newsletter

Impulsive Wave Pattern

Wave Name	Construction	Termination
Wave 1	5175	5194.02
Wave 2	5194.02	5182.26
Wave 3	5182.26	5206.46
Wave 4	5206.46	5191.51
Wave 5	5191.51	5222.29

Wave-5 Expansion will continue till 5230.66

Corrective Wave Pattern

Wave Name	Construction	Termination
Wave -A	5224.8	5194.02
Wave- B	5194.02	5213.04
Wave- C	5213.04	5188.85

Wave-c Expansion will continue till 5182.27

Current Price is In the Corrective Cycle.Currective cycle will Fail if price rise to 5199.9

Selling is Advisable at 5213.04 with stoploss 5224.8 for Target 5188.85

 

MY CHART

Nifty :: Mix bias, High Wave Bullish Inverted Hammer with Bearish Shooting Star Three Gaps up bear candle pattern.. Volume is quite low compare to last two day’s.. Even after breakout Nifty unable to move up sharply.. Be careful at higher level… For 30th Dec. watch strong resistance zone 5215 to 5231 for shorting. Today’s low 5175 works as important level for 30th Dec....Below 5175 momentum slightly turns bearish for intraday. Our strategy for 30th Dec. if Nifty break 5175 after open, sell at high (S.L 5231) buy in deep, if hold support 5175 change strategy as buy in deep (S.L 5175) sell at high. As far as Nifty hold support 5119 nothing to worry for bulls... Resistance for up move at 5215/5222/5231/5244/5292.. Supports at 5175/5161/5152/5124/5119..

 

Rajeev Desai

Freinds,
I am trying to give my view on what one should do now at sensex 17k....
My thinking maybe totally wrong and there can be big difference in what I will write or what people will think, including my readers as well as experts........I am no match to those experts as I am not in contact of what FII's thinks or what DII's thinks or what HNI's think or for that matter what Fund manager thinks be it Indian for Foriegn.....So those who find views different then me should opt for what they think is correct.There is no bounding from me.It is yours money and you should know what needs to be done.....
I sometimes also feels that as one of the reader wrote me recently that majority of my picks which I gave in 2008 , the prices are way down from there.So have I am good enough to write at my blog?Well, it is ofcourse my blog and I can write whatever I think, but the question arises is if my picks do not do well then whether it is worth writing here......
He also ask me that he wants to learn from me how I pick up the stock.But I ask him, if I am not able to give proper picks , which are laggards and gives negative returns then why he should try to learn my way of picking stock......
He also once asked me that isn't it so that as market is running ,hence my picks are also doing good?Now when that is the case then where is the need to follow my blog?
He ask me if Luck is playing that much important role then why this boasting?Yes, I agree, that Luck plays important role but then in that case one needs to close the eye and put a fingure on any stock quote in ET or any business paper and buy it and if you have LUCK, you are always going to get great returns from that stock.......It is that simple....
He also tells me that I was never pessimist in whole 2008.Well, who was?Rakesh Jhunjhunwala
has said in an interview that he never thought that market will break 16k.We never saw him selling stocks in 2008.Did we?What that says?Did we saw Warren Buffet selling stocks in 2008?
Market broke 16k and even went down by 50% from there at 8k .......but RJ holding was still there.....
I have been adviced that the rule has changed.One need to sell fast and buy fast.Means take 10-20% profit and move to other stock.But according to me the rules has not changed.People holding stocks for LT has been rewarded by the market immensly and that has been proved again except the stock is proper.....
Now coming back to what one should do.........at 17,000 sensex....
Well, one should go ahead and BUY stocks if one sees value ......that is the most important thing one should understand......
As one of the reader pasted me an article of Dalal Street journal magazine ,in which it was written that many are still sceptic about the market and there are pockets who are waiting for correction.....
Value ,one will always find anytime.Was Burlington North cheap when Buffet decided to buy at 20-30% premium of market price?It was already $70-$73 and Buffet bougt at 20-25% premium....No one was ever able to see that before Buffet?Where were Marc Faber,Jim Rogers and likes ......or is it so that Buffet decision is wrong?He overly paid for Burlington North?Was Buffet thinking was wrong?

What one can see as a mistake can become a very great investment in future...I am sure many people were thinking that investment in HOEC was a blunder that RJ made but see where it is now and if one will see the latest annoucement , HOEC has all the ingrediants to go for 4 figure mark.



What is important in market is what one is able to read in future of any Co.Looking at present performance on earnings, one will say it is fully priced or overly priced but I can say that HOEC has the ability to touch 1000-1200 in due course time....I can read it from the news that are coming from HOEC .

