HOT STOCK PICK (MID-DAY) OF 28-OCT-2009 WITH HOT NEWS

Trader's Choice


At any given point in time, there is always a story in the stock market that is cited to be a sure-shot winner, mutli-bagger, jackpot or whatever else it may be called. It can be Internet stocks one day, retail stocks the next, realty stocks the day after and so on. As more and more traders hear about the story and prices starts zooming, there is always the temptation to jump on the bandwagon and shovel in a large chunk of the portfolio in such stocks.


That is not such a good idea. Over-betting stems from over confidence and over confidence as we all know, has no place in stock markets. Betting a large chunk of your investment into any one idea can lead to significant diminishing of capital once the sector falls out of favour.


It is best to restrict exposure to any one stock to 2-3 per cent of your portfolio.


Diversification is the key to successful management of your investment portfolio. We talked about diversification within the equity portfolio in the preceding paragraphs. But the overall investment portfolio should also be diversified with money invested across asset classes so that the portfolio is cushioned from the vagaries of the stock market.


The exposure that an investor or trader has to the stock market should be related to his assessment of the market's trend. As the market starts looking over bought, over stretched etc, the exposure to the stock markets should be reduced and cash should be moved into safer avenues of investment. The extent of speculative activity evident in the markets can be used to guide the investors regarding formation of market peaks. Revival of interest in penny stocks, increase in the number of stocks hitting 52-week highs, surfacing of scams etc. are some of the common symptoms of a market nearing its peak.


Similarly, as the market sentiment turns negative more money should be moved away from equities.


It is not possible to take all the money out of the market or to move all the money in to the market. Scaling down the exposure is the second best alternative.


**********************************************************************
REC: Accumulate the stock in small quantities since the market is now in down trend 
--------------------------------------------------------------------------------------

TODAY'S HOT STOCK PICK:

Date: 28-OCT-2009


Stock Name: KSK ENERGY

BSE Code: 532997


LTP : Rs.200.20
(in Rs. Ps.)

Prev.Close : 185.20
(in Rs. Ps.)

% Chg : 8.10%


**********************************************************************
HOT NEWS

KSK Energy Ventures to declare Q2 results on Oct 28, 2009

KSK Energy Ventures Ltd has announced that a meeting of the Board of Directors of the Company

will be held on October 28, 2009, inter-alia, to consider the Financial Results of the Company

for the quarter ended September 30, 2009 (Q2).

------------------------------------------------------------------------------------------------------
The following bulk deals were transacted during the day at the National Stock Exchange (NSE) and

the Bombay Stock Exchange (BSE) on October 22.

LB India Holdings Mauritius I FDI on Account of sold 5,370,846 shares at Rs 200.4 a share of KSK

Energy Ventures.

LB Mauritius II sold 3,192,673 shares at Rs 200.42 a share of KSK Energy Ventures.

Morgan Stanley Investment Management Inc on account of Morgan Stanley India Investment Fund Inc

bought 2,948,000 shares at Rs 200 a share of KSK Energy Ventures.

Morgan Stanley Investment Management Inc on account of Morgan Stanley Growth Fund bought

2,680,000 shares at Rs 200 a share of KSK Energy Ventures.

--------------------------------------------------------------------------------------------------- 
KSK Surya Photovoltaic Venture Selects Applied Materials' SunFab Solar Panel Production Lines for

150MW Project in India

HYDERABAD, India--(BUSINESS WIRE) - Oct. 08, 2009-- KSK Surya Photovoltaic Venture, Private

Limited (KSK), a subsidiary of KSK Power Ventur plc, a leading independent power provider in

India, announced today that it has signed a contract with Applied Materials, Inc. to purchase two

Applied SunFab Thin Film Lines for manufacturing high-power output 5.7m2 solar panels. The SunFab

lines will be installed in a state-of-the-art facility, including an R&D center, which KSK plans

to build in the "Fab City" located in Hyderabad, India, at a total project cost (including land

and buildings) of approximately USD $500 million.

When completed, the annual capacity of KSK's facility is expected to be about 150MW, making it

the largest solar photovoltaic (PV) factory in India. Using Applied Materials' advanced tandem

junction technology, each 5.7m2 SunFab panel will have a power output greater than 500Wp.

Mr T.L. Sankar, KSK Group Chairman, stated, "Since India receives among the highest amount of

solar radiation in the world, it must become a leader in solar power-generation technology. Our

alliance with Applied Materials will help KSK play a significant part in India's new Solar

Mission to build 20GW of solar power by 2020." Mr S. Kishore, Executive Director of KSK, said,

"The large, powerful, tandem junction panels from our SunFab lines will enable us to quickly

build our PV capacity and supply clean, renewable energy at an affordable cost." Mr K.A. Sastry,

Executive Director, added that KSK intends to apply its power generation experience to system

integration and development of solar farms selling energy into the grid.

"KSK's selection of Applied's SunFab production lines and service solution is a strong testament

to the value proposition we offer to utility-scale power providers, affirming the manufacturing

readiness of our 5.7m2 tandem junction technology and the confidence in our roadmap," said Dr.

