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Mid-cap stocks of the week Jan 08, 2005
The Mid cap stocks listed below are Nifty 500 components - liquid, traded easily and benchmarked volatility. These are stocks that we expect to out-perform the markets. It should be remembered that many of these stocks are trading with abnormally high volumes, maybe operator driven, and have appreciated significantly. Therefore, the risk element is likely to be very high. Take limited exposure to these stocks and maintain stop losses as specified.
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Individual stocks. |
Asahi India Safety Glass - The scrip was earlier recommended vide our edition dtd Dec 12, 2004 & Jan 02, 2005. Click here to view the previous reports. The stock has appreciated since then and we maintain our bullish outlook on the counter. The scrip has a high relative strength of 446 ( 100 = base ) and the oscillators are pointing towards a bullish future. Technical traders may note the inverted head and shoulders formation that has been confirmed after a closing above the 135 levels has been achieved. The short / medium term target is the 175 / 180 levels.
Your call of action - Hold the existing long positions and buy on declines to the 140 - 145 levels if a fall occurs. Hold with a stop loss at the 128 levels and expect to book profits at the 175 / 180 levels in the short / medium term.
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Birla Corp - this scrip was recommended earlier vide our editions dtd Oct 10, 2004 and has been a superlative performer. Click here to view the previous reports. The scrip exhibits classic higher tops and bottoms formation and the moving averages are rising in tandem with the price graph. The relative strength is rising higher and the scrip is likely to turn into a market out-performer. We recommend a buy on all declines.
Your call of action - Buy the scrip on all declines to the 155 and lower levels. Leave room for averaging till 135 / 140 levels and hold with a stop loss at the 125 levels. Expect to book profits at the 190 / 200 levels in the short / medium term in a conducive market.
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Gujarat Gas - this piped gas player in the western region is a blue chip of MNC parentage that has made an interesting chart pattern. The monthly chart below shows a breakout from a 30 month old bearish channel with a corresponding rise in the oscillators - confirming an upmove. The traded volumes on this scrip being lower, high exposure should be avoided. The oil & gas sector is showing higher relative strength and a possible re-rating is on the cards for this scrip. We recommend a buy on this counter for the discerning investor.
Your call of action - Buy at the current levels and hold with a stop loss at the 525 levels. Once the scrip surpasses the 640 levels, expect an accelerated upmove upto the 700 mark. Long term players can expect 700 - 750 levels in a few quarters time.
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ICI - this scrip was recommended earlier vide our edition dtd Nov 07 and Dec 26, 2004 and has appreciated since then. Click here to view the previous reports. The scrip has a high relative strength of 150 ( 100 = base ) and is likely to out-perform the markets in the coming months. Technical traders may note the scrip has closed at it's highest levels since Aug 1998 on the monthly charts. That indicates the underlying strength in the counter. The scrip has surpassed a short term resistance once it closed above the 210 levels. We recommend a buy on the counter for the patient investors.
Your call of action - Buy the scrip on minor declines to the 225 / 230 levels and hold with a stop loss at the 205 levels. Expect to book profits at the 260 / 270 levels in the short / medium term in a conducive market.
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Kesoram Inds - this scrip has been exhibiting a higher tops and bottoms formation on the charts and has a relative strength of 143 ( 100 = base ). The traded volumes have been rising in tandem with the price graph and the previous resistance levels of 118 have been surpassed. Technical traders may note that the scrip has been making a classic rounding bottoms formation on the monthly chart and is trading at it's highest since March 1995. That underlines the strength in the counter. A buy is recommended on the counter.
Your call of action - By at the 120 - 125 levels and keep room for averaging till the 105 levels. Maintain a stop loss at the 90 levels. Expect to book profits at the 165 - 175 levels in a few months time frame in a conducive market.
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Kirloskar Ferrous - this scrip was recommended vide our earlier edition dtd July 18 & July 25, 2004. Click here to view the previous reports. Traders will note how the price graph shows a rise with a corresponding rally in traded volumes. The scrip has seen a consistent rise in the relative strength which now stands at 153 ( 100 = base ) and the oscillators are pointing towards a further upmove on the counter. The previous highs of 38 levels will be a crucial threshold level where resistance will be encountered in the near term. Buy on a confirmatory breakout above this resistance point.
