Thursday, June 23, 2011

How to trade in Titan, S Kumars, Four Soft now?

In an interview with, Prashanth Tapse, AVP Research,Mehta Equities, shared his views on technical outlook for three buzzing stocks on Wednesday, June 21. The same is as follows:

Titan Industries: In light of the current equity environment, Titan`s share price has risen 200%+ over 12-18 months as growth momentum in key segments and rising margins have driven the performance.

The stock is in action mainly on the back of news reports stating that company has rewarded its shareholders by issuing one bonus share for every share held (1:1 bonus) and also approved a sub-division of existing equity shares of Rs 10 face value into ten shares of Rs 1 each. This step was taken in order to improve the liquidity of its shares in the stock market and make them affordable to small investors. Looking ahead, we expect growth to be moderate and unlikely to sustain the current margins in jewellery likely to come under pressure. Hence we advice investor / traders to go short at the current levels with a target of 3,960.

S Kumars Nationwide: In last couple of days markets have been witnessing fear on the street on the back of consistent worries over shares being pledged or sold and Skumars is just a scapegoat in the present market scenario. The huge amount of positions were outstanding, market knew about these positions and suddenly by doing away with the automatic lending and borrowing mechanism these entire trade went off the market which triggered the markets which is negatively biased. The other theory is that some of the foreign fund houses, holding shares through participatory notes, are paring their positions, fearing increased scrutiny from Indian regulators because of the crackdown on black money held abroad. We expect stock to settle down at the current levels and trade in the range of 45-52 before taking fresh move.

Four Soft: The stock is in action mainly on the back of news reports stating that company has bagged a contract from Mexican company Logistics Dynamic Corporation. As part of the deal, Four Soft would offer its freight management application 4S eTrans and visibility system 4S Visilog on Software-as-a-Service (SAAS) model. On overall basis it is better to avoid this stock because lots of finer stocks are available in same space. Any run-up in the stock should be used as exit option in the counter.

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