Market Strategy For Trading on 8th Oct. 21014

THE MARKET OPENED AFTER A FIVE DAY EXTENDED HOLIDAY AND PROMPTLY FELL, GIVING SHORT SELLERS A FAIR PROFIT. PARTIAL PROFITS SHOULD BE TAKEN ON SHORT TRADES, AS MARKETS MAY BE VOLATILE AND DIFFICULT TO PREDICT IN NEXT FEW DAYS.

For short term traders, stay on the short side with reduced positions. Take profits on any intraday plunge. Understand that markets are getting short term oversold, therefore, we should look for signs of support: a sharp decline that finds support after a fall. At such support level, take profits on the balance of your positions.

·        Bank Nifty has seen a big decline today and closed below to its last swing low. This decline came after the narrow prices action in the index. Next, support comes at 14750 which may or may not hold. As of now trend is down and we should look for a shorting opportunity in Banking Stocks as well in the Index.

·        A Choppy and volatile trading day for the CNX IT index. Prices have seen up’s and down today and closes at the open. Support comes at 11250 in CNX IT. Trend is very strong on upside and we should take a long trade in IT Stocks.

·        OIL Sector has been declining and in a phase of correction. This correction is now finding support near the last swing low and begins a process of consolidation. This suggests that we may see a deep correction in Oil Stocks. Long term trend is up in this sector so we should avoid taking short trade in oil stocks. Wait for prices to confirm an up move then look for a buying opportunity in this sector. 

SCRIP	LTP	DESCRIPTION
IRB	220.20	IRB has been trading inside a large range. This range has broken on downside and prices are
		trading below to it. Sell this stock below 219. If this trade executes then place your stop just
		above 226 with a target near 205
MOTHERSUMI	390	MOTHERSUMI has seen a sharp upside move and then a correction. This correction made a
		pattern of descending triangle. This pattern has broken on downside and price closes below
		the support line. Sell this stock below 388. If this trade executes then place your stop just
		above 398 with a target near 368
NTPC	141.30	NTPC is consolidating at its bottom. Inside this consolidation, prices have form a pattern of
		Ascending Triangle and broken above the resistance line of this pattern. This is a high risk
		trade because intermediate trend is still down. Buy this stock above 142. If this trade executes
		then place your stop just below 140 with a target near 146
SUNTV	335.55	Trend is down in SUNTV. Prices have seen a sharp upside move and find resistance near
		345. Today prices saw a down move and close lower. This suggests that the correction is now
		over. Sell this stock below 333. If this trade executes then place your stop just above 345 with
		a target near 320.

 

McLeod Russel India Limited- Fundamental Research

McLeod Russel India Limited (MRIL) was originally incorporated as Eveready Company India Private Limited on 5th May 1998. MRIL is the world's largest tea plantation company, which produce over 70 million kilos of high quality tea from its 53 tea estates in Assam and West Bengal. As the largest Indian tea exporter the company maintains strong connections with buyers in the United Kingdom and Europe. The Company's tea is marketed under the registered Elephant trade mark. Apart from the tea, McLeod Russel has over the past five years been closely working with local towns and villages throughout North East India with the cultivation of Jatropha (Jatropha curcas) under Agricultural project, which is used to make D1 Oil - Bio Diesel. MRIL has the certification for various credentials to its products from Fairtrade Labelling Organisation International (FLO), Hazard Analysis Critical Control Point (HACCP), Suppliers Ethical Data Exchange (SEDEX) and Ethical Tea Partnership (ETP).

Key Highlights:

• McLeod Russel India Limited  (McLeod Russel) is a member  of the Williamson Magor Group engaged in the business of tea production for over 140 years.
• Last Year  the Company achieved 11.37% higher production at 871 lakh kgs as compared to the previous year. The revenue from Operations was also 7% higher at Rs. 147506 lakhs. The post tax profit however was 7.8% down as compared to the previous year, primarily on account of lower sales realization per kg of tea sold, increase in cost of materials consumed, higher employee costs and higher costs of power and fuel.
• The Company has forty seven ISO 22000 certified factories. Company also has four estates certified as "Fairtrade" and thirty five estates certified as "Rainforest Alliance." The Nilpur Blending Unit is a HACCP Certified unit. Company also participates in Ethical Tea Partnership, a global initiative.
• The Company saw a total export quantum of 236 lakh kgs during the year with an overall export turnover of over Rs. 46525 lakhs. The Company presells nearly 70 per cent of its export volumes and 40 per cent of its domestic sales, securing realisations.
• Recently Phu Ben Tea Company, a step down subsidiary of the Company in Vietnam has signed an Agreement with Ngoc Hai Company for acquisition of a factory in Doan Hung District, Phu Tho Province, Vietnam with annual production capacity of 12 Lakh kgs.

 Recommendation Price                                          Price                                            Target Price
Accumulate(285-300)                                               Rs. 308                                           Rs. 370

                                  

Stock Details
Market Cap. (Cr.)	3407.49
Face Value	5.00
Equity (Cr.)	54.73
52 Wk high/low	330.00 / 246.90
BSE Code	532654
NSE Code	MCLEODRUSS
Book Value (Rs)	124.01
Industry	Tea

Subsidiary Companies

The Company has one wholly owned subsidiary namely, Borelli Tea Holdings Limited, U.K. (Borelli) and six step down subsidiaries. Borelli is inter alia engaged in the business of investing funds in various Companies engaged in tea production, blending marketing and investment activities.