Tuesday, December 7, 2010

Myiris.Com: Trading strategy for 3 buzzing stocks

Trading strategy for 3 buzzing stocks

In an exclusive interview with Myiris.com, Prashanth Tapse, Sr. Research Analyst, Mehta Equities gave views on 3 buzzing stocks on Dec 6, 2010. The same are as follows:

Hero Honda Motors:

Shares of the two-wheeler motorcycle company plunged Rs 58.6, or 3.2%, to settle at Rs 1,773.85. The total volume of shares traded was 112,287 at the BSE (Monday).It touched a high of Rs 1,810 and a low of Rs 1,745.

Prashanth Tapse: Shares in Hero Honda (Q,N,C,F)* Motors, the largest motorcycle manufacturer, chopped down nearly 5% in early sessions mainly on the back of reports that the JV between Honda and Hero group to end. Institutional investors are feeling uncomfortable about the story building up in market. Hence with no clear visibility the stock had given negative signal in last couple of days especially when the news of the royalty payment and the transfer of shares to the promoters at a lower price had come out. On technical charts it can move down around 1600-1650 levels and hence we recommend investors to avoid the counter in the near term. We will re-visit the counter as and when precise information is available on the deal.


Shares of the German engineering group gained Rs 15.5, or 2.02%, to settle at Rs 781. The total volume of shares traded was 22,119 at the BSE (Monday). It touched a high of Rs 790 and a low of Rs 770.15.

Prashanth Tapse: The stock was in action on the back of news reporting which says that it has won an order of Rs 1.27 billion from Jaypee Sports International for equipping Formula 1 race track at Noida with electronic race control management systems. This project is scheduled to be completed within the next 10 months. Technically we believe that the stock is likely to outperform the broader market and expect 10%-50% upside from current level. One can trade with a target of 835-840 with a stop loss below 765 from medium term prospective.

Welspun Corp:

Shares of the company gained Rs 10.15, or 6.33%, to settle at Rs 170.45. The total volume of shares traded was 4,506,533 at the BSE (Monday). It touched a high of Rs 178.20 and a low of Rs 163.65.

Prashanth Tapse: Welspun Corp has reacted strongly on SEBI notices and plans to seek legal advice to challenge an order by the market regulator barring promoters and related entities from trading in the firm`s stocks, citing `fraudulent and unfair` trade practices. We believe that the over-all business will not be affected by the above issue and hence we advice Long-term investors can bet on Welspun Corp. We believe the stock has underperformed the broader markets and can be a good long-term investment given the business visibility and strong order book position. Technically the stock looks attractive with a target of Rs 200, which if broken can lead to significant gains. Hence we advice investors to hold on or trade for medium term prospective with a stoploss of Rs 160.

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