HOEC remained dorment for almost 5 yrs and never ran in the last bull run.Instead it went on increasing capital through right issue, I think the right issue came twice......now what that will lead to.....Co is doing nothing and spending money and increasing the Eq.....and now see, before market makes new HIGH, HOEC is making new HIGHS......Analyst will always says that HOEC is overpriced.....Aree ,HOEC to kain lavato hase?Ema shun che......and those who didn't buy missed a multibagger.....
So the thing is , how you can FORESEE......how you can judge what is coming up.....that is the bottomline.....
So according to some experts if Bull market is when sensex crosses 21k...then we have a very long way to go and if one is thinking that India can grow much higher then this then one should stay invested as the peak has not come yet.
The euphoria is still not there.My way to seeing the euphoria will be when we will again see the column of 52 week high in ET becoming bigger and bigger....that has not yet comein.....I have seen some experts saying that all stocks has started running, cats and dogs ,and hence time to be catious, then I don't believe them as not all cats and dogs are running, Only those who have some story brewing up are running...At 17k, we are just 4k behind at all time high of sensex and hence cash gr stock has to matchup with it....this is not euphoria...there are many who are sitting in sidelines waiting for more correction....waiting for 13k or 12k.....as once Shankar Sharma categorically said that he sees 12k first before 21k comes......Untill those sitting on sidelines waiting for correction becomes desperate and start investing, thinking that they will now definately miss the bus...as market never gives the price at the rate you wants to enter and untill market gives that chance , it is not euphoria.....stocks that goes up is still coming back to give chance to buy at lower rate...the day the previous price stops coming back...market will starts its journey towards peaking out....

Page industries is an Indian Textile manufacturer with a strong presence in the undergarment segment. The company is the only Indian licensee of the US based leisure and innerwear brand – Jockey. It has become a common scene where a customer asks for a Jockey, instead of some briefs. The brand has such a strong recall especially among the college going and professionals. The company has a strong presence in underwear segment for both men and women and in a medium to premium pricing range.

Though there is a risk that the company is dependent on a single brand only, there seems to be a good rapport. Jockey International Inc had selected the company as the best International Licensee of the Year 2009. The company has also secured a license to manufacture and market the brand line in countries like Sri Lanka, Bangladesh and Nepal. However, the exports have not taken off in a big yet, though it is likely that they will get better at it. The company is an integrated player and has facilities to produce yarn, fabric production and to convert fabric into garments. The company has been constantly upgrading its capacity from 56 million pieces to 74 million in FY 09.

The key positives with the product offerings other than the strong brand recall is that they offer them on several price points and across categories like inner wear, leisure wear, sportswear and thermal wear for both men and women. The company has a strong footing in both premium and medium segment. Women’s inner wear current contribute to about 16% in revenues while the leisure wear contribute for around 18%. However, with the growing number of entry level professionals among the women, the women segment has a lot of potential.

The company other than having its own exclusive stores, sells them through tie ups with various retailers like Lifestyle and Shoppers’ stop. Currently, the company boasts of around 50 exclusive outlets, while having a target of 100 store in another 2 years. Other than the exclusive outlets, the products of the company are sold in around 16,200 retail outlets. The company has managed a strong and constant growth rates over the years and this can be attributed to the reason that the products are non discretionary. However, there is always a possibility that a customer will downgrade his brand in times of difficulty.

Ones looking for a stable business with a robust and steady growth rates can invest in this counter. Btw, the company is a strong dividend payer. The company has paid out 120% and 140% on the face value as dividends in the last 2 financial years.

 

 

 

 (Ilango)

 

 

NEWSLETTER

Bramesh

On Daily Charts We took support at rising trend line around 4945 and gave a wild and breath taking move which propelled nifty above it 20 SMA and 5 EMA.On Weekly charts we are seeing a rising trend line and if we cross 5210 in coming week short covering will propel us to higher levels.

Weekly Pivot:5107
Weekly Resistance:5269 5351
Weekly Support:5015 4853



On Daily Charts we have seen we are seeing a Avg. crossover og 20 SMA and 5 EMA which happened previously and nifty was propelled to higher levels.

Support at lower levels is at 5139 and 5099

On upside 5235 and 5377 will be resistance for Tuesday trading sessions.

 

 

Century Textile has formed a triple top at 510 levels.Stocks has bounced from its 50 SMA and trading above its 5 EMA.Buying is advised in the stock above 510 for a tgt of 513 518 and 526.SL 500



Escorts broke above its double top pattern with volume on friday.Stocks is a buy above 127 for a tgt of 129 131 137 support at 120



Reliace capital took support at 50 SMA and 61.8% Retracement lies at 861 considering the fall from 972 to 682.Target can be 868 876 891 920 SL 840 or below Support at 820.

RIL is facing resistace at its 50 SMA Buy above 1110 for a tgt of 1175 1195 sl 1060

 

TATA STEEL GOOD MED TERM BREAKOUT - TARGET 720

TATASTEEL has been trading above previous med term high of 585 for past two sessions and the volume is above average showing very bullish stance in medium term. It should target 745 with resistance at 700 and fibonacci target of 722. A BUY on any dip. 

 

 

 

 

(Bluechips 4 U)

POWER GRID (109.50)

ACCUMULATE for a 1st target of 120 and 2nd target of 135 with a stop loss of 103 on closing basis.

Time Tenor: 2 Months

Power Grid is one of the largest transmission utility company in the world. Atleast 45% of the power transmitted in India is through its network. With government keen on divestment in power sector PSU and liberalisation of power sector this company stands to gain a lot.

