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Midcap stocks of the week Oct 03, 2004
The Mid cap stocks listed below are mostly 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. |
Asian Hotels - This hospitality player is showing a bullish chart pattern as higher tops and bottoms formation is underway. The scrip is on the verge of a breakout into a new trading zone as the scrip is near it 6 year highs and the oscillators support the upmove. The hospitality business is expected to fare better due to increased tourist inflows, greater thrust on the F&B business and the liberal FDI norms which are witnessing increased business travellers into the country. The scrip is a buy on a breakout above the 217 mark.
Your call of action - Buy above the 217 levels with higher volumes and hold with a stop loss at the 202 levels. Expect to book profits at the 235 - 240 in a few weeks time in a firm market.
Anti Friction bearings - this bearings manufacturer was recommended earlier and has performed as per our expectations in the recent times. The traded volumes are relatively poor and are a cause for concern. Note the classic support provided by the short / medium term SMA's and the the rising tops and bottoms formation exhibited by the counter. We recommend a buy.
Your call of action - Buy at the current levels with a stop loss at the 42 levels and expecting a target price of 60 in a conducive market in the near / medium term.
Bajaj Auto Finance - this auto finance arm of the 2 wheeler major is moving in tandem with the parent company as the prospects of both are interwined. The scrip is moving in a higher tops and bottoms formation and is currently near it's highs which is a sign of strength. The oscillators are showing a further upmove being possible, provided the volumes improve significantly. We recommend a buy for the discerning delivery based investor.
Your call of action - Buy on minor declines at the 105 levels and hold with a stop loss at the 93 levels. Expect to book partial profits at the 120 levels and complete profits by 130 levels in 8 - 10 weeks time frame.
Bombay Dyeing - This textile major is exhibiting a bullish chart pattern as the scrip has consolidated between the marginally bearish channel formation which is now confirmed as a flag formation. Being a measuring move, flags allow chartists to forecast upside movements and since the movement within the flag was approximately Rs 50, the upsides from a breakout point at the 160 levels will also be Rs 50. Therefore a price target of Rs 210 maybe assumed in a bullish market scenario. We recommend a trading buy for mid cap players.
Your call of action - buy at the 175 - 180 levels and hold with a stop loss at the 160 mark. Expect profit taking at the 200 - 210 levels in a firm market in the near / medium term.
Cadila Healthcare - This is another midcap pharma story which holds promise. The scrip trades at a lifetime high at the 570 mark - which is close to the current market price. The stock is a strong market out-performer and shows relative strength of almost 6 times that of the BSE Sensex. The oscillators are pointing towards a further upmove and a price target of 650 should not be ruled out in a firm market where midcaps continue to attract polarised buying attention.
Your call of action - buy in small lots at the 530 - 540 levels and hold with a stop loss at the 490 levels. Expect a price target of 640 - 650 in the near to medium term in a firm market scenario.
CESC - this Bengal based power company has a fundamental story to tell in addition to being an attractive chart pattern. The debts are being re-structured, costs rationalised and the business model being revamped. Chartically, it is showing on the price graph which shows a saucer like formation in the last 10 months. The scrip currently trades near it's congestion zone and any breakout above the 125 mark will see an accelerated upmove by 20 % in the short / medium term. We recommend a buy.
Your call of action - buy at current prices and hold with a stop loss at the 103 levels and expect a price target of 140 - 145 in the near / medium term. Above 125 levels, we expect a rapid upmove.
Crest Communications - this scrip is currently trading near it's 2 year highs and is poised for explosive growth as the traded volumes improve. The oscillators are pointing towards an upmove and we recommend a speculative grade buy.
Your call of action - Buy at the current levels and hold with a stop loss at the 59 levels. Expect profit taking partially at the 82 levels and complete booking by 85 levels. Since this counter is not highly liquid, we recommend a lower exposure on this trade.
Gujarat Ind Power - another energy utility story with a bullish undertone. The counter trades with higher tops and bottoms formation with reasonably good volumes and the momentum oscillators showing a bullish undertone. The scrip is rapidly gaining strength and is getting to be a market performer as the relative strength oscillator shows. We recommend a buy on advances which will be a positive trigger for the counter.
Your call of action - Buy above the 65 mark and hold with a stop loss at the 57 mark. Expect a price target of 75 - 78 in the near to medium term in a bullish market.
Guj Mineral Development Corp of India - This scrip was recommended earlier as a bullish story and has making bullish chart patterns as the scrip exhibits rising tops and bottoms formations on the weekly chart below. The oscillators are moving in tandem and a breakout is likely above the 283 levels which is a significant point on the time / price charts. We recommend a trading / speculative grade buy on this scrip.
Your call of action - Buy on minor dips to the 250 - 255 levels and hold with a stop loss at the 232 levels. Expect a price target of 285 - 290 in a firm market in the near / medium term. We recommend a limited exposure on this counter.
Guj NRE Coke - this is another mid cap story that we cannot get enough of. This company is uniquely poised as a niche player in the coke sweepstakes and it's prospects are closely linked to the ferrous metals industry. The current business cycle for that industry is bullish and the chart pattern below indicates the bullishness in the undertone for this stock. We expect a triple digit mark for this stock in the near / medium term and recommend a hold on earlier positions and fresh buy on declines.
Your call of action - Hold earlier bullish positions and buy afresh on minor declines to the 75 levels with a stop loss at the 59 mark. Expect to book profits at the 100 levels in the near / medium term in a conducive market.
K Sera Sera - An entertainment media story as the company is in the film distribution / production business. The company has lined up an impressive array of releases in November and as that deadline approaches, the stock is making upmoves on the daily chart. The chart shows a consolidation in the current scenario as the scrip gets ample support at the 144 levels which is the 30 day SMA. As long as the counter keeps moving above the 151 levels, the outlook remains positive.
Your call of action - buy above the 151 mark and hold with a stop loss at the 141 levels. Expect the price target to be at the 165 levels.
SKF Bearing - this is an auto ancillary story that we have recommended in the past with positive results. The company is a MNC and a market leader in the bearings sweepstakes. With a boom in the auto sales, this company's prospects are bright too as the topline shows an impressive growth. We recommend a buy on the counter.
Your call of action - Buy at the 105 - 108 levels and hold with a stop loss at the 95 mark. Book partial profits at the 118 - 120 levels. Once the scrip surpasses the 122 levels, expect the 135 levels to be achieved rapidly.
Tata Sponge - this ferrous metals player from the Tata stable is trading near its lifetime ( 12 year ) highs which were at the 170 levels. That shows a good strength on the charts as the scrip has turned into a market out-performer of late. We have recommended this scrip earlier as a buy and we re-affirm our recommendation at current prices for the discerning and patient investor.
Your call of action - Buy at the current levels and hold with a stop loss at the 130 mark. We expect a price target of 200 and above in 12 - 16 weeks time frame in a bullish scenario.
- 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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