INVESTMENT PORTFOLIO

Hello All,

Currently, i have 4 stock to recommend.

1. TRIDENT: A leading textile company is poised for a good growth  between 15-20%  CAGR in the next 3 years. Deleveraging of the balance sheet along with  better capacity utilization in the yarn along with a fully integrated textile play offers a lot of value.

BUY: CMP 58.1


2. CASTROL: A market leader in engine oil marketing is currently trading at a steep discount to its historic price.
BUY CMP 172.7


3. SUPREME IND: Supreme is a fully integrated plastic play. This company enjoys better margins compared to finolex and Nilkamal and has plenty of Niche , high margin products with entry barriers.
BUY AT 1230. TGT 1550

4.GODREJ CONSUMER: Godrej consumer has given cosistently given volume growth a margin expansion.

BUY CMP 1084 TGT 1350.

How to go about investing in the current market scenario

Hello All,

It has been a very volatile 2018. While the Nifty is more or less flat, the Midcap indices have corrected strongly leading to a substantial erosion of many of the portfolios. This may continue for some more time however i think, there are some of the stocks right now which offer value. The Idea is to buy some of  these stocks right now, and remaining at lower levels.

2018 is going to be a volatile year, as a few BJP run states are going for elections, The Currency is close to its all time high, and the OIL prices are also steady, which has weakened some of India's fundamentals.

To beat the market returns, one should follow 50% of the capital as investment portfolio and the remaining 50% as short term trading portfolio. 

Going forward i will be sharing many of the short term trades with you, as well as some investment ideas.

Thanks

Theme's for investing in 2015

Dear all,

2014 has been a very rewarding for indian equities, however i believe that more gains are to be made in 2015, however one should choose the sectors wisely, one may not expect the index to do that well, however few sectors will benefit, and will outperform.

The sectors are as follows:

* Information technology
* Pharma
* Chemicals
* FMCG
* PSU Banks
Reasons for outperformance: IT to do well, because of reasonable valuations, one should pick good companies with steady growth, like Eclerx, KPIT tech, HCL tech, & NIIT tech from current levels, expect about 30-35% returns from them next year.
Pharma to outperform because of steady growth, and many drugs going off patent in the US, like Sun Pharma, Cadila & Dr Reddy's for next year, one can expect them to give a return of 25%+ in 2015.
Chemicals Space is interesting as the sector will benefit from lower commodity prices, like Akzo nobel in paints, Rallis & UPL from insecticides sector  from the current levels.
Like FMCG for assured growth, despite of the sector being richly valued, like Godrej Consumer, and Jyothy labs, latter being the top pick in the space because of attractive valuations.
PSU Banks will outperform the private peers because of easing interest rates, and their cheap valuations. Syndicate, OBC, Canara & BoB are the top picks in the PSU bank space.

Trade with caution, Nifty may be headed for a deep correction

Looking at the recent rally, from 6000 to 6870 which was yesterdays high, nifty seems to be tiring out, & reasons for correction are plenty :
1. Divergence on the RSI
2. advance decline ratio is 1:1, which is not the case when market is roaring.
3. Elliott wave may be unfolding into diagonal triangle in its 5th wave..
4. Sky rocketing valuations.
5. Weak Macros, poor monsoons & tapering.

Smart Money is distributing with every rise in the Nifty, I believe we should go short below 6700, for a target of 6450. If one is  an aggressive trader keep the stop of 6870 and short the index.

IT sector looks great for investing, Infy looks great around 3150 , dont expect it to go below 3000, Wipro also looks interesting it should bottomout around 510-500, dont see it going below 500.

Best Regards
Ashutosh Mishra

Mob: +91 9743374152

Ideal stocks to Sell in the Current Market Rally

Markets have been simply become untradable in the recent times, with volatility reaching newer highers. We saw the markets rally significantly on the news of 120 Bn Euro for Euro growth plan. When we got a 500 bn LTRO in Jan 2012, we saw markets rally all the way form 4600-5500, however this time i see a good 250 point rally in the markets. This gives us a good opportunity to sell these stocks as the Nifty may rally to 5350-5400 levels in the Next few days. 

Here are my top picks to sell in the recent rally.

1. BoB: Fundamentally the stock was a blind buy around 640 levels however the kind of rally the stock has seen , shows the strength in the counter, however i see a risk with the bank as asset quality concerns still prevail. MD Mallya who has taken the bank to new heights is set to retire in october 2012, which will be negative for the stock.

Technically the stock faces a spree of resistances around 750, the 200 DMA , and a strong resistance @ 745 will be hard to take out. if the stock is unable to sustain the breakout (which is highly probable) we can expect lower levels. 

2. Hindalco

Hindalco is just an example from the commodity stock segment, with the chinese economy slowing the way it is, it will take a while for these stocks to rally significantly.The current rally can be used as an excellent opportunity to exit the stock. Book partial profit @ 126 and 133 around the 200 DMA. This in an excellent stock to own for a longer term and should be bought on dips.

Axis Bank

We have been slowly grinding around the 200 DMA for a while now, which is holding pretty well for some time now. There are strong supports around 5080 and 5020. The Earnings season has been fairly good, and the earnings for few key sectors like banks seems to have bottomed out, and their NPA profile also looks ok. Until somethings goes horribly wrong in Europe or China, we should hold these supports and should use the current dips to buy into stocks.

Axis Bank has been one of my favourites along with ICICI. The stock posted a good set up numbers today, PAT, NII, NIM and NPA profile was impressive, however the kind of correction the stock has seen call for a short covering rally, above its 200 DMA. I expect Axis to outperform next week and expect 1190-1200 in a week or two. A positional buy above 1110. 

BHEL

BHEL is one of the few stocks that has not been able to sustain its price post the liquidity driven rally, and is close to its December lows of 222.
Let my enumerate few problems with the sector as well as with BHEL.
1. BHEL has faced the sharpest drop in its orderbook in FY 12. The company had guided an expansion of about 10% in the order intake, however Its orderbook contracted about 66% from FY11. A significant chunk of orders were wiped out of its books due to cancellations, as the power sector faced problems with project executions and high fuel costs.
2. The market share of BHEL has dropped from about 70% in FY 12 to about 40-45% in FY12.
3. The sector faces a significant amount of overcapacity with BHEL being the leader of the pack. The power ministry also has revised its power capacity expansion downwards, which is worrying for BHEL.

Valuation: The stock is trading about 9.8 times FY 13 earnings which seems very cheap for a Bluechip like BHEL, however we can only expect an improvement in earnings if we witness a growth in its orderbook which looks unlikely atleast in H1 FY13. The likelihood of a further downside remains limited. The stock is an avoid for a short term investor  as the problems will take time to resolve but if one has a view of over an year,one can look to buy the stock as most of its issues are already priced in the stock.

Technically the stock looks weak as its consistently making lower highs and lower lows, however if 240 level holds we can see it a rally of about 15-20 Rs, trend reversal will only take place above 280-290 which represents very strong resistances for the stock.
A worrying pattern is one the chart is the head and shoulders pattern which the stock has made with a neckline at 244 , if this is taken out one can expect about 20 Rs correction in the stock price which represents the shoulder.