While the bulls are eating Christmas cakes, the bears seem to be eating humble pie as the Nifty ended well above 5100 and is now eyeing a new high for 2009. Wednesday’s sudden surge would have taken many by surprise. We reiterate that further short covering is not ruled out ahead of the F&O expiry. Also, some long build-up may take place amid signs that the economy and India Inc. may do better.

But clearly, any rise will not be sustainable in the absence of incremental good news – local as well as global. Rich valuations and concerns on an impending reversal in stimulus steps are among the major headwinds. One should not get carried away by any sharp swings in the near term as the market remains in a consolidation phase. Today we expect a higher opening. Asian markets are mostly up. US market got a boost from technology space, though the blue chips closed flat. European shares hit 14-month high. With several holidays on the horizon, the market could yet again turn choppy and clueless.

Midcaps might outperform largecaps as they have not participated in the rally yesterday

Our favourite Hindalco gained more than 7 percent to close at RS 153. NTPC was another stock that has sprung to life after being subdued for a long time. The stock gained 7 percent to end the day at Rs 229. We have seen a broadbased rally with some window dressing by mutual funds coming in to play. There was some heavy year end fund buying in largecaps that helped the index. Expect some follow up buying today, but do not expect a repeat by the major indices today.

For a change, we have seen the Midcap and smallcap indices sidelined from the market activity as the Largecaps took the charge. Midcaps might make a come back today as they might catch up in today's trade. We recommend Deccan Chronicle for the second day in a row, even at these levels (Rs 168). also keep an eye on entertainment sector, watch out for stocks like NDTV, TV Today and last but not least Zee Entertainment Ltd.Penny pincher's might look at stocks like LML Ltd ad Lloyd Steel from a short term perspective

 

Ilango)

Technical analysis is practiced in two main categories namely chart patterns and indicators. Indicators are calculations based on the price of a stock/ Index and indicates trends, volatility and momentum. Indicators are often compared to "pulse, pressure check" of a patient by the doctor to assess the extent of the illness. Indicators help you assess the market for its momentum, direction, etc.

Indicators are used as a tool to gain further insight into the supply and demand of securities. Indicators are used to confirm price movement and the probability that the given move will continue. Along with using indicators as secondary confirmation tools, they can also be used as a basis for trading as they can form buy-and-sell signals.

Indicators are of two main types - leading and lagging - both differing in what they show users.
Leading Indicators are those created to precede the price movements of a security giving predictive qualities. Two of the most well-known leading indicators are the Relative Strength Index (RSI) and the Stochastics Oscillator. I have often identified the reversal with the additional help from Stochastics.

Lagging indicator is one that follows price movements and has less predictive qualities. The most well-known lagging indicator is the MACD. The usefulness of this indicator tends to be lower during non-trending periods.

A leading indicator is thought to be the strongest during periods of sideways trading ranges, while the lagging indicators are regarded as highly useful during trending periods and produce fewer buy-and-sell signals which allow the trader to capture more of the trend instead of being forced out of their position.

The stochastic oscillator is calculated as a percentage of a security's closing price to its price range over a given time period. For eg: If a 5 day range of an index is 100 points and the index has closed to day 80 points up from that 5 day low, the stochastic will be 80, near overbought. Similarly if the index closes quite close to the 5 day lows, a mere 20 point away from it, the stochastic is 20, near oversold. The oscillator's sensitivity to market movements can be reduced by adjusting the time period or by taking a moving average of the result. In an upward trend the price should be closing near the highs of the trading range and in a downward trend the price should be closing near the lows of the trading range. When this occurs it signals continued momentum and strength in the direction of the prevailing trend.

This leading indicator will create many buy and sell signals that make it better for choppy non-trending(Sideways) markets instead of trending markets where it is better to have less entry and exit points.


The stochastic oscillator is plotted within a range of 0 and 100 and signals overbought conditions above 80 and oversold conditions below 20. The stochastic oscillator contains two lines. The first line is the %K which is essentially the raw measure used to formulate the idea of momentum behind the oscillator. The second line is the %D which is simply a moving average of the %K. The %D line is considered to be the more important of the two lines as it produces better signals.

There are two main ways this indicator is used to form buy and sell signals are through crossovers and divergence.


Crossovers occur when Stochastic moves up from below 20 or 30 to generate a buy signal or moves down from above 70 or 80 to create a sell set up. It signals that the trend in the indicator is shifting and that this trend shift will lead to a certain movement in the price of the underlying security.
Divergence occurs when the direction of the price trend and the direction of the indicator trend are moving in the opposite direction. This signals that the direction of the price trend may be weakening as the underlying momentum is changing.

