Larsen and Toubro
Larsen and Toubro ( weekly, 3 years)
I have been away from my blog for a while. Reasons are other commitments and nothing much significant to write about. We have discussed issues like corruption in high places, poor governance as major threats to Indian equity markets. Those emerged in the past two months and markets corrected significantly. I am always happy when markets correct because that is when value emerges. Our all time favourites like HDFC, L&T, HDFC Bank and SBI have not corrected much in the carnage. Max to about 10 percent or so.
Corporates with good governance record and investor friendly attitude are likely to be favourites for deep pocket investors. As sentiment changes these scrips are likely to see good buying emerging.
In Larsen, I am expecting a price of Rs 3134. Time frame is never predictable in stock markets. Business growth can be predictable though.
My assumptions are:
1.With 30% annual growth it should take about two years for this target.
2. The resistance of 2172 will have to be crossed with good volumes for subsequent rise in the price.
Calculations are given below.
Rs 2172 and Rs 615 are weekly high and low over a three year chart as shown above.
Multiplying the difference with Fibonacci quotient of 1.618 and adding it to 615 gives me this value.
[{( 2172-615) x 1.618= 2519},{ (2519+615)=3134}].
Let us see how long it takes for this to prove right.
rgds
Vibhas
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7 comments:
Dear Vibahas Sir,
Nice to see you back...
Mean time I have studied a few charts. Will ask a few questions one by one -
1. Bajaj Auto - If u see its 1 yr weekly ( even 3 yr weekly), it has remained in overslod zone mostly and when ever came below it, has quickly gone back to oversold zone. Presently, on this long term chart , it is below overold zone. Whereas, 3 month daily chart shows RSI is touching over sold zone. Does it showing a good buying point in it? or shall wait further? if to wait up to waht value?
Dear Sir,
When I am going through Automobil sector, 2 wheeler as well as 4 wheelr seg, I can see that many of the big name stocks have been in selling mood since a couple of months and are nearing to Over sold line on RSI. Is there buying opportunity in Auto sector now.
Ex:
Ashok leyland - 3month daily is showing RSI at Over sold line, 1 yr weekly is alos showing RSI nearing that line. Can it be bought now or wait for further down fall?
Refer one year daily charts and look for supports on the left.
1.Bajaj Auto will be a good buy at 1400. Let bullish candlesticks appear and indicate a trend reversal.
2.Ashok Leyland will be a good buy at 58 to 60. Let bullish candlesticks appear and indicate trend reversal.
A word of advice. Please track only three to four stocks regularly and be a master of them. No need to track too many stocks. Even a single stock can create good wealth.
rgds
Vibhas
Vibhas Sir wish U a very happy & Prosperous New Year
Dear Vibahs Sir,
In the changed scenirio, what is the price for LT? where should it be brought?
When market sentiment is weak, even good stocks will succumb to selling pressure. Price points on chart are never rigid.
However stocks rebound as soon as dust settles down and sentiment improves.
Larsen is a good buy at 1750 to 1800 range. Use this downturn to add Larsen to your portfolio.
rgds
Vibhas
Dear Vibhas sir,
And about Baja Auto? Where it should it brought ? It is tumbling like any thing ....I mean has its fundamentals are in danger...shall we it bought at these levels ?
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