Daily Mkt Watch

Actionable ideas

PNB (BUY, CMP Rs702, Target Rs810)
The stock has recorded a breakout past its long term resistance trendline and is currently trading near its 52-week high. The stock has seen steady volumes over last few trading sessions, which is an indicator of increased interest in the stoc k. The Monthly RSI is showing a positive divergence whereas the long term MACD is still in a buy mode. A move past Rs720 levels
would see the stock heading towards the target of above Rs800 in the near term. Based on above mentioned technical parameters we recommend investors to accumulate the stock at current levels and on declines for initial target of Rs810.

IOC (BUY, CMP Rs525, Target Rs620)
The stock made a high of Rs810 in the last week of December. Then it started falling, eventually finding support at Rs450 levels. The daily charts indicate that the stock has broken out from a medium term consolidation phase following the correction in the market. Moreover, the stock is moving well above its 200-day moving average. Sharp decline in prices should be used as an opportunity to accumulate the stock at current levels and at declines. Also, the daily RSI has started moving up and is above the neutral area. Keeping in mind the above evidence, we recommend short term traders to buy the stock with a price target of Rs620.

Godawari Power & Ispat (GPIL) (CMP Rs282, Target Rs330)
GPIL reported a 74.6% yoy growth in revenues at Rs220cr on account of an increase in realization. On qoq basis it registered a 22% growth on the back of lower sponge iron production. The increase in revenue was due to an increase in the sales volume of power. Capacity additions, which were commissioned 100% on Sept’07 will lead to robust volume growth for the company. GPIL’s strong volume growth coupled with higher realisations, will lead to its revenues rising by
a CAGR of 50.9% over the period FY07-10E. We recommend a buy with a shot term target price Rs330.
Other stocks to watch out for: IGL, IOB and Hind Oil Exp.