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

Remember this the next time you watch CNBC TV 18

While researching for trendzofmarket I came across this interesting factoid: The TV18 group which runs the CNBC TV-18 channel owns around 1.78% of a company called Refex Refrigerants.
Apparently,this stake was bought way back in Jan 2008 (when markets were at its peak).The purchase price?A princely Rs.200 per share.
At that time, B. Sai Kumar, Group COO of TV18 Group said:“We are very happy with this partnership since we believe that Refex’s aggressive growth plans combined with our ability to reach them in an engaging way and the reach of our multi-platform media vehicle will ensure that Refex is a significant player in the fast-growing environmental friendly refrigeration market”
Fast forward, five years later, Refex is quoting at 3 Rs/share..a colossal wealth destruction of 98% of its purchase price!!And TV18 is still clinging on its shares.
So running a 24 hour news channel is no guarantee that you will make money on your investments.
Remember this the next time you watch CNBC TV18 !

Vakrangee Software Pump and Dump – Lic buys 6.45% stake in last 1 year

As of yesterday Vakrangee is almost a 3800 cr market cap company quoting at 35 multiple.
Given the super growth in of 40 % in earnings over 10 years and 50% sales growth definitely the rise cannot be totally uncalled for.

In terms of market cap it is in the top 10 IT companies in India which is a kind of surprise. Only behind Mphasis and Tech Mahindra.
Whereas it is much bigger than hexaware , persistent , mindtree , financial tech.

The only concern with the stock has been that after such huge earnings and price growth  the stock has corrected sharply in 2000 and 2007 where it lost 80-90% from peak.

Missed the stock in 2006-2007 because could not understand felt better in 2008 seeing it fall. Same thing happened when i looked at it in 2010 – ( stock is up 10 times ). Maybe this time its different.

But can this time be different. We have LIC which has taken  6.45 % stake ) , Promoters have increased stake as well.

The only concern is why is LIC increasing stake quarter on quarter for the last 3-4 quarters and is now taken it to 6.45% stake which is a decent holding.

Today the stock is down 15% can it be the start of the dump. Will need to recheck on the fundamentals but previous drops in 2000/2001 and 2007 makes this a risky bet. Earnings growth and decent delivery volumes do not give much doubt but the steady rise in such tough market times shows control.

Got to be careful if you are holding this one.

Disclosure: No Holdings or vested interests in the above stock.

LIC runs a scam – Stock 2 – Zylog Systems

This is yet another company which was wanting to raise funds and could not and finally ended up in a big mess with promoters stake reducing.

Surprisingly LIC took stake quarters before the big fall started.

Lets look at the shareholding pattern change.

Some of the earlier holders in the stock were GIC ( which has been trading in zylog ) , UTI – Ascent India Fund and some marquee names of the markets like Sundar Iyer, Sharad Shah.

In March 2012 we saw the first major institutional fund – Max New York Life to be buying a 2.7 lakh shares or around 1.7%  and the stock saw a huge rally in that quarter.

 Then LIC bought the 2.3% stock or around 3.8 lakh shares. This was the highest the stock made.

 Further in the next quarter September 2012 LIC added more stake and made it to 3.22% or around 10.6 lakh shares. This is still a small investment for a large size of LIC of India.

 The next quarter December 2012 saw the stake going to 4.13% stake and we dont really know whether the stock was bought at 300 rs or at 60 rs. Yes the stock fell from 300 to 60 with promoter holding falling in a big way and margin selling.

LIC and GIC stick around with UTI reducing stake , marquee names selling out, Promoters margin selling done.

As of March 2013 LIC continues to hold stake and UTI continues to reduce stake

So yet another stock which goes from 300-320 to 15 rupees almost a drop of 95-99  %.
Surprisingly it seems the stock was waiting for LIC to finish its buying before falling all the way to the dumps.

Was it another case of a scam by LIC or a genuine company which went down the drain. Fundamentally the cash flow was always a concern with huge receivables.

All such bad companies fall only after LIC gets in fully with 5% stake There is no need to comment on why and what went behind the curtains for the stock but i get a new definition for LIC = LAST IN CORPORATION.

Although the company has made thousands of crores through the investments in large cap and such shady small deals do not make any dent into the balance sheet of LIC of India but the credibility lended by the name to such companies traps some retail investors. So no impact on the markets or LIC book . Like many investors suggest that you can invest max of 2% of your portfolio into penny stocks even LIC seems to be doing the same

Recent buying in Flexittuff International by LIC for around 4-5% stake also looks suspect though the stock has not fallen.

LIC, GIC, IFCI – A scam stake buy – Stock 1 – Kiri Industries ( Kiri Dyes )

In the last few posts have been mentioning about how LIC has been systematically been investing in some of the midcap companies which have no credentials and have led to huge losses.

This is the last post on questionable investments in Responsive Inds and Rainbow Papers

In a little older post have mentioned about how LIC had bought into Giitanjali Gems and Core Education before the big drop.

