Thursday, November 26, 2015

HDFC Ltd...awaiting a break out

Housing Development Finance Corporation Ltd ( HDFC Ltd)
I got an alert from about HDFC Ltd on Thursday. The alert is as follows.
Price moved up by 2.33% 
Fast MACD (12,26) crossed above Signal line. (Bullish). 
Traded Quantity is more than 61.05% of 30 day average traded quantity and Price moved up by 2.33% (Bullish) 
So I checked its chart.
The stock shows a firm support at Rs 1,160-1,170 price zone. Accumulation is happening at this price zone. Volume has increased significantly. It shows conviction. The stock should be watched.
It will go back to Rs 1,350. Beyond that it is all blue skies.

Wednesday, November 18, 2015

200 EMA: The battleline between Bulls and Bears

Today I got an alert from about MRF, having a 200 EMA crossover.
So let us analyse the 200 EMA. This is an exponential moving average of prices over the past 200 trading days. They say that Bulls reside above this line and Bears below. MRF is showing strength to sustain its prices above the 200 EMA. It is also finding price support zone at the same place; Rs 38,000. The stock was overbought at Rs 46,000 and corrected gradually, drifting all the way to Rs 38,000. The stock had rallied from Rs 32,000 to Rs 46,000. That is Rs 14,000 ride. It has now completed its correction of Rs 8,000, i.e. more than 50 %. All these indicate that there is a reasonable chance that the stock has completed its correction and is now in a consolidation mode. A rally to Rs 42,000 is possible in the medium term.

Saturday, October 31, 2015

Larsen & Toubro ( L&T ): My favourite company and its battered chart

Larsen & Toubro
L&T made a double top at Rs 1,900 and started a steep correction from 07 Aug 2015. Yesterday's second quarter results have battered the chart further. It found its long term support at Rs 1,400 yesterday. The current EPS of L&T is Rs 52. At 15% growth, the next EPS would be Rs 59.8 ( 52 x 1.15 = 59.8).
At Rs 1400, the P/E multiple works out to 23.5 ( 1400/59.8=23.41). Even this is overpriced.
I have a feeling that L&T may test the long term support deeper down at Rs 1,220. ( 1220/59.8=20) at a comfortable P/E of 20.
For traders the trading zone lies between 1400 to 1600 and may be 1220 to 1400. It might take a while for the stock to retest it lifetime high of 1900. So be patient. Trade it or keep it or accumulate it. A blue chip is a bluer chip at even lower and lower prices.

Wednesday, October 28, 2015

HDFC Bank: Awaiting a breakout beyond life time high

HDFC Bank is my favourite stock these days. It is showing all signs of a new breakout. It is likely to go beyond its lifetime high sooner than later. EMAs, MACD,RSI,Candlesticks...all indicators are indicating a  'Go'. Investors in search of a wealth creating idea could look at this stock and take their call.

Tuesday, September 16, 2014

Next two months

Some thoughts on how I feel things will pan out in India. In politics, election results of three Loksabha and some assembly seats are being declared today. The party in governance is likely to look forward to these results very keenly. Subsequently elections in Maharashtra and Haryana are likely to weigh heavily on their mind to assess their future plans of governance.PM's Japan and China interactions are likely to lead to major investments in the short term. PM's forthcoming US visit is also likely to encourage investment in India. These events are likely to strengthen INR Vs USD but RBI is not going to allow further appreciation of INR. In corporate developments, HDFC and HDFC Bank merger talk is gaining currency. Both scrips are likely to be in demand. Talk of SUUTI stake sale is in the air. hence ITC and L&T may see depressed prices because supply is imminent. IDFC is likely to witness some real price appreciation once they take steps towards their banking foray. Infrastructure projects are being approved by govt in a big way. Infra companies are likely to get good deals and announcements are likely to follow soon. Even though the profits accrue much later, market is likely to reward companies much earlier (close to announcements.) Drop in crude prices is going to benefit Tyre and Paint companies. So also reduce India's current account deficit. Petrol and diesel prices should drop. Inflation, hence also will be lower. So in short Indian economy is likely to see much better days sooner than later.

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Investments in stock markets is risky. Information and advice is based on technical analysis and is provided without any liability (financial or otherwise).

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