GOLDEN RULES FOR TRADING

Capital Goods Stocks Outlook for the week – 08 to 12.12.2014

Capital Goods Stocks Outlook for the week – 08 to 12.12.2014

Stocks of capital goods companies are likely to track the broad market, which in turn is expected
to be range bound due to lack of triggers next week. The only likely major trigger will be the
announcement of index of industrial production data for October on Friday. Last month, the IIP
data positively surprised the Street, leading to a surge in most stocks.

Long-term investors in sector bigwigs such as Larsen & Toubro and Bharat Heavy Electricals are
likely to buy on dips next week. The underlying sentiment in the market remains bullish as
investors hope the government's reforms will drive the investment cycle in the sector.

Economic activity has gathered pace, and business confidence improvement has created
congenial conditions for starting investment cycle. Thermax is likely to be in focus early next
week. The company said post market hours that it has won an order worth 3.51 bln rupees from
an African company for building and commissioning a power plant. Siemens is likely to extend gains next week, as the market continues to be bullish on mid- and small-cap shares.