There are two types of divergence - positive and negative. Positive divergence occurs when the indicator is trending upward while the security is trending downward. This bullish signal suggests that the underlying momentum is starting to reverse and that traders may soon start to see the result of the change in the price of the security. Negative divergence gives a bearish signal as the underlying momentum is weakening during an uptrend.
When it is combined with EW, the effectiveness increases as during 3rd waves, it tends to remain in the "Overbought" or "Oversold" for longer than usual. During such a 3rd wave, the lagging indicator,Macd, works well.
We, now, have trendlines & Channels, Pivots with supports & Resistances, leading(Stochastics) and lagging(Macd) indicators combination in a Trading system that forms the basis of our "Tech.Table". Note that we are not obsessed by any indicator or any method but each one contributing its worth as in a "Cohesive TEAM" that can lead you into any challenging trading day. What is the one most important team member missing.? The strategist who can peek into the opponents (Market's) next move. We will cover next the Strategist, Elliott wave.

 

 

 

NEWSLETTER

II. Breaked out but yet to reach the target :

1. ALCHEM - 219
2. ASIANPAINT - 1968
3. AUROPHARMA - 1549
4. AVENTIS - 2500
5. BAJAJELEC - 1367
6. BANKBARODA - 832
7. BASF - 726
8. BPCL - 908
9. CENTRALBK - 243
10. CIPLA - 463
11. CLNINDIA - 592
12. CONCOR - 1929
13. COROMNFERT - 326
14. CRISIL - 6700
15. DABUR - 207
16. DRREDDY - 1283
17. EMAMILTD - 596
18. ENGINERSIN - 2268
19. ERAINFRA - 320
20. ESABINDIA - 909
21. EXIDEIND - 147
22. FDC -110
23. GAIL -575
24. GLAXO -2404
25. GLODYNE - 617
26. GUJRATGAS - 305
27. HINDZINC -2022
28. IGL - 271
29. INDUSINDBK - 248
30. INFOSYSTCH - 3790
31. IPCALAB - 1305
32. IRB - 380
33. ITC - 347
34. JAYSREETEA - 382
35. JINDALSTEL - 1033
36. JISJALEQS - 1307
37. JKIL - 228
38. KANSAINER - 1600
39. M&M - 1765
40. MARICO - 123
41. MARUTI - 2063
42. NBVENTURES - 613
43. OILCOUNTUB - 216
44. ORIENTABRA - 34.65
45. PIRHEALTH - 614
46. PNB - 1154
47. RENUKA - 307
48. SELAN - 563
49. SHREECEM - 3080
50. SIMBHSUGAR - 115
51. SUNPHARMA -2160
52. TCS -1180
53. TORNTPHARM - 485
54. TORNTPOWER - 486
55. UNIONBANK -404

3i INFO & ABG SHIP View

3IINFOTECH follow up view

On Tuesday, December 8, 2009 we posted about 3IINFOTECH a stock which Quoting around Rs.92 a target of Rs.110-120 in next 8-10months is excellent return and long term growth will be good if new investor can come in.

http://akprabhakar.blogspot.com/2009/12/icici-in-talks-to-sell-entire-stake-in.html

Talks for acquisition of ICICI Bank Ltd’s controlling 27% stake in 3i Infotech Ltd have veered to a likely price range of Rs 110-120 a share, sources told NewsWire18. http://www.business-standard.com/india/news/icici-bank-may-sell-3i-info-stake-to-us-pe-firm/380571/

Technical View: 3IINFO has made a double bottom of Rs.75 in Oct & Nov after correcting from high of Rs.105, and Rs.106 would be strong resistance being Gap-down level formed in 15/09/2009 after 16months the possibility of closing the gap can arise.

ABG SHIP looks good at Rs 199

ABG Shipyard Ltd. -- which earlier this month exited from a bidding war to gain control of Great Offshore Ltd. -- said Wednesday it will keep its remaining shares in the offshore oilfield services company.

• ABG and unit Eleventh Land Developers Pvt. Ltd. sold about 3.07 million shares--or an 8.27% stake--of Great Offshore Dec. 2. via a secondary market transaction.
• ABG--India's largest private shipbuilder by sales--now has only 571 shares in Great Offshore.
• ABG has outstanding shipbuilding orders of 126 billion rupees, which are to be serviced until 2014.
• "Globally, ships are getting decent charter rates," Mr Datar, ABG's CFO said. "The global shipbuilding market looks robust. We have had no cancellations so far."
• The company is investing 16 billion rupees to build a new facility at Dahej in the western state of Gujarat. The facility will include a unit to build jackup oil rigs. "About 85% of the facility is complete," he said, adding that the entire facility including a new ship lift should be ready by June.
• ABG has already received a $440 million order from Essar Oilfield Services Ltd., a unit of Essar Shipping Ports & Logistics Ltd., to supply two jackup oil rigs from mid-2011.
• Mr. Datar said ABG has no plan to raise funds and will finance the expansion from its cash reserves, currently at 10 billion rupees. The company has total debt of INR26 billion to 27 billion rupees, at 10%-10.5% interest rates, he said.

http://www.moneycontrol.com/news/business/experts-defend-abgs-move-to-exit-great-offshore-race_428871.html Experts defend ABG's move to exit Great Offshore race

http://online.wsj.com/article/SB10001424052748704254604574613562569855766.html?mod=googlenews_wsj ABG Shipyard to Keep Remaining Great Offshore Shares

 

SCRIP = VIP INDUSTRIES LTD. (NSE),
SCRIP CODE = VIPIND,
PREVIOUS CLOSE = 169.15,
STOP LOSS = 159,
TARGET = 266.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)

CHART AS ON 24-12-2009

WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE DECEMBER.
THE STOCHASTICS SHOWS A POSITIVE CROSSOVER.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TO MEDIUM TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.

