Thursday, November 25, 2010

Trading strategy for 3 buzzing stocks

In an exclusive interview with, Prashanth Tapse, Sr.Research Analyst, Mehta Equities gave views on 3 buzzing stocks on Nov 24, 2010. The same are as follows:

LIC Housing Finance

Shares of the company declined Rs 239.6, or 18.32%, to settle at Rs 1,068.55. It touched a high of Rs 1,312 and a low of Rs 1,030. The Central Bureau of Investigation has questioned the top officials of the company in connection with an alleged multi-crore fake home loans scandal.

Prashanth Tapse: It was unexpected news which took stock downhill after the Central Bureau of Investigation (CBI) has unearthed a fake housing scandal that runs into crores of rupees. LIC Housing Finance, Central Bank of India and some private sector developers are involved in the scam. On technical basis it was in over bought position at 1261. At the current market price, one can look to go short.

Edserv Softsystems

Shares of the company gained Rs 3.8, or 1.85%, to settle at Rs 209.15. It touched a high of Rs 222.50 and a low of Rs 206. The company has raised Rs 1.3 billion for its Pan-India expansion. The audit committee the company approved the issuance of Rs 100 million worth of equity warrants to Dainik Jagran.

Prashanth Tapse: EDSERV gained momentum in last couple of days being on the back of approval for issuing equity warrants to Dainik Jagran and earlier to this Bennett Coleman and company (BCCL) had also picked up stakes. With this EDSERV has completed the announced Rs 130-crore fund raising plan for the business expansion. The treaties signed with these top media houses will help in advertising and promotions activities, with options to market educational and placement services on press, TV and radio. BCCL has 45 radio stations across India while Dainik Jagran and HT Media will ensure that it reaches West, North and East India. Technically the stock looks attractive with a strong resistance at Rs 243, which if broken can lead to significant gains. Hence we advice investors to hold on or trade with a target Price of Rs 260 in the near term with a stoploss of Rs 208.

Jet Airways (India)

Shares of the company gained Rs 15.6, or 1.79%, to settle at Rs 886.10. It touched a high of Rs 911 and a low of Rs 873. The company`s international passenger traffic in October grew 18%, while its domestic passenger traffic rose 11%.

Prashanth Tapse: We believe Air traffic growth numbers has indicated good show in the counter. It is seen that air traffic growth continued on its path in October with the number of passengers carried by domestic airlines increasing by over 7lakh while Jet Airways and its no-frill subsidiary JetLite gained a market share of more than 26 per cent. it was followed by Kingfisher 19 per cent, Air India (Domestic) 17.7, IndiGo 16.8, SpiceJet 13.6 and GoAir 6.6. Technically we expect the stock to consolidate at these levels before taking any fresh move. We advice investors to book profit and add near 825 with a stop loss of 798.

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