INFRASTRUCTURE :Allz is WELL: No It’s not looking good

Have you looked at the infra stocks. They have now been hammered beyond recognition. Just have a look at the charts of major infra companies


GMR Infra Chart

When UPA Government came to power in 2009: GMR Infra stock price was 82. Today it is 12 – down 85%. Stock market is writing off the company

GVK Power

When UPA Government came to power in 2009: GVK Power stock price was 45.8. Today it is 5.8 – down 87%. Can the company survive?

Lanco Infra

When UPA Government came to power in 2009: Lanco Infra stock price was 37. Today it is 5.2 – down 85%. Can the company survive?

JP Associates

When UPA Government came to power in 2009: JP Associates stock price was 138. Today it is 37 – down 73%. The company is leveraged and market is worried about state of finances and completion of projects.

Conclusion
There is very important lesson that these stocks give us. When things start turning bad, never underestimate how bad they can get. That’s the same problem people are making with Indian market as a whole and Indian economy. You cannot imagine how bad or worse things can get. So, better watch from sidelines than be brave.

IDEA: Slow and Steady Breakout delivers 70% returns in CY13

 

Slow and Steady wins the race. That’s what this breakout has delivered – stunning returns in slow and steady fashion.

Idea Breakout happened on 26th December 2012 above 100 with lots of excitement. I DID  COVERED THE STOCK THEN 
But in next 3 months – nothing major happened and stock pulled back to 103 again. Though first 3 months did prove that breakout was decisive. It meant stock was a BUY on pullback. That’s why stock took support at 103 and rallied again – and in next 4 months: stock rallied almost 70% to now at 168+. That’s a major major move in a CY where market has been in complete mess. That’s how Break outs work if they have to. Remember, there are many stocks that have failed in breakout move but when they work – that’s what they do: deliver huge upside gains

COAL INDIA HEADING TOWARDS 250

SELL COAL INDIA  FOR 250 + BROKE MULTIPLE LONG TERM SUPPORT BUY WAIT AND BUY 270 PE TOO

NTPC on its way to 105-110

  SELL NTPC BELOW 136 SL 141 TARGET 110 ( lot size 2000) ALSO RECOMMENDED 130 PE AT 2.45 PS

Disclosure :  Have Sold below 136 today in futures  made 129.8 low till now and 130 pe 4.00 rs

HITS AND MISSES OF JULY A REVIEW

YOU CAN REVIEW ALL MY RECOMMENDATION FOR THE MONTH OF JULY BELOW I CAN SAY  WE HAD A STUNNING MONTH WITH NOT EVEN A SINGLE MISS IN CASH SEGMENT THOSE WHO TRADED IN FUTURES& OPTION  WITH SINGLE LOT WOULD HAVE MADE MORE THAN 1 LAKH RUPEES PROFIT ALONE IN F&O

PERFORMANCE FOR THE MONTH OF JULY

HITS F&O

AMBUJA CEMENT 200 CA 1.75 MOVED TO 6.50 PROFITS 10000 RS

AMBUJA CEMENT 195 CA 3.00 MOVED TO 10 PROFITS 12000 RS

FINANCIAL TECHNOLOGY SOLD AT 690   LOT SIZE 500 COVERED AT 620 PROFIT 35000 RS

TECH MAHINDRA 1140 CA @ 20 RS   WE BOOKED OUT AT 53 HIT 58 PROFIT 8250 RS

HDFC 820 CA @ 10 RS HIT 19 RS PROFIT 2250 RS

SELL HAVELLS 728- 730 SL 740 TGT 690- 660  LOT SIZE 500( MEGA HIT INTRADAY ITSELF) STOCK ACHIEVED BOTH TARGETS  500*70= 35000 RS 

MISSES IN OPTIONS

HOT BUY M&M CAN BUY M&M 920 CA 15 RS SL TRIGGERED (MISS) LOSS 2000 RS

Buy PFC fut @ 142.5 Sl 140.5 tgt 148-50, also reco 150 ca @ 3.3-3.4 SL TRIGGRED (MISS) LOSS 2400 RS

SBI 2000 call seems interesting as a bet with sl of 20 and tgt 50 SL TRIGGED (MISS) LOSS 750 RS

HITS CASH SEGMENT

CALL OF THE MONTH

FINANCIAL TECHNOLOGY AND AMBUJA CEMENT

AMBUJA CEMENT   BUY ABOVE 188 TARGET 215 REACHED 212 (HIT)

FINANCIAL TECHNOLOGIES

SOLD AT 690   LOT SIZE 500 COVERED AT 620 PROFIT 35000

TARGET 600 ACHIEVED SUPER DUPER HIT CALL

AMARRAJA BATTERY BUY BETWEEN 240- 245   TARGET 280 ACHIEVED (HIT)

TCS BUY 1530 TGT 6- 10 %   TGT 1700+ BOOKED OUT AT 1770 (ACHIEVED SUPER HIT)

CESC BUY ABOVE 350 HIT 374 (HIT)

ALEMBICPHARMA BUY AT 138 AND AGAIN AT 149 TGT 170 ACHIVED (HIT) 2 TIMES

NATCAO PHARMA BUY GIVEN AT 430 STOCK WENT ALL THE WAY TO HIT 650  SUPER HIT ACHIEVED

WIPRO GIVEN BUY ABOVE 355 FOR 380 AND 390 BOTH TARGET ACHIEVED (SUPER HIT)