Nishit Vadhavkar)

It was a mind-blowing rally on D-Street. The Nifty rallied to close at 2009 closing high of 5178. Santa Claus had come to town. Lets see where we can go from here.

It was a Bear Trap nicely set by having huge OI built at 5000 and 5100 calls. This is the third month running that OI has been used to mislead the punters.

The Markets rallied as anticipated from 4944, key support areas. They retraced all the losses made in 5-6 sessions in a couple of sessions. The Faster retracement theory states that this is a fresh up move.

The FIIs made huge purchases on both Wednesday and Thursday thus debunking that they are on vacations.

The FM came out with rosy GDP projections which proved to be trigger. Remember the Government has massive disinvestment to be made while the going is good. Expect more such noises.

The Dollar Index rallied from 74 to 78. It may retrace a few of the gains made. This rally in Indian equities has some more steam left.

The famous December - April effect will now come into play. I will post more on that later.

The US markets look all set to rally to their next pivot point of S&P 1166. That is a good 4 pc more up-move.

5300-5350 seems to be the next target areas based on both fundamental and technical factors.

I continue to SIP in Gold.

Remember while enjoying the present, on must plan for the future. What 2010 holds is a different post altogether. Lets use these holidays to plan for 2010.

Loading...

Dec 25, 2009

GODAWARI POWER WEEKLY PICK

 

 

 

 

 

GPIL broke out from medium term high with good volumes and the chart looks very bullish.The stock has immediate target of 232 and then 300 in med term.

(Ilango)

Infosys is moving higher in its 5th wave and making all time highs. When a scrip makes all time highs, it is difficult to put a target or resistances. The prices have overcome all the pent-up supply and moving higher due to good demand for the scrip.
Macd indicator shows a developing negative divergence, a factor which may be kept on the back of your mind to play a reversal in case the price reverses from the mentioned levels.

 

(ss)

Today, the Nifty posted its highest close at 5178.4 This weekly chart shows a channel and as long as we are in the channel, markets are bound to reach the upper boundary. During the past month, we saw some real crazy two way moves on intraday time frame. But when we step back from the intraday and daily noise, and take a look at the weekly frame, things become crystal clear - we are in an established uptrend, period.

NEWSLETTER

MY CHART

Nifty :: Insider day breakout generate fresh up move rally .Again made an Belt hold line body gap up bullish candle with volume.. Is this rally true or just short covering rally ..? Next day gives us clear picture about this rally.. If this rally moving up as fresh buying rally then its firmly break triple top resistance 5182 on 24^th Dec.. If today’s move due to short covering only then its treading in side way with positive bias for 2/3 day’s and wait for good news.. Till then be careful below 5182 .. Our strategy for 24^th Dec. if Nifty face resistance after opining near 5182 then sell at high (S.L 5182) buy in deep (S.L 5085). If Nifty break 5182 then change strategy as buy in deep (S.L 5132) sell at high (S.L 5288).. Resistance for up move at 5182/5194/5112/ 5237/5255/5288.. Supports at 5132/5094/ 5085/5057/5026..

 Ilango)

Nifty's irregular correction was discussed once earlier. Any correction having its "b" wave moving above the "A" starting point hints at the underlying strength. And the same must have unfolded today with many stocks(frontline) making new uptrend highs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Some target calculations based on Futures prices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The EW possibility for the coming days.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This chart below is for educational purpose and it was fairly easy to follow.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One day's price move has reversed the TA totally. However, tomorrow's close will have some bearing on the weekly TA.

Days back, we came out with our views on Marg Ltd. However, we discontinued the article since we had discussed only the Marine Infrastructure arm and it was lengthy already. The first part of the article on Marg can be accessed HERE.

EPC - If you are expecting this company to be building huge power plants or roads or highways, well that isn't happening. Though the corporate site claims that they have presence in Roads and Power projects, nothing tangible has happened or is happening with the company.

Well you know how tricky and bold these guys are? This company is developing its port at Karaikal which is mostly funded by debt. In such a scenario, they were bold enough to buy a dredger for more than 60 Crore. If you were to wonder why not they rent it, that is where these guys are tricky. By owning this one dredger, the company plans to become a dredging company as well and have plans to rent them to other companies. Well, this dredger which is now being used at Karaikal Port is one of their activities in EPC, per the annual report.

The functioning of this arm is mostly for captive purpose only. It does not seem like the company is earning through EPC projects for third party entities. The EPC division of the company works on captive projects like the various residential projects of the company, commercial projects and yes of course the dredger. :)

Industrial Clusters - The company is working on a SEZ project named Marg Swarnabhoomi. The project is located Seekinakuppam, more than 80 Kms from the actual southern city limits (Thiruvanmiyur) of Chennai. The project is being developed on 612 acres of land and the projects aims at having a Engineering Service SEZ, Multi Services SEZ and residential area comprising 15,000 units.