Now will be posting about some of LIC investments one buy one.

KIRI Industries

The company came out with an IPO at 150 rs which according to Crisil was graded as 2/5.

After dropping to 77-80 after the IPO the stock saw a rally to a high of 820 rupees. The stock is now avaliable at 5 rs.

Lets look at how LIC and even GIC,IFCI took stake in such a company with low credentials at higher levels.

In December 2009 shareholding – GIC was the first institutional investor to buy a 1% stake in the company.

In March 2010 GIC increased stake to 1.82%

 Then comes the big quarter of dumping to institutional investors – IFCI, GMO Emerging Market Fund, DSP Blackrock Midcap Fund, Sundaram Mutual Fund.

The promoter stake got reduced to 58% from 73% . Lot of market-men were also supposed to be part of the deal. This was the QIP issue brought by sole banker – First Global – aka Shankar Sharmas company at 597 rs.
They also come out with a report giving a target price of 1000 for the stock -

MARKET EYE-Kiri up, First Global sets 1000 rupees target

In the next 2 quarters DSP Blackrock was the first to exit with small losses and then Sundaram Midcap also got out. Finally even GMO and promoters sold.

The only ones holding the stake are now IFCI, LIC and GIC. Promoters have reduced stake to 27% and all the Cresta Fund, Mavi Investment fund , Well Prospering Limited and other operator circles are out.

This is the chart of the stock and the way it was propped up and placed to Institutional Investors.

 The concern is not the wrong investments by LIC, GIC and IFCI. Investors and institutions make mistake but they rectify it. But when everyone was getting out of this sinking ship why was IFCI, GIC and LIC still holding on to the stock. The stock is now down 99%

In absolute terms the investment is very small for LIC, GIC and IFCI because a 2 lakh shares is just 10 crores. LIC invests around 40k crore + every year so these investments seem to be small. Even the portfolio values of IFCI and GIC are very huge. Supposedly such deals are favorable for fund managers who get a cut on execution.

But if one has to look in the same way if such small numbers add up to 20-50 such stocks and larger sizes will become a very big number in a few thousand crores. For example LIC bought a stake in Welspun from operators like Sanjay Dangi who later came under probe for a value of 268 crores in 2010 is now worth less than 50-60 crores after 3-4 years of investment. The recent Gitanjali number also seems to be same.

Me would putting more such detailed posts on more such scam investments of LIC, GIC and other fund companies if possible in coming few days. Lets hope there is more activism and probe on the same. I have been tweeting about this scam for past few days.

There is another blog with only one post which has mentioned about many stocks in which LIC has invested – http://questionnableinvestments.blogspot.in/2013/07/lic-bigger-question-to-answer.html?m=1



P. S : One of my family member is a LIC agent and i also had belief in the investment process of LIC it makes me angry to see so many of such scam investments. Am not even talking about the PSU investments.
As a market analyst it is not advisable to write such posts but will hope for the best.

BIOCON FRESH BREAK OUT ABOVE 330

BIOCON I HAD WRITTEN ON POST ON JUNE 17
http://trendzofmarket.blogspot.in/2013/07/biocon-heading-to-325-330.html

TO BUY ABOVE 305 FOR TARGET 325- 330  STOCK ACHIEVED THE TARGET NOW I WOULD LIKE TO REVISIT THE STOCK FOR FRESH TARGETS

ICICI Bank stock: Breakdown?

Technically, ICICI Bank stock is not looking great. There are early signs of breakdown – not conclusive yet but signs of nervousness can be clearly seen.

Let us look at the ICICI Bank Weekly Chart

As you can see in the chart above:
Breakdown Phase (August 2011 – August 2012): ICICI Bank slipped below 980-1000 during Aug 2011 correction and post breakdown – the stock slipped sharply to 650. It was a brutal correction. It then took about 13 months to recover above 980. It was only in Sep 2012 that stock climbed past 980.
Recovery Phase (Sep 2013 till June 2013): The stock built a base around 980-1000 and rallied to 1250 by middle of May 2013. But with FIIs getting into sell mode – ICICI Bank corrected sharply from highs.
Breakdown??: And last week – the stock failed to hold above 980 and slipped and closed near 959. This looks like a BREAKDOWN. 
What does this mean?
Is stock again going back to 650? Is that even possible. We don’t know that yet. But one thing is for sure – if stock does not recover above 980-1000 in next few days, then yes stock appears very vulnerable for sharp declines. There are two news specific events to which stock has to react to by end of this month:
1. ICICI Bank Earnings by month end
2. RBI Monetary policy
Market participants would be watching stock price reaction. Any recovery above 980-1000 would be greeted by Bulls but any sustained weakness below 980-1000 will invite more nervousness and selling. Keep watching – may be an attractive trading opportunity is developing.

Kotak bank : H&S breakdown - Heading for 640-630

Kotak bank : H&S breakdown - Heading for 640-630 

 

AMBUJA CEMENT TO CRACK HARD 10 - 20 % TOMMORW PURE :( cheating of minority investors

  The much awaited announcement by Holcim has come out with the announcement of a restructuring where it will basically end up cleaning up the cash of Ambuja Cements.

