(short term perspective)
|
| Please click on the above link to view the disclosure document before reading this article. The contents may not be reproduced in any form without obtaining prior permission from the publisher. |
In this article let us discuss 5 India stocks that are bullish for short term.
Bhagwati Banquets and Hotels Limited
(Group: B1, Scrip Code: 532845):
The Grand Bhagwati is situated in the outskirts of Ahmedabad. It has 35 guest rooms and 2 grand suite rooms. It also has a conference hall with an open area of over 7,000 square foot suited for special events like exhibitions, fashion shows, product launch, premieres etc. besides large wedding & reception parties. In April 2007 the company came out with an IPO to raise funds for its proposed hotel project near Surat. The company declared a net profit of Rs.1.55 crores for the quarter ended June 2007.
The stock’s IPO issue price was 40. There was a mixed reaction to this IPO from the media that the valuations are stiff.
In the daily chart shown below, it can be seen that on the day of listing it made a high of 57.35 and closed at 49.05. The stock was on a downtrend and touched a low of 25.60 on August 6. On September 6 it had broken its previous resistance at 39.60 and closed above it; it continues to trade above it. The stock is likely to test its previous high of 57.35 in short term.
http://groups.google.com/group/theindiastreet/web/BHAGWATIHO_160907.jpg
BOC India Limited (Group: B1, Scrip Code: 523457):
This company specializes in industrial gases production. It was established in 1935 as Indian Oxygen and Acetylene company and currently it is a subsidiary of BOC group, which is a pioneer in air separation technology. BOC India produces industrial gases such as oxygen, nitrogen, acetylene, hydrogen, carbon dioxide and special purpose gases that are used in medical/industrial applications. The company’s net profits were worth Rs.44.6 crores in 2006 – 07.
http://groups.google.com/group/theindiastreet/web/BOC_160907.jpg
The stock has been hit badly in the last one year. It made a high of 242.90 on May 9, 2006. On April 3, 2007, it registered a low of 122. This support has not yet been broken, though the stock came down to 122.05 recently. After about 4 months consolidation pattern, it had broken its resistance at 149.90 and closed above it. The stock is expected to target 198 in short term.
De Nora India Limited (Group: B1, Scrip Code: 590031):
The company was formerly known as Titanor Components Limited. The Italian group De Nora has 51% stake in this company. De Nora group has developed membrane cell technology for the chlor alkali industry. Denora India supplies cathodic protection systems, ion exchange membrane cell components, electrochlorination systems etc. The company’s net profit for the quarter ended June 2007 was Rs.1.23 crores.
http://groups.google.com/group/theindiastreet/web/DENORA_160907.jpg
Like BOC, this stock too had lost severely in the last one year. It fell from a high of 379 in May 2006 to a low of 80.05 in March 2007. It registered a higher low of 93 on July 30. On September 13, it broke its previous high at 122 and closed above it with very good volumes . There is a possible downside risk of 10 rupees for this stock. However, it is likely to test 164 in the short term.
FDC Limited (Group: A, Scrip Code: 531599):
FDC Limited (formerly Fair Deal Corporation) is a leading pharmaceutical company in India with more than 70 years of operation.
Electral, a popular oral rehydration salt formulation by FDC
FDC manufactures formulations as well as active pharmaceutical ingredients. Formulations include antibiotics, antivirals, antifungals, oral rehydration salts, cardiovascular drugs, opthalmics etc. FDC exports its products to over 50 countries, including advanced markets such as the United States, United Kingdom and Japan. The company declared a net profit of Rs.65.6 crores for the financial year 2006 – 07.
http://groups.google.com/group/theindiastreet/web/FDC_160907.jpg
This stock had made a high of 66 in December 2004. It fell to a low of 27.05 on August 22, 2007. On September 14, it broke the previous high of 31.80 made on September 4 and closed above it with very good volumes. This is the first bullish breakout for the stock after a long time. The stock is expected to test its resistance at 36.80 in the short term. It has entered the third wave in daily chart; but it is still in the first wave in weekly chart. A correction after achieving the target of 36.80 cannot be ruled out.
TVS Motor Company Limited (Group: A, Scrip Code: 532343):
TVS Motor Company is the third largest two-wheeler manufacturer in India and among the top ten in the world, with an annual turnover of over USD 650 million. TVS first rolled out the TVS 50 moped in 1980 and later TVS Suzuki motorcycle. It reported total two wheeler sales of 102,734 units in August 2007 compared to 135,533 units in August 2006. The company’s net profit for the year 2006 – 07 was Rs.77.75 crores.
TVS Apache motorcycle
Like BOC and FDC, this too was a casualty since last year. Its high was 186.50 on April 5, 2006. From this, it had fallen to a low of 51 on April 3, 2007 (a loss of 72% in one year).
http://groups.google.com/group/theindiastreet/web/TVSMOTOR_160907.jpg
Over the last 5 months, the support at 51 has not been broken. On September 10 the stock had broken its resistance at 72 and closed above it with reasonably good volumes. The short term target for the stock works out to 90.
Sundaramurthy Vadivelu
| Suggested Reading |
| |
We gave a bullish µµµµµ rating for this stock previously. At that time the stock was on the 4th wave and as anticipated, it bounced back after hitting a low of 88.50. During the 5th wave, it managed to break the previous high at 120.55 but did not close above it. This move was not supported by the volumes either, as price increase was accompanied by declining volume (see chart). We can see a “doji” body with long upper shadow, meaning selling pressure at higher levels. It was followed by a red candle (bearish engulfing pattern) and another red candle as confirmation (three outside down pattern). Now the bearishness is confirmed and we modify our ratings to bearish ¶¶. Moreover it has formed a “double top” in daily charts and a close below 88.50 would mean further bearishness in medium term. 
We gave a bullish µµµµ rating last time. But the stock did not break its resistance at 301.35 on a weekly closing basis and a downtrend has started. It has just broken its 38.2% retracement at 242.75 and closed below it. This is perfectly alright, since a decline after a long first wave would be healthy one. 
We gave a bullish µµµµ rating for this stock. It declined from 387 to 340 in July but managed to bounce back after hitting the support trendline. A “bullish three inside up” pattern has been formed over the last 3 weeks, which confirms further uptrend. 
The stock failed to break its horizontal resistance at 34.50 on a close basis, though it achieved a high of 36.80 during the last week of June. 
A bearish three outside down pattern occurred in the stock after a strong consolidation pattern as shown below. 
It has formed an “ascending triangle breakout” as shown below. 