The company is trying to sell the idea of Working closer to home, but at 80 Kms from the city limits, it is doubtful and we will have to wait and see how this project takes off. But, if i were to bet my result on the marketing abilities of the promoters, the results may turn out to be positive.

The promoters have roped in Bala Vidya Mandir, one the most prestigious schools in Chennai to come up with a branch in the SEZ. BVM has already come up with a residential school which is currently operational. Well, if there is something for which our Parents will go to any lengths, that is Education.

Leave out selling these 15,000 housing units, i was wondering how these guys will at least grab the eyeballs. But, they did. They launched a AR Rahman concert which was conducted in Marg Swarnabhoomi. The concert was attended by more than 25,000 people. And then they launched a program on Art of Living, where Shri Shri RaviShankar himself made his presence. And this attracted another 10,000 people.

Clearly, you need not teach marketing to the promoters of Marg. We will cover the Real estate business division and the financials in our next and final version.

 (Rajeev Desai)

What is valuation?How is it determined?What are the parametres to determine it.
We have seen experts of stock market speaking on Valuation.
The term use are undervalued, Overvalue or valuation at par....there can be many more names for giving ......
Now , how one can come on conclusion that the stock is overvalued or undervalued.I have a big PDF file which explains how to calculate the valuations that someone send me.I have saved it in my computer but has never read it.
If one will try to find a book on how to find valuation, they will find many books and after reading investor will find it fentestic and also would talk to some other stockmarket friend about that book and even refer it to read it.
Why I didn't go through that PDF File speaking on valuation?There are reasons for me not go read it.
I am not sure whether it is still there in my computer, so please don't ask for it........
I have seen that analyst who comes on business channel, says that so and so stock is now fully valued,means very less scope of going up.So one need to sell it or bookprofit in it.
Some stock expert says it is undervalued and can be bought.
I have seen one fund house or FII's or brokerage house giving a overvalued call on certain stock and other will come out with a buy call......in next couple of days......Now why that is happening?When one says it is overvalued why other is saying undervalued?
This gives the answer itself....there are different parametres to look at the valuations and all have different way to analyse it.One find overvalued other find undervalue....why so , because the growth one is able to see, other is not able to see.Or in other words,what one has got the firsthand information after meeting the management, other is not having that and hence one ends up saying it is overvalued and other end up saying it is undervalued........
Well, if there is not a big difference between two opinion then it is OK but when one says is totally opposite to what other say then whom to believe.
Valuation is not a constant thing.It keeps on changing,everyhour, everday , everyweek, everymonth or even everyyear.
A Co, say Aban Llyod, was overvalued in Jan 2009 and need to be sold with so big of debt and I was reading sell call from each and every house and in just one go......Crude started going up....valuation become cheap......look at the 52 week lows and 52 week high........of Aban Llyod....
Just a big order for a Co and stock become CHEAP......one product becomes successful and stock become undervalued.....
Valuation is a constantly changing thing.A stock can remain overvalued or fullyvalued for 2-3 yrs or even 4-5 yrs and suddenly the fortune changes and stock becomes darling and everyone wants to buy it......There are innumerable example like that in Indian Stock market as well in International market.
Valuation depends on how the economy is faring, how the Cos product is doing, what are the future potential of the Cos product,what world will need, how will be the demand,will perticular co will get beniffited from that and over and above that How market is doing.......there are so much of things to be taken care of that it is impossible to say anything on valuation front at anytime unless you have firsthand report.....on any Co.
Nestle was looking costly at 1600 to Dr Vikas and now at 2500 he is asking me whether it is a buy or not.
So at 1600 Nestle was overvalued and at 2500 it is not?Well that depends on how one thinks.If someone think that product will do good and has great future , one can definately go ahead and buy it at even this rate.
There is P/E ratio to decide.People looks at P/E .....sector p/e and see if that stock has lower p/e then other peers gr.....but that is also always not a great thing to do.Market can keep certain stock undervalued for a longer period of time and one can left with that stock not moving at all for entire whole bull run.......
Valuation is also related with demand and supply.If demand is more and supply is less then the stock can soar to great highs....irrespective of earnings.....
I have seen people (read expert) selling stocks at 3-5 times return and that stock went on to give 20-30 times return..............so noone can say that a stock is overvalued or undervalued......I think it is impossible to opine on that parametres.....
Have you ever met with a stock which when you see after 3-6 months or a year and you feel ,you missed it?These thing should have happened with each and everyone.I have no doubt about it.
Now why you were not able to buy it at that time ?What was the reason at that time that you missed such a great stock and ended up with something else which may be a laggard in your portfolio?Because at that time you were not able to see what is there in that stock and hence you didn't buy and those who were able to see bought it and making hay......
If the fundmanagers , analyst and some experts are so great in telling whether a stock is overvalued or undervalued then why their clients or funds Nav is still underpeforming even the return of market?
If they are great teller then they should show better return then the market gives but that is not the case........Very less funds gives above average return then market and very less gives same return like market .....
What is value then?Value is brand, value is management,value is growth, Value is foreseeing .....like when I wrote on SNL Bearing Ltd......it is NRB bearing managed Co .....which is showing positive bottomline.....and available at just Rs 11!Can one imagine a NRG Bearing runCo have such a less value? that is VALUE........Like I wrote on Yashraj Containeurs Ltd......great product and great clientele list and great earning .....and stock at 3-4 p/e?That is value.......and mind well, after doing all these market may not give the thumbs up to that stock...and one has to wait for longer period untill others find out.....