Mark Pinto, senior vice president and general manager of Applied's Energy and Environmental

Solutions Group. "The fully integrated SunFab lines will enable KSK to rapidly and

cost-effectively deploy solar farms to meet India's fast-growing, energy needs."

KSK also signed a service contract with Applied Materials covering the first five years of

production. Applied Materials will support KSK's lines with preventive and corrective

maintenance, spare parts and other services to optimize equipment performance and maximize

manufacturing output. In addition, Applied and KSK will work together to develop continuous

improvement programs that aim to increase module efficiency and lower operating costs.

"We believe that thin film silicon is the best solar module technology for conditions on the

ground in India," said Mr Anil Kutty, Managing Director of KSK Surya Photovoltaic Venture,

Private Limited. "Compared to crystalline silicon technologies, our SunFab thin film modules will

be capable of producing more power at high ambient temperatures and under diffused light,

maximizing the energy yield from our future solar farms."

Dr. Ravinder Kachru, Chief Executive Officer, and Dr. S. Rao Peddada, Chief Operating Officer of

KSK Surya Photovoltaic Venture, Private Limited, said, "We are excited about bringing the

advanced thin film panel manufacturing technology to India and working with Applied Materials in

developing next generation thin film PV technology."

Applied Materials, Inc. (Nasdaq:AMAT) is the global leader in Nanomanufacturing Technology

solutions with a broad portfolio of innovative equipment, service and software products for the

fabrication of semiconductor chips, flat panel displays, solar photovoltaic cells, flexible

electronics and energy efficient glass. Applied Materials, applies Nanomanufacturing Technology

to improve the way people live.


KSK Power Ventur plc, the ultimate holding company of the KSK Group, is listed on the Alternative

Investment Market (AIM) of the London Stock Exchange and is a leading developer
and operator of power plants in India and has initiated efforts on mineral and solar businesses

for wider footprint in the energy value chain. The main subsidiary company, KSK Energy Ventures,

is currently operating /implementing projects in excess of 4500 MW. Learn more at www.ksk.co.in

**********************************************************************

Trading tips


Never try to fight a trend by taking positions against the prevailing trend. Though it may be always tempting to buy a stock that is falling with an intention to lower the average cost of acquisition, such a practice should be avoided. This will be tantamount to throwing good money after bad.


Always have a stop-loss and an exit price clearly defined before making a trading decision.


There are several methods to arrive at stop-loss levels. If you are unable to identify a logical or reliable stop-loss level, use a fixed money-based stop method, which fits into your psychological comfort zone.


Never hold on to a trading or investment position that has moved past your psychological zone of comfort.


If you are not disciplined to cut positions on the breach of stop-loss, it could turn out to be a psychologically arduous task to cut those loss-making positions when prices keep moving against you.


Always take care of your losses and profit would take care of themselves.

Periodical profit booking and re-entry on fresh "buy" triggers are crucial aspects of success in stock market investing. There is nothing wrong or inconsistent in buying a stock at slightly higher levels after having booked profit earlier.


Keep track of stocks you find are in a long-term upward trend and take positions on fresh "buy" triggers. The key aspect is to ensure that the long-term trend is intact and there is a valid reason to take fresh exposures.


Even after the stop-loss is hit, investors should not ignore the stock they have been tracking.


It may well turn out that the stock could reverse trend and get back to the target zone envisaged earlier.


The stop-loss might have been hit owing to either an incorrect stop loss or a change in the short-term trend. The stock price may reverse at lower levels and manage to move to the earlier determined target zone.


Not willing to play a guessing game


Various technical indicators in the derivative segment (detailed below) captured the nervousness and weakness in the underlying market over the past month. However, the primary reason for the indicators turning weak is low trading volumes, suggesting that not many investors were willing to take bold calls in a volatile market.


Volatility


When dealing in options, one has to consider two kinds of volatility — historical and implied.


Historical volatility measures how erratic or volatile the stock has been in the past while implied volatility (IV) measures the market's perception of how erratic or volatile it may be in future.


In determining whether options are cheap or expensive, it is the volatility that offers the clues. When a stock is fluctuating wildly, it is volatile, which in turn increases the volatility component. When volatility increases, so do option prices. When stocks are stagnant, volatility decreases which, in turn, brings down the option premiums. Now, with the market swinging wildly almost on a daily basis, volatility levels have surged to historic highs.


Put/call ratio

It is a ratio of the trading volume (and open interest) of put to call options. For example, a high volume of puts compared to calls indicates a bearish sentiment in the market. As this ratio increases, it can be interpreted to mean that investors are putting their money into put options rather than call options. An increase in traded put options signals that investors are either starting to speculate that the market will move lower, or starting to hedge their portfolios in case of a sell-off. However, investors have predominantly used put options only as hedging tools.

------------------------------------------------------------------------------------------------------

DISCLAIMER:


The stock picks and recommendations are based on the information we collect regarding those stocks. However it's your discretion to select a stock to buy/sell and you have to use your personal check about the price or news related to those stocks and use your due diligence before buying or selling any stock. And you've to understand that we're not responsible for your loss/profit on our stock recommendations or picks.