If things get stickier for Ranbaxy, the stock could decline to around Rs 855 levels
HPCL
Current Price: Rs 193.50
Target Price: Rs 213.00
The stock has found a stable bottom around Rs 180 and bounced back on FI support. Bargain hunting should take it higher. There is strong resistance around Rs 215 and it would be prudent to book some profits at that level. In the event of expanding volumes, we may see the stock move to around Rs 240. That is where it "gapped" after the CCD meeting when the selloff was deferred. The gap would be a very strong resistance and unlikely to be crossed until that unfavourable CCD decision is reviewed. Keep a stop at Rs 180.
ICICI Bank
Current Price: Rs 139.80
Target Price: See below
There was a sell off on the rating downgrade. The ADR was also sold heavily. The stock has a support at the current price and another one slightly lower at around Rs 133-135. If it breaches the Rs 133 support, it may end up moving down to around the Rs 115 mark. Short if the stock drops below Rs 133, and accumulate if it holds above that level by next weekend. By then, the fundamental reassessment will be clear and so will the arbitrage opportunities vis-a-vis ADR.
SCI
Current Price: Rs 75
Target Price: Rs 86
The stock has attracted buyers on news that the final round of due diligence is in process. It had previously seen a large sell-off by disappointed bulls. There is a strong resistance at Rs 85 and it's difficult to imagine any rational strategic price, which will overcome this resistance. However action in this scrip is strictly news-based, so anything is possible. Short-term traders should get out if a price of Rs 85-86 is achieved in any case, since there will be supply coming at that level.
Ranbaxy
Current Price: Rs 881.50
Target Price: See below
This stock has always displayed high volatility. The Sebi investigation for breaking creeping acquisition norms has negative implications. However a support at Rs 876 held solidly. If things get stickier for the management, we could expect the stock to fall to around the Rs 855 mark. Otherwise it will continue to trade in the Rs 875-905 range. Sell if it breaks Rs 870 and buy at Rs 855. Either wait or use derivatives. If you buy a put at Rs 870 and sell a put at 840 - the bear spread comes into the money around 862, based on Friday's prices.
Aztec Systems
Current Price: Rs 36.80
Target Price: Rs 44
The stock has registered a bullish sequence of highs and lows with very rapidly expanding volume in the last few sessions. It has strong resistance around Rs 45. It took a temporary hit last week before finding support around Rs 35. This is a classic "buy on the short-term decline" recommendation for a scrip that looks bullish in the long term. The decline last week appears to create a perfect entry point. Keep a stop at Rs 31 and book partial profits at Rs 44.