24-12-2009 SCRIP = DECCAN CHRONICLE HOLDINGS LTD. (NSE),
SCRIP CODE = DCHL,
PREVIOUS CLOSE = 167.95,
STOP LOSS = 162,
TARGET = 190.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)

CHART AS ON 23-12-2009

WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE DECEMBER.
THE STOCHASTICS, RSI AND MACD SHOW A POSITIVE CROSSOVER.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.

ECONOMY : Govt indicates that it prefers RBI to refrain fm hiking key policy
rates at this juncture, despite rising inflation.. Govt also pitches for
continuing with fiscal stimuli for atleast two more quarters, indicating the
forthcoming Budget is unlikely to reverse the cuts in excise duty/service tax
RIL : SEBI to consider appropriate action against co for allegedly routing
funds to dummy cos for buying large quantity of its own shares in 2000
HDFC : plans to disburse Rs30bn over the next two months under its spl.loan
scheme launched early this month
REAL ESTATE : HDFC V.Chmn says home loan interest rates are unlikely to move
up even if RBI hikes the cash reserve ratio as there is ample liquidity
L&T : President (Operations) cos sales wud grow at 14-15% in FY10 & op.margin
wud increase to 14% by Mar 10
NTPC : proposes to build a power project in Ghana in retrn for liquified
natural gas
AXIS BANK : puts overseas bond issue on hold as it waits for spreads to
narrow before it raises funds
DR REDDY’s : plans to launch generic version of Lipitor which has annual
sales of >$12bnin US mkts in next 2-3 yrs
BHARATI SHIPYARD : to consider another open offer for 20% more @ Rs 590/share
to acquire mgt control of Great Offshore
WELSPUN GRP: merging 3 promoter owned investment cos into Welspun investments
to unlock value and help raise funds
NIIT : has deferred its plans to raise Rs2.3bn thru QIP
INDUS IND BANK : says it has presented a roadmap to RBI on bringing down the
promoter stake to 10% over the next 2-3 years
PBA INFRA : bags order worth Rs 1.45bn from Oriental Structures Engineers
INDIABULLS FIN : ends JV with Societe Generale for Life Insurance
ONGC : declares Rs 18/shr mid yr dividend

 

 

newsletter

(Nooresh Merani)

Sensex Technical View :

Sensex seems to be taking support around the range of 16500-16600. The view remains as before the trend remains very positive till 16200 holds up on weekly closing basis.

If Index holds up above these levels for the next 2 weeks a move to 17.5k again cannot be ruled out.

But its time to be stock specific till we dont see a clear picture in coming days.

Stock Specific Technical View :

After quite some time a technical view on large cap stocks - The leaders SBI and Reliance which i expect could lead any upmove or downmove from here.

The charts would clear out the view.

SENSEX the next MULTIBAGGER .... a technical view ....

Planning for a Banglore edition on January 9. Would like to know if people would be interested. If yes please send in a mail to analyseindia@gmail.com. The seminar is open to all :)

SBI :

Multiple bottoms in the zone of 2060-2120.

Trendline support comes closer to 2095 zone. Holding these levels could give a smart bounce.

Only a break below 2060 would weaken the current trend. :

RELIANCE INDS :

Trendline support in the zone of 990-980. Holding on to this would signify strength.

Only a move below 960 on closing basis would lead to weakness.

LOK Housing :

Another high risk high return stock for next 2-4 mths. Earlier discussed many times. For the record advised to clients at 39/32 with long term view but small exposure.

Seems a fresh breakout could happen over 46 to take it higher.

Deccan Chronicle :

Good for short term on breakout... Traders keep a watch.

MY CHART

Nifty :: An insider day with positive bias.. Made Belt Hold line bull candle with low volume.. From last two days we constantly say that bounce may be possible near strong support zone due to over sold short term indicator and it is.. Now for 23^rd Dec watch first resistance 4998 above 4998 momentum turns positive at least for short term but face resistance near breakdown trend line at higher level.. Our strategy for 23^rd Dec. only above 4998 buy in deep (S.L 4935) Sell at high (S.L 5074) .Watch next strong resistance zone 5040 to 5075, if face resistance in between this zone change strategy as sell at high (S.L 5091) buy in deep (S.L 4998).. Resistance for up move at 4998/5040/5063/5075/ 5091.. Supports at 4962/4944/4935/4900..  

