Wednesday, December 8, 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 Dec 7, 2010. The same are as follows:

Coromandel International:

Shares of a fertilizers and pesticides manufacturer company gained Rs 20.3, or 3.6%, to settle at Rs 584.55. The total volume of shares traded was 102,545 at the BSE (Tuesday). It touched a high of Rs 606 and a low of Rs 560.

Prashanth Tapse: We believe CIL is well placed to benefit from growing demand for complex/customized fertilizers in India which helps for higher yields for Indian farmers. CIL is a leading agri-input company in India, has products ranging from conventional fertilizers (DAP and complex fertilizers) to an increasing number of non-subsidized products (organic compost, crop protection, specialty nutrients and rural retail). We have been quite positive on the fertilizer industry in last 3-6 months. Technically the stock is likely to outperform the broad market and expect 10% to 15% more upside from the level. Fresh position should be traded with a stop loss of Rs 542 with a medium term target of Rs 655.

State Bank (Q,N,C,F)* of India (SBI):

India`s leading bank shares declined Rs 87.45, or 2.96%, to settle at Rs 2,865.40. The total volume of shares traded was 1,066,620 at the BSE (Tuesday). It touched a high of Rs 2,950 and a low of Rs 2,850.

Prashanth Tapse: Today it was a clear sell signal in the entire banking universe. The banking index was trading 2.66 % lower. ICICI Bank fell 3 %, HDFC Bank declined 2.23% and SBI was trading 2.23% lower. We believe that̢۪s there is liquidity concerns which is one of the factors dragging banking stocks. In the recent days many banks have raised interest rates and also hiked deposit rates to attract funds which indicate for tighten of liquidity. Hence we advice traders to avoid PSU banks at this point of time and buy into private banking space. Technically we expect the SBI to consolidate at these levels or even test 2,740 before taking any fresh up move.

Hindustan Construction Company (HCC):

Shares of the construction company gained Rs 0.85, or 1.89%, to close at Rs 45.75. The total volume of shares traded was 5,647,015 at the BSE (Tuesday). It touched a high of Rs 47.50 and a low of Rs 45.

Prashanth Tapse: The stock was in action on the back of news reporting which says that Bombay High Court issued the Show-Cause notice on Lavasa Corp and asked the Union Environment Ministry to hear out the Hindustan Construction Co. (HCC) subsidiary on December 9. No construction will be conducted at Lavasa till December 16, according to the Bombay High Court order today. The Bombay High Court wants the Environment Ministry order to be presented to it by Dec. 16. On overall business we are positive on the core business activity as HCC has the potential to grow orders in hydro and nuclear power segments to counter-balance with the recent muted in order book inflow and high working capital for the core construction business. On Technically charts DOJI stars can be seen appearing representing indecisiveness about the counter in the market and hence we stand neutral on our view until and unless there is a clear signal on either side.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.


No comments: