Thursday, December 16, 2010 Trading strategy for 3 buzzing stocks

In an exclusive interview with, Prashanth Tapse, Sr. Research Analyst, Mehta Equities gave views on the following stocks for Dec. 15, 2010:

Patni Computer Systems (Patni):

Shares of the IT company gained Rs 21.7, or 4.71%, to settle at Rs 482.65. The total volume of shares traded was 110,958 at the BSE (Wednesday). It touched a high of Rs, 487 and a low of Rs 464.90.

Prashanth Tapse: Patni (Q,N,C,F)* gained momentum in last couple of days mainly on the back of reports stating that a consortium of Carlyle Group and Advent International has roped in former Wipro vice-chairman Vivek Paul as a partner to lead their bid to acquire the Indian firm. Technically we expect the stock to consolidate at these levels or even test 430 before taking any fresh upward move. Hence we advice traders to trade with a medium term target of Rs 510-520.

Lanco Infratech (Lanco Infra):

Shares of the infrastructure and power generation company Lanco Infratech gained Rs 0.3, or 0.49%, to settle at Rs 61.30. The total volume of shares traded was 528,226 at the BSE (Wednesday). It touched a high of Rs 65 and a low of Rs 60.65.

Prashanth Tapse: The stock was in action mainly on the back of its recent announcement regarding acquisition of Griffin Coal Mining and Carpenter Mine Management for an undisclosed amount. Griffin Coal owns the largest operational thermal coal mines in Western Australia. For Lanco it is a strategic acquisition and will add to power development. With this, Lanco will utilise the coal for domestic requirement and will be exporting the surplus quantity in due course. 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 60.50 with a medium term target of Rs 71.


Shares of the consumer products maker declined Rs 0.85, or 0.68%, to settle at Rs 123.65. The total volume of shares traded was 83,386 at the BSE (Wednesday). It touched a high of Rs 131.50 and a low of Rs 123.35.

Prashanth Tapse: Consumer products maker Marico is witnessing pressure from rising input costs, which is resulting in declining operative margins for the current fiscal. Copra is a key raw material which accounts 40% of Marico`s input costs have gone up by 60% (in the current quarter). Hence, we expect the above aspect would result in lower growth for the coming quarter results. To maintain the growth performance the firm is also looking for growth, both via organic and inorganic means, and is scouting for acquisitions in geographies such as Indonesia, Vietnam, Kenya and Nigeria, in the personal care space. Technically Rs 133 acts as a strong resistance level and any fresh position should be traded only after we see a close above the resistance level with a target of Rs 140-145 for medium term.

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