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Mid-cap stocks of the week May 21, 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. |
Adlabs - this entertainment / media scrip was recommended last week and has performed well as appreciation was seen in an otherwise lack lustre market. The stock now trades at a zero resistance zone and is making new highs with a rising tops and bottoms formation, which is confirming bullishness. Note the relative strength reading which has now achieved par status with the Nifty. The momentum oscillators are rising in tandem with the price line which does not indicate any advance breakdown warning. We recommend a hold on existing positions and a buy on declines for the medium / high risk appetite trader / investor.
Your call of action - Hold existing long positions and add on declines to the 150 levels. Expect to book profits at the 185 - 190 levels in a conducive market in the medium term. Maintain longs with a stop loss at the 134 level.
Ashok Leyland - this commercial vehicles major has been moving within a slightly bearish channel since Dec ' 04 and is making higher bottoms as can be seen from the minor trendline within the channel. The scrip is gaining upward momentum as can be seen from the oscillators in the graphic. The relative strength is marginally higher than the Nifty. A confirmatory breakout above the 26 levels will be the definitive buy signal for the bulls.
Your call of action - buy above the 26 levels and hold with a stop loss at the 22.50 - 23 levels. Expect to book profits at the 32 levels in the near / medium term. Over a longer time frame, expect higher levels.
BILT - this paper major was recommended last week and has inched higher. The upside potential on this counter is high and we maintain a buy on the scrip with a medium / long term view.
Your call of action - buy at the current levels and hold with a stop loss at the 97 levels. We expect the 124 - 132 levels in the medium term in a conducive market. Over the longer term, expect higher levels.
Goodlas Nerolac - After the recent recommendation on Berger paints, this is the second paint company being recommended. The scrip trades near it's lifetime highs and is making classic rising tops and bottoms formation. The relative strength against the Nifty is high at 272 ( where 100 = base ) and volumes are perking up. We recommend a buy on declines for the patient investor. For latest fundamental figures, click here to get a presentation from the company's website.
Your call of action - buy on declines to the 550 - 555 levels and hold with a liberal stop loss at the 500 levels. Expect to book profits above the 625 in the medium term and significantly higher levels over the long term.
Ind Card Cloth - this scrip is a beneficiary of the textile story and is in line with the Lakshmi Machine Works reco of last week. Note the text book style uptrend as higher tops and bottoms form on the weekly chart. Traded volumes are picking up and the oscillators are supporting the price on the upside. The scrip is in a zero resistance area and is turning into a strong market out-performer. We recommend a buy for the patient and disciplined investor.
Your call of action - Buy on declines to the 200 - 215 levels and leave room for averaging till the 178 mark. Expect to book profits at the 280 - 295 in a few months. Over the long term, we expect much higher levels.
Titan Inds - this scrip has had a significant upmove that is making it an strong market out-performer. Note the relative strength of 128 vis-a-vis the Nifty ( where 100 = base ) and the strong trend formation on the +DI-DI oscillator. Though the scrip has run up significantly, we recommend a buy on declines for the patient investor.
Your call of action - buy on declines to the 260 - 270 levels and hold with a stop loss at the 215 levels. We expect profit taking at the 300 + levels in the near / medium term. Significantly higher levels are possible over the longer term.
Trent Ltd - this scrip is a recommendation from the hot consumer retailing stories and is a blue bloodied story. A breakout above the 600 levels is a positive trigger that the bulls need to confirm a buy. A sustained close above the 600 levels is a recommended entry point for the high risk and patient investor. A high relative strength reading of 222 vis-a-vis the Nifty ( where 100 = base ) is a heartening indicator.
Your call of action - initiate a buy only after a sustained close above the 600 mark is achieved with higher volumes. Maintain a stop loss at the 540 levels and expect to book profits above the 710 levels in a conducive market in the medium term.
CNX Mid-cap Index - this index is showing signs of fatigue and resistance on the upsides and we feel the rally is likely to cap the upmove at the 3045 - 3060 mark in the coming week. The 2900 levels will be the effective support to watch out for.
Your call of action - this is an academic study only.
- 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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