SCRIP = STEEL AUTH. (BSE),
SCRIP CODE = 500113,
PREVIOUS CLOSE = 225.5,
STOP LOSS = 218,
TARGET = 270.
FOR INTRADAY MOVEMENT OF THE STOCKFILTER PLEASE Click Here!
(OR CLICK THE LINK ABOVE LIVE SENSEX WATCH.)

CHART AS ON 22-12-2009

WITH A CONSIDERABLE RISE IN VOLUMES, THE STOCK HAS GIVEN A FRESH BREAKOUT IN THE LAST TRADING SESSION. THE STOCK WAS IN CONSOLIDATION SINCE DECEMBER.
THE STOCHASTICS, RSI AND MACD SHOW A POSITIVE CROSSOVER.
TECHNICAL ANALYSIS AND PORTFOLIO MANAGEMENT SUGGESTS THIS COUNTER GOOD FOR A SHORT TERM RANGE.
STRICTLY MAINTAIN AND FOLLOW THE STOP LOSS.

Balmer Lawrie & Company: Bargain Hunt begins!
21 Dec 2009
Balmer Lawrie & Company (BLC) is a diversified PSU having Mini Ratna status. Its business spans across
Industrial packaging – Manufacturing barrels and drums
Logistics Infrastructure – Container Freight stations and warehousing activities
Logistics Services – Air and related logistics activities
Travels and tours – Ticketing, tours and money changing activities
Greases and Lubricants
Tea blending and packaging
Leather Chemicals
Engineering and Technology services
Stock data (18 Dec 2009) BSE
Share Price (Rs.) 543
52 week high/low (Rs.) 600 / 204
Market Cap (Rs million) 8843
P/S (x) 0.54 P/E (x) 8.75
No. Of Shares (Million Nos.) 16.29
Average Daily Volume (6month) 13,471
The company is aiming to achieve Rs. 2000 crores revenues and Rs. 200 crores in PBT by the end of FY2010.
Amongst the segments, it can be seen that travel and tours contributes ~40% of the total revenues and Logistics Infra and services contribute ~24% of the total.
Considering profit margins, despite tours and travels contributing maximum to the revenues, bulk profits come from Logistics Infra and services (contributing 63% of PBT). This segment has the highest profitability (26% margins) and also the fastest growth whereas travel segment contribute only 14% of PBT and has very low margins of ~3.4%
Greases / lubes and Industrial Packaging segments are moderate growers with growth of ~7% and together contribute ~32% of the revenues.
Tea blending and engineering services are the least contributors to the revenues and profits. As tea blending division is a commodity product their returns are quite low and does not justify the capital allocation, especially for this segment. Even the revenues from this segment have declined by 15% in current financial year. The company may be planning to exit the tea business if these returns do not justify the investments
BLC has grown its sales by 13% CAGR since last 5 years and its net profits by 35% CAGR. The sales and net profits in FY09 were Rs.1636 crores and Rs.101 crores respectively. The company wants to push the sales to Rs.2000 crores by end of FY10 and is also making efforts to achieve PBT of 10% during that time frame.
Since last 5 years, Balmer Lawrie has been able to maintain ROE greater than 22% because of proper cost controls, effective working capital management and better utilization of resources. The company is also an effective cash generator and this can be seen from the fact the cash from operations is equivalent to net profits with minimal capex.
The company also has strong balance sheet with zero debt and has net worth of ~Rs. 390 crores in FY09. It also has substantial cash balance of ~Rs. 248 crores which it can use for expansions or it can payback its shareholders by increasing the dividend. BLC post an attractive dividend yield of ~3.5% and with impressive record increasing dividends.
BLC is setting up a lube and grease manufacturing plant in Indonesia through a 50:50 joint venture with a local company by investing ~US$5m (~Rs. 24 crores)
Key concerns:
BLC is diversified to various businesses and it seems that it requires focusing on its key growth drivers i.e. focusing especially on logistics infra / services, tours and travels, and industrial packaging.
The company also needs to reorganize its business units for better allocation of capital. For example: The returns generated by the tea business do not generate adequate returns on capital.
Valuation:
BLC seems fairly valued with P/E of ~9x, P/S of ~0.6x and P/B of 2.4 (the margin of safety is not there), but when the company is evaluated on segmental basis the stock is valued cheaply especially when the travel business is contributing ~40% (Rs.662 crores) of the revenues. The current IPO of Cox and Kings whose revenues were just ~Rs.155 crores is valued 17 times its sales and similar is the case of Thomas Cook also (5 times its sales). If those companies are getting valuations at this level then Balmer Lawrie should also fetch some decent valuations in the travel business. The price / sales ratio of the whole BLC is ~0.6 indicating that it is largely undervalued.
Other segments like Logistics infrastructure and services, Greases and lubes, and Industrial Packaging should be atleast valued at P/E 10-12 (Gateway Distriparks has P/E of 14, Castrol is available at P/E of 26). So by adding up the numbers, we get the fair value of ~Rs.1500 crore vs. mcap of Rs. ~900 crores for the whole company making a stock at really attractive “BUY”.