This is the link on the proposed deal.

http://www.moneycontrol.com/news/business/holcim-ups-stakeambuja-cements_924432.html

This is the view from Anil Singhvi – ex CEO and MD of Ambuja Cements has lashed the holcim management as he sees no advantage in the Holcim – Ambuja merger. He calls this as a fraud on minority shareholders.

http://www.moneycontrol.com/news/business/see-no-advantageholcim-ambuja-merger-anil-singhvi_924520.html

Although Holcim owns majority stake in Ambuja Cements for last many years and it might be hurting to see the accumulated cash of 3800 crores lying unused So this deal augurs really well for Holcim and anyways who cares for the minority shareholders in India
Can any body be looking into this deal and stop such a hit on minority shareholders ?

The worst part about the decision is got a rumour in the day that Ambuja Cements may crack sharply tomorrow and the news has come out to be unfavorable !! How come some speculators are privy to such information.

Also more surprising is the fact stock rallied from 170 to 210 in last month. In last four days it has fallen from 212 to 190.
Was this a trap ? done by insiders or market players

A fall tomorrow seems inevitable but the extent is what market will decide. Some people expect a drop of 10-20% or even more.

This will be an interesting case. Will there be some activism and stop it ?

In India many promoters tend to screw minority shareholders through warrants, siphoning, royalty, pledging, CEO salaries and various ways. But when one sees large companies end up doing the same it is high time there is some activism and regulation. In another post will try to pick out some recent instances.

A BSE listed company uses cash to buy real estate ! after selling of the company !
A BSE listed company has a 90 cr theft loss and no FIR
A BSE listed company pays CEO 70 crores a year.
There are 10 BSE listed companies with the same address.

If time permits will write a post on the above.

There is a nice saying in India Businesses go Bankrupt and Promoters never Bank – Rupt in India means the Bank foots the bill ( NPAs and NPAs )

Wockhard collapses 20% in a day and 70% from Peak. Further dips a buying zone at 650-550

In the last couple of years the biggest gainer was Wockhardt moving from 300-500 zones to 2000-2200.
Mind you in 2008 it was one of the biggest pharma losers falling from 450 to 70 rs.

In the start of 2013 we saw a slew of reports on the stock at 1200-2200 levels Some targets may have been achieved but broking firms generally do not shift from a Buy to Sell directly and keep revising targets so that they keep getting access to the management.

One of the biggest initiation at top came by Bank of America Merill Lynch at 1930 levels. http://www.moneycontrol.com/news/business/bofa-merrill-initiates-wockhardtbuy_843094.html

Emkay also did initiate a buy at 1500 and targets got achieved but i doubt they reverted to sell.

Since then we have seen a spate of bad news on the stock and has collapsed to 670-700 levels. Let us look at it technically.

-> The major breakout happened in the stock on sustaining 380-430 resistance band and 600 next. This was the first indication of a long term trend change giving major upsides.

-> The next big signal to sell came only at 1600-1700 levels which was very clear.

-> On a longer term basis the stock may find a lot of support at 600-500 levels. As a matter of fact it can be an excellent buying opportunity into the stock at those levels.

-> The forthy move is over and one may see good support around 600. Investors may actually accumulate the stock on further dips if one can digest a dip to 500 in worst case. Upside we could be looking at 800-900 or higher again.

-> The current down fall is a mix of bad news and over participation which happened at 1800-2200 levels.



Conclusion – This is purely a technical take on the stock and we may keep a deep 20% stoploss and accumulate between 650-550 with a longer term view and reduce holdings on rise to 750 to lower costs.

Reliance Capital – Range Breakout target 430/460

Reliance Capital

There are around 3-5 attempts at the 390-395 mark in the last 6 months. The last couple of times the stock saw a violent fall to 310-320 where it almost looks like a double bottom.

Sustaining 395 opens up a move to 430/460 in the short term and maybe higher also all the way to 500. Looks like a nice Channel / Range breakout or even a cup and handle.

Given the stock is highly volatile as always the case with ADAG group stocks keep a stop of 380.

Banking Sector/Stocks Should be in Focus in August Series

Banking Sector/Stocks Should be in Focus in August Series

Bank Nifty

Reco going Long near 10800-900 levels , 11300 near today

Indusind :Reco going  Long @ 440-45 levels

470+ today

SBI : Reco Going Long Near 1800

1860+ today

Yes Bank : Reco Going Long Near 420-25 levels

Today hits 437-38

Kotak Bank :  Reco Going Long near 680 levels

Today hits 725

ICICI BANK Reco over here @ 960 levels is nearing 990+ today 

Disclosure : Were heavy longs in Some Selected Banks from Last week , slowly slowly Booking out of them in good gains now

Abv charts are the charts mailed to paid clients last week !!

For Paid Subscription email me at  trendzofmarket@gmail.com

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