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Midcap stocks of the week Sept 25, 2004
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. |
Aftek Infosys - This midcap technology counter has been exhibiting higher relative strength as compared to the overall markets and bucking the weak trend. The volumes have perked up in the last 3 weeks and the price graph shows a rising tops and bottoms formation. The recent trading pattern shows a sideways consolidation as the price graph displays a resistance at the 120 levels. Only a breakout above this level with heavy volumes will be a conclusive buy trigger.
Your call of action - Buy above the 121 levels if the breakout is on heavy volumes and the technology stocks are firm. Expect to book profits at the the 132 - 135 levels in the near term in a conducive market. Hold with a stop loss at the 113 levels.
FDC - this scrip was recommended in the previous edition and has been exhibiting a firm undertone as the upward momentum builds up on the charts. The mid cap pharma stocks are out-performing the markets and this company is an established niche player in it's segment. We recommend a hold / buy on declines strategy on this counter.
Your call of action - Buy the stock on declines to the 50 levels if the markets correct in the coming days. Hold with a stop loss at the 44 levels and expect to book profits at / above the 60 levels in a firm market in the near term. Long term players can expect to see higher levels over a 6 month time frame.
Gujarat Alkali - This caustic soda player is in an intermediate uptrend and has been rising with good volumes. The recent upmove has been accompanied by heavy volumes which are significantly higher than the 10 day average ( see chart ). The oscillators are signalling an uptrend and the short term average has been a reliable support on the downsides. We recommend a buy on this counter.
Your call of action - Buy above the 65 levels and hold with a stop loss at the 56 mark. Expect to book profits at the 80 mark in a conducive market in the short / medium term.
Guj Ind Power - This scrip has been consolidating between the 52 - 60 levels since 8 weeks and has signalled a breakout on high volumes which is a positive indicator. The traded volumes are 6 times higher than the 10 day average ( refer to chart ) and the scrip is above it's short / medium / long term averages. This is a sign of strength. We recommend a buy as long as the upward momentum sees the scrip above the 64 levels in the near term.
Your call of action - buy above the 64 levels and hold with a stop loss at the 58 mark. Expect to book profits at the 75 levels in the near term in a conducive market.
Guj NRE coke - this scrip has been in the news in the recent times as the steel sector has been in a bullish grip. The company in on an expansion spree and the triggers are positive. The traded volumes have slackened off and that remains a minor concern. The stock is near it's 4 month highs, which is also a resistance zone which needs to be surpassed for a breakout to be confirmed. Once a confirmatory breakout is signalled with higher volumes, a buy is recommended.
Your call of action - Buy above a breakout over the 70 levels with heavy volumes, and hold with a stop loss at the 59 levels. Expect a price of 85 in a quarter in a conducive market scenario. Longer term investors are likely to see even higher levels.
Ind swift Labs - This scrip was recommended last week and has appreciated since then. The stock is making higher tops and bottoms formations and the oscillators are indicating further bullishness. The scrip remains a hold / buy on declines in the current market scenario.
Your call of action - Buy at the current levels and maintain a stop loss at the 71 mark. Expect to book profits at the 94 - 97 levels in the near term in a conducive market.
Kesoram - this scrip is making clear higher tops and bottoms and is moving along it's 13 day SMA average, which is acting like a reliable support. The stock needs to surpass the 112 levels with higher volumes to signal a fresh breakout above the congestion zone. The volumes are healthy and a 25 % spurt in volumes on the breakout will be a healthy sign for the bulls.
Your call of action - Buy above the 112 levels and hold with a stop loss at the 104 levels. Expect a price target of 125 in the near / medium term in a conducive market.
Tata Sponge - this ferrous metals scrip was recommended last week also and has been making a higher tops formation and is currently consolidating near it's 2 month highs and getting good support at it's short and medium term averages ( 13 days ) which can be utilised as stop loss levels. We recommend a buy. Investors / traders need to note that a breakout above the 166 levels will propel this counter into a 12 year high, with almost no resistance on the upsides. A buy is recommended on this counter for the discerning investor / trader.
Your call of action - Buy the scrip on a breakout above the 161 levels and hold with a stop loss at the 146 levels. Expect to book part profits at the 180 levels and total profits at the 188 levels.
Valecha Engg - This scrip was recommended a fortnight ago and has been buzzing with good volumes. The stock gets good support at the 30 day SMA and should see the 135 - 140 levels in a firm market as long as the 108 levels are not violated. Buying is recommended in small lots at current levels.
Your call of action - buy at the 115 levels and hold with a stop loss at the 105 levels. Expect to book profits at the 130 - 135 levels in a conducive market in the near term. Buying is recommended in small / medium quantities.
- 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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