HCL TECH BUY 810- 815 TGT 890 ACHIEVED (SUPER HIT)

INDOCO REMEDIES BUY ABOVE 66 TGT 75 TARGET ACHIEVED

ONGC GIVEN BUY @ 290 ST TGT 320 LT 350 ST TARGET ACHIEVED IN 3 DAYS (HIT)

TECH MAHINDRA BUY 1125 ALREADY REACHED 1260  (HIT) 

HDFC BANK 805 – 810 REACHED 835 HIT

BIOCON told to buy above 305 FOR TARGET 325- 330 ACHIEVED (HIT)

JET AIRWAYS TOLD TO BUY ABOVE 378 FOR TARGET 430- 450 ACHIEVED TARGET 1 VERY QUICK MOVE JUST IN A DAY

KOTAK BANK TOLD TO SELL BELOW 680  FOR TARGET 640 ALREADY ACHIEVED 645

MISSES

NO MISSES STILL IN CASH SEGMENT

Capitulation in Midcaps

In the last couple of sessions we are seeing a lot of midcaps which were holding on are suddenly collapsing with no major announcement or news in the stock. Tough times for investors.

Some of the stocks are as below

Havells down 15%

tv 18 down 8% and is now down to 17 rs

NBCC is down 8% to 112 ———— ( Will need to rework on this at sub 100 levels will be interesting )

Triveni Turbine down 5% to 51   ( this can be interesting at 40-45 bucks )

Orient Cements down to 35 bucks ( This seems interesting )

Geometric Software is down 20% after results

—Vakrangee software  A risky company with LIC Stake mentioned yesterday is down on another 20% lower circuit

Vivimed Labs is down 10% and falling from 250 to 110 on lower circuits.

Plethico Pharma down on lower circuits

Innoventive Inds where IDFC mutual Fund bought a stake  at 130 bucks is on lower circuit at 40.

BGR Energy is down to 80 after founder expired. Last OFS was at 118

Nilkamal Plastics is down 8% at 110 ……………. ( this is a stock i have recommended at 190- levels to my long  term clients and facing a big hit)

Hanung Toys  – Another manipulated counter with debts at 10 times market cap as of today continues on lower circuit.

Navneet Publications down 5-7% with no reason

LIC Housing , BPCL, HPCL

Venus Remedies, TV Today , Sequent Specific, Lovable Lingerie and many others which are down 4-10% whereas the Nifty is down only a 1.2%

These are difficult times for investors. Some of the reasons could be .

-> Quite a lot of Managements are not trustworthy.

-> If the management is trustworthy the macro scenario is changing very fast.

-> The size of the companies are small and institutional investors have become totally anti-midcaps with the previous instances of bad managements.

-> There is absolutely No interest from retail and HNI so even if there is a company available at great value there will be a long gestation period till the macro changes and demand comes back.

-> Prices are a function of demand and supply. Current actions like PCAS and low liquidity otherwise also is a deterrent for any buyer and the demand is totally gone.

-> Majority of Indian companies are not keen to give big dividends which can reduce downsides. ( For example like NESCO but the company needs money so no dividends and so no re-rating of the stock )

-> At current levels many midcaps are terribly underprices but with no demand stock prices can continue to slide lower. Investors with a 1-3-5 years view will be rewarded but if you are looking at next 3 months be careful.

Some of the stocks which i liked and hold Smartlink has dropped from 548-55 levels to 43 today with low volumes. Available at 1/3rd the cash on books. Nucleus Software has added 100 crores to the cash in balance sheet in 2 years but stock at same price. The stock looks interesting at 60-70 bucks if one has a long term view. Am comfortable holding on to them for years to come.

We will discuss many such stocks which present value but the market price will be a function of demand supply which for now is not in favor.

Strategy ————– If you have studied the company and are comfortable about the long term prospects and margin of safety there is nothing to worry and rather should look for buying at unexpected levels.
If you have a short term view and stuck into some unknown stocks and with no research or conviction keep a stoploss and exit.
At the same time Nifty and the benchmark may continue to show a different picture.


Disclosure: For the past few months we have just been waiting and watching for new investment picks ( nursing losses on older picks )  and still not convinced with the technical picture for midcap space but are seriously looking for big bargains to cover up.
Some stocks we are watching NBCC at 80-100 , NMDC at 70-80 , Smartlink , Nucleus, Orient Cements, Arvind Limited and many more. Although the view is clearly now changing to 1-3 years and be ready for even a 20-40% drop from entry prices so to accumulate only and no big purchases.
Most importantly to buy a chunk of your exposure only takes few minutes to execute so technically the right thing we believe is to wait for the prices to give the hint.

Technical Trades have been doing good with some shorts like Financial Technologies , ,ITC   and longs like Bharti Airtel, Tech Mahindra , Biocon and so on. The focus has shifted purely to the top 100-200 stocks for now even when we are bullish or bearish in the short term. 

TRADE OF THE DAY : HAVELLS MINTED 35000 PROFIT INTRAY DAY

Havells reco to paid clients as Sell @ 728-30 sl 740 target 690- 660 lot size 500 hits All tgts lot 

stunning  fall minted mega profits 35000 rs stock even fell more to 630  far exceeding my targets

Stock fell below 50 dma before announcement of results today

So i initiated the short call in it