India Street Stock Analyst upgrades and downgrades – Part 2

Disclosure

In this article let us review some stocks which are technically bullish. We will keep updating the ratings on a regular basis.

See Analyst Upgrades in Downgrades Part One

Following ratings are used to indicate the effectiveness of the trend:

««««« Strong

«««« Good

««« Medium

«« Moderate

« Weak

The effectiveness of the trend is arrived at after taking into account the retracements, momentum indicators, volume indicators and direction indicators.

The ratings are for medium term and these are based on weekly charts.

Cadila Healthcare Limited:

http://groups.google.com/group/theindiastreet/web/CADILAHC.JPG

A very interesting “inverse head and shoulder pattern” has been formed in the weekly chart of Cadila Healthcare. This is a bullish sign. This stock made a high of 400 in May last year. Watch the steep fall down to 225.50 in early June 2006. This amounts to 44% loss from its high. It did touch a high of 385 during November 2006. But, it could not break its resistance. Now it has taken almost 8 months to form this inverse head and shoulder pattern. The stock has successfully broken the resistances at 365.90 as well as 385. Now we have to wait for a close above its all time high at 400. This is a good example of how stocks can bounce back sharply after being hit worst. The target for the stock is around 545.

Rating for this stock: ««««

FDC Limited:

http://groups.google.com/group/theindiastreet/web/FDC.jpg

Another example of a stock losing more than half of its value in a bull market. It recorded a high of 66 in December 2004. It made lows of 39.55 and 33.10 in May 2005 and July 2006 respectively. In the monthly charts, 61.8% retracement works out to 33.15. The stock broke this level too in February 2007 and even managed to close below it. It has bounced back since then. There is a very nice wave formation in the chart. Apparently, wave 3 is in progress. The resistance at 34.50 has been broken. Now the next resistances are at 41.30 and 46.95.

Rating for the stock: «««

Global Vectra Helicorp Limited:

http://groups.google.com/group/theindiastreet/web/GLOBALVECT.JPG

This belongs to the aviation sector. From a low of 154.15 in November 2006 it went upto a high of 328.70 in February 2007. Again, it fell back to 178.05 in March 2007. After 14 weeks of consolidation phase, it has broken its short term resistance at 282.50 this week. It is likely to test its previous high soon. Looking at the strong consolidation pattern and break out it certainly seems to be a possibility.

Rating for the stock: ««««

S.Kumars Nationwide Limited:

http://groups.google.com/group/theindiastreet/web/SKUMARSYNF.jpg

This stock, along with JBF Industries and Bombay Rayon Fashions are the textile stocks that are moving up in a sector that is discarded by the market. Many popular textile stocks such as Bombay Dyeing, Raymond, Arvind Mill etc. are bearish. The stock has successfully broken its previous resistance at 84.40 in mid April 2007. However, the bears were into action immediately. A bearish engulfing pattern was formed and confirmed in weekly chart. This resulted in stock hitting a low of 73.50. One may see the similar pattern in February 2007. This month, it has once again broken its resistance at 87 and closed above it for three consecutive weeks on closing basis. Now the stock is likely to move up higher for target of 119.

Rating for the stock: «««

Additional Information:

We have been tracking Indiabulls Real Estate and mentioned here that it needs to close above 420. Today, on 25/06/07, it has closed at 426.25. Let us watch how the stock performs from now on.

SUNDARAMURTHY VADIVELU

The India Street

India Street Analyst - India Stock Upgrades and Downgrades – Part 1

In this article let us review some stocks which are technically bullish, bearish or sideways. We will keep updating the ratings on a regular basis.

Following ratings are used to indicate the effectiveness of the trend:

««««« Strong

«««« Good

««« Medium

«« Moderate

« Weak

The effectiveness of the trend is arrived at after taking into account the retracements, momentum indicators, volume indicators and direction indicators.

The ratings are for medium term and these are based on weekly charts.

Development Credit Bank (DCB):

http://groups.google.com/group/theindiastreet/web/DCB.JPG

The stock retraced from a low of 35 to a high of 86.40 during wave 1 as indicated in the chart. There was a mild sideways movement in between; it may not be called a wave since the stock never broke the 38.2% retracement and closed below it. 38.2% and 61.8% are the most important fibonacci retracements. That way, we will consider the entire movement from 35 to 86.40 as a single wave. This gives a retracement of 247%. The second wave’s low of 53 falls below 61.8% retracement, but never really closed below 50%. The third wave made a high of 120.55 or about 227% retracement. Currently the 4^th wave is in progress. As can be seen from the chart, there is consistent decline in price and volume. This indicates bullishness is intact. Stock is expected to test its previous high of 86.40. 61.8% retracement works out to 78.90 and the stock may bounce back between these two levels. Final target, going by the previous waves retracement history, may be around 160 (assuming the stock makes an exact low of 78.90 during the 4^th wave). Actual targets can be estimated after the stock bounces back. This stock is an ideal example of wave theory.

Rating for this stock: Bullish «««««

SICAL LOGISTICS LIMITED:

Yet another stock that has lost 50% from its previous high. From 580 during May 2006 it fell to a low of 144.05 in March 2007. The stock has broken its resistance at 256.15. The next resistance level is around 301.

http://groups.google.com/group/theindiastreet/web/SICAL.JPG

Watch the triangle breakout in the chart. It is a highly bullish sign. Though the stock may be in overbought condition due to the nearly 100% retracement in the first wave, it is bullish for the medium term. Any decline in this stock could be only an opportunity to enter. 61.8% retracement works out to 414, which could be the medium term target.

Rating for the stock: Bullish ««««

PSL Limited :

The stock, after making a high of 312 in January 2006 fell to a low of 158 in September 2006. It was in consolidation since then. The strong resistance around 250 was broken recently and it closed above it on a weekly basis. The momentum, direction and volume indicators favour further uptrend. The stock is likely to test its previous high of 312 shortly.

http://groups.google.com/group/theindiastreet/web/PSL.JPG

But the lack of volumes during the uptrend is a minor concern. However, if it manages to close above 312 on a weekly basis we can expect even further upward movement.

Rating for the stock: Bullish «««

Stocks that are bearish / sideways:

Stock	Status	Rating
ACC	BEARISH	««««
BOMBAY DYEING	BEARISH	«««
CIPLA	BEARISH	««
CAMBRIDGE	SIDEWAYS	«««««
ENGINEERS INDIA	SIDEWAYS	«««
TAMIL NADU PETRO	SIDEWAYS	«««

SUNDARAMURTHY VADIVELU