By Sundaramurthy Vadivelu
Our readers know that many people who analyze the stock markets have a technical background. Some are proficient in using computer and software packages. Few are chartered accountants or management graduates. But what is the mathematical probability of spotting the top 10 gainers or losers in a week or month?
In my humble opinion, if there is a method to find this, they could possibly become millionaires within few months time. The truth is that:
“Man proposes: God disposes.”
There is an interesting story by Father of our Nation, M.K. Gandhi about this famous Antithesis. Read more here.
Technical analysts have different styles of analysis; some use moving averages, technical indicators etc. Some others use chart patterns, candlestick patterns etc. Few others use their own customized ideas. At the end of the month, it is the CROWD that determines which stocks were most wanted or least wanted.
Given below are the top 10 Indian stocks that were most ‘wanted’ during August 2007.
| Scrip | % Gain |
| ETCNET | 140.78 |
| JAICORP | 86.33 |
| REIAGRO | 59.98 |
| NAGARFERT | 52.45 |
| ASSAMCO | 50.41 |
| PAVCI | 42.76 |
| AARVEEDEN | 39.50 |
| CHAMBALFERT | 33.86 |
| EVERONN | 33.34 |
| EMKAY | 31.35 |
The stocks listed above belong to either ‘A’ group or ‘B1’ group of Bombay Stock Exchange (BSE). The other groups like B2, S, T etc are not considered due to company size or listing issues.
ETC Networks:
http://groups.google.com/group/theindiastreet/web/ETCNET_300807.jpg
In my previous article, “Top Ten Signs a Stock is Going to Move up or down” we discussed about breakout from consolidation pattern. This stock had consolidated for nearly a year before breaking out during the second week of this month. It gained 92.71% in the week. On August 6 it went up by 11%, followed by two 20% upper freezes, one 10% upper freeze. On August 10 it gained 9.45%. It is certainly an unusual movment. Semi-active or inactive investors face lot of risk while dealing in stocks such as this, as price bands will be narrowed up by the exchange once the stock hits upper freezes continuously. The stock may also be transferred to “trade for trade” segment for surveillance action i.e. only delivery trading; stock bought today can be sold only after 2 working days.
In other words, intraday trading will not be permitted. Some brokerage houses do not allow “trade for trade” transactions from online trading terminals. One has to contact them and follow up continuously for sale of the “trade for trade” stocks. It is also one of the reasons we do not analyze these stocks.
Jai Corp Limited:
Another stock that hits upper freezes or lower freezes often. It is also known for its “single priced” dojis, giving no opportunity to buy i.e. open, high, low and close are all same.
REI Agro Limited:
This stock had a “triangle breakout” as shown in the weekly chart below.
http://groups.google.com/group/theindiastreet/web/REIAGRO_300807.jpg
It can be seen that this pattern had taken 21 months to form. At the time of breakout the volumes were not significant; but prices still went up. It means that the uptrend could become weaker.
Nagarjuna Fertilizers Limited was The India Street’s long term pick.
Assam Company broke its resistance on August 9. It had a 10% upper freeze on August 13 followed by four 5% upper freezes.
Panasonic AVC Network is also known to form single priced doji’s and hits upper freezes often.
Aarvee Denim & Exports was a bearish stock as on July 14. It nearly managed to test its previous low at 53. It is on the uptrend since August 7. At the time of our analysis the stock price was 73.75 and it closed at 59.90 on August 6, amounting to 18.78% loss.
Chambal Fertilizers broke its resistance at 37.40 on August 20. It was 20% upper frozen on the same day.
Everonn Systems India is being traded since August 1 and has not been affected much by the overall correction that the market witnessed in the last few weeks.
Emkay, after breaking out its resistance at 86 on July 6 had gone upto a high of 121.50. But it fell back to 85.55 on August 6. It again touched a high of 123.90 only to fall back to a low of 91.50. It has closed at 126.10 today.
Following table shows the top 10 stocks the crowd was least interested.
| Scrip | % Loss |
| GDL | 34.77 |
| OMNITECH | 25.03 |
| IILTD | 24.62 |
| ALLSEC | 24.12 |
| SUNTV | 22.48 |
| NUCLEUS | 22.09 |
| HIMACHLFUT | 21.37 |
| BINANIIND | 21.25 |
| RSSOFTWARE | 20.88 |
| ASIANELEC | 20.14 |
Gateway Distriparks Limited:
We discussed this stock in my earlier article, “5 India stocks to avoid (short term perspective)”.
Omnitech Infosolutions is being traded since August 14 only and data is insufficient to analyze. Insecticides India Limited is being traded since May 30 and keeps forming lower highs and lower lows. It is bearish in daily chart.
Allsec Technologies Limited is bearish in weekly chart. It has almost fallen to its support levels.
http://groups.google.com/group/theindiastreet/web/ALLSEC_300807.jpg
The weekly chart of SUNTV is shown below. It can be observed that the stock failed to break its resistance at 461.98 on a close basis. It keeps forming lower lows – a sign of bearishness.
http://groups.google.com/group/theindiastreet/web/SUNTV_300807.jpg
Nucleus Software, Himachal Futuristic, Binani Industries, RS Software and Asian Electronics are bearish in daily charts.
Sundaramurthy Vadivelu
LABELS: WINNERS AND LOSERS, ETC NETWORKS, NAGARJUNA FERTILIZERS, AARVEE DENIM EXPORTS, SUN TV, ALLSEC TECHNOLOGIES, EVERONN SYSTEMS, GATEWAY DISTRIPARKS, NUCLEUS SOFTWARE, ASIAN ELECTRONICS
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