrawal at Reliance Securities Ltd.
We are recommending investors to buy the stock. Market LIVE is buzzing with rumours that NTPC may announce better profits or dividends soon
Stock Market LIVE is buzzing with rumours that NTPC may announce better profits or dividends soon.
The company recently reported losses for the last quarter of FY2017-18 (April-June) and analysts believe that weak rupee may provide some respite for the company, which has seen its share price declining heavily this year.
However, given India’s economic status quo it remains unclear if investing in such companies like NTPC will actually generate sustainable returns because although it pays well it does not do so consistently and isn’t immune to fluctuations.
Share prices rise on Monday when there is good news such as profit announcements but have also fallen substantially when there is bad news such as profit warnings.
Other Stocks In The News
The market is opening on a bullish note today with the Sensex gaining more than 600 points and trading above the 58,000 mark. Sun Pharma and Ultratech Cement are the top gainers in the rally. NTPC and Apollo Hospitals are among the losers so far.
TCS has crossed 500-DMA of Rs 3,421 and is looking good for an all-time high above Rs 3,600.
We recommend investors to buy now at current levels with a stop-loss at Rs 3,221. For intraday traders we recommend buying stocks which have given SELL signals or SELL-STRONG signals from last 2-3 days like ONGC, NTPC, Yes Bank etc.
For long term investments we advise to look out for sectors which have given BUY signals from last 1-2 days like IT stocks (Tech Mahindra), Banks (HDFC Bank) etc.
Investors should avoid stocks which have given SELL-STRONG signals from last 2-3 days like Reliance Infrastructure, Bajaj Auto and ITC.
Investors can also consider building positions in stocks that are showing signs of bottoming out as these stocks may turn bullish soon.
These stocks include Power Grid Corporation Of India Limited, Tata Motors, State Bank Of India and Infosys.
Recommendation: Buy TCS – Price Crossed 500-DMA
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Recommendation: Buy Mahindra & Mahindra Ltd – Price Crossed 200-DMA
Mahindra & Mahindra Ltd. (M&M) shares have been trading in a range-bound manner for the past six months.
The stock had outperformed the market by almost 12% in the last three months and has been correcting at a faster pace of late.
Yesterday’s rally on the back of strong stocks like Sun pharma and Ultratech cement which contributed to 600 points gain in Sensex helped M&M cross 200 day moving average (DMA) on higher volumes.
Buying M&M at current levels seems like a good idea as it is trading near its lows for this year with upside potential. M&M looks set for another leg up towards the upper end of Rs 1,300-1,350 price zone after consolidating around Rs 1,250 level.
The target price stands at Rs 1,750 while stop loss can be placed below Rs 1,200 if one is not confident about the upside momentum.
Investors may look for opening long positions above Rs 1,240 with a stop loss below Rs 1,190.
Apart from M&M, other stocks that are worthy of mention include Hindustan Unilever, Kotak Bank, HDFC Bank and Axis Bank.
All these stocks are currently trading near their respective 200 DMA with a sell signal shown on the daily chart.
However short term investors may look for opening short positions below Rs 500 in HDFC bank, Axis bank and Kotak Bank.