Your call of action - Buy above the 38 levels and hold with a stop loss at the 32 levels. Expect to book profits at the 45 - 50 levels in the medium term in a conducive market.
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Kirloskar Oil - this scrip has signalled a breakout on the charts and that too with a corresponding rise in traded volumes. Technical traders may note that the scrip is now trading at it's lifetime highs and that indicates a high degree of relative strength. It maybe noted how the high relative strength reads above 1100 levels ( 100 = base ) and the momentum oscillators are pointing towards a bullishness. Since this scrip is not highly liquid, we recommend a limited exposure on the counter. Buying is recommended.
Your call of action - Buying is recommended on minor declines to the 410 - 420 levels in case the markets reacts. In the event of the scrip not reacting lower, buying at current prices also is advisable. Hold with a liberal stop loss at the 375 levels and expect profit taking at the 500 + levels in the medium term in a conducive market.
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Noida Toll Bridge - this scrip is listed only on the BSE and is showing rising relative strength with higher prices. This scrip has surpassed a previous resistance after trading above the 11 levels and is likely to correct lower before rallying again. This scrip is a wildcard and can surprise investors over a medium term time frame. Buying is recommended in small lots for the patient investors.
Your call of action - buy at the 11 - 12 levels and hold with a stop loss at the 8 levels. expect to book profits at the 20 + levels in the medium term in a conducive market. We recommend a limited exposure on this counter.
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Shree Cements - this scrip was recommended vide our earlier newsletters dtd Dec 05, Dec 19 and Dec 26, 2004 and has performed well in the period. Click here to view the previous reports. This scrip logs a high relative strength of 435 ( 100 = base ) and is showing a higher tops and bottoms formation on the weekly charts. Technical traders may note that the scrip is trading at it's lifetime highs and is in a new trading zone with no resistance recorded. We recommend a buy on the counter for the patient medium / long term investor.
Your call of action - Buy the scrip on minor declines at the 275 levels and keep room for averaging till the 255 levels. Maintain a stop loss at the 235 levels and expect to book profits at the 350 + levels in a conducive market in the medium term.
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Shriram Transport - This scrip was recommended vide our earlier edition dtd Dec 12, 2004 and has zoomed since then. Click here to view the previous reports. The scrip has a high relative strength of 165 ( 100 = base ) and is rising in a higher tops and bottoms formation with support from the oscillators. The traded volumes have shown a quantum jump and the scrip has hit a lifetime high on the monthly charts. We recommend a hold / buy on declines for the patient investor.
Your call of action - buy at the current levels and keep room for averaging till the 35 levels. Maintain a stop loss at the 31 / 32 levels. Expect to book profits at the 50 + levels in the short / medium term in a conducive market.
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Suven Pharma - This scrip has shown tremendous relative strength inspite of the major volatility in the markets in the previous week. The scrip has managed to close at it's highest on the weekly charts, though intraday highs are higher. The traded volumes are rising and the oscillators are pointing towards a bullishness. Once the 128 levels are surpassed, expect an accelerated upmove on the counter as that will be an all time high. The relative strength is high at the 780 levels ( 100 = base ) and we recommend a buy on the counter.
Your call of action - Buy at the current levels and hold with a liberal stop loss at the 95 levels. Expect to book profits at the 145 - 150 levels in a conducive market in the medium term.
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CNX Mid-cap Index - The daily chart shows a fall as the index has cracked below the 13 & 30 day SMA's with the averages cutting lower and signalling a short term correction. The 2775 levels are a short term support which needs to be watched and should the index fall below this support on a consistent closing basis, expect the 2645 levels in the short term.
Your call of action - since this index is not tradable, this is an academic study only.
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- Have a profitable week.
- Vijay L Bhambwani
- Ceo :- Bsplindia.com
The author is a Mumbai based investment consultant and invites feedback at Vijay@BSPLindia.com and ( 022 ) 23438482 / 23400345.
SEBI disclosure :- The author has no positions in any securities mentioned above.
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