Tag: technical analysis

Analysis: COLPAL

Abhishek March 26, 2013

Colgate-Palmolive [stockquote]COLPAL[/stockquote] investors have had a tough 2013. After hitting an all-time high of Rs. 1580, the stock has slid to Rs. 1250 levels – a whopping 21% drop. Investors have been worried about falling sales in spite of holding prices steady and the imminent entry of P&G into the oral-care market. That said, Colgate holds over 54% of the toothpaste market and has been busy expanding its distribution and marketing into rural areas where per capita consumption of toothpaste is half that of urban areas.

We were a short-term buy back in February. However, the technicals this time are giving mixed signals. Our 4-9-18 model has been flipping between buy and sell all of this month and Aroon is stuck in neutral. However, RSI levels seem to be headed toward over-sold levels, suggesting a bounce from support at Rs. 1250 levels is possible.

The stock does pay a fair amount of dividend – Rs. 8/share was recently announced and given that its in the FMCG space, it is more-or-less recession proof. An extremely low beta of 0.16 provides a certain measure of comfort during volatile times.

We would be buyer’s if the stock can hold on to its Rs. 1250 support levels over the next few days. Otherwise the next support is around Rs. 1200. This is a good stock to own for long-term buy-and-hold investors at these levels.

Categories Your Money Tags COLPAL, technical analysis

Analysis: TATASTEEL

Abhishek March 25, 2013March 25, 2013 1

We last took a look at TATASTEEL [stockquote]TATASTEEL[/stockquote] in October last year. We were waiting for a decisive breakout above the (down) trend-line before getting bullish on the stock. It made a 52 week low of Rs. 320 last Friday.

As you can see from the chart, the stock has tested the Rs. 320 levels twice before since 2009 and has bounced back each time. From a valuation point of view, it is trading at a PE of ~8 which is on par with its global peers like US Steel and Arcelor Mittal. Plus, the Tatas have been giving a Rs. 12 per share dividend since 2011. However, the global outlook for the metal is bearish, with European steel demand being down by 30%, and the industry remains highly fragmented.

So the question is will TATASTEEL be a good buy at today’s levels? The RSI indicator is at neutral and MACD is bearish. So from a technical point of view, it is a short-term sell. From a long-term perspective, it is trading at valuations that might be a good entry point for investors who can stomach volatility. If the stock closes above Rs. 320 levels today, it is a long-term buy from our point of view.

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Categories Your Money Tags TATASTEEL, technical analysis

Analysis: SHOPERSTOP

Abhishek March 22, 2013March 22, 2013

Today’s pick is SHOPERSTOP [stockquote]SHOPERSTOP[/stockquote]. The stock initially rushed to Rs. 400 points, but after facing resistance there it dropped to the Rs. 300 levels. After a couple of weeks support on this level, the stock started its up-move in June to see its 52 week’s high of Rs. 495 in December. Since then the stock has been on a downtrend. In the last three months, the stock moved -16% vs. -4% of Nifty’s.

Oscillator RSI and CMO are reaching the over-sold territory. The stock is currently trading in the lower range of the Bollinger bands. Short-term technical saw a bearish Gravestone Doji.

The MACD line and signal line are very close to each other and are not suggesting any direction. But the inversion in the histogram levels is giving early sign of an upcoming bullish move. Also, the Long-term and short-term GMMA lines are too close to give out any directional bias.

SHOPERSTOP’s average correlation with the Nifty is 0.44, which is positive. The scrip will be closely replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

SHOPERSTOP has a historical volatility in the narrow range of 0.5 to 1.1. The scrip’s volatility is currently in the lower end of the range.

Given the technicals, we suggest a short-term buy. A long-term call could be taken depending on the directional move of the GMMA lines and price action near the support levels of Rs. 360. Also, it is advisable to have a relaxed trailing stop-losses level to book profits in case of a trend-reversal.

For a better picture of the Retail sector as a whole, you can look at what the expert has to say here.

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Categories Your Money Tags SHOPERSTOP, technical analysis

Analysis: PANTALOONR

Abhishek March 21, 2013March 21, 2013

Today’s pick is PANTALOONR [stockquote]PANTALOONR[/stockquote]. The stock was trading in between Rs. 150 – Rs. 200 for most part of the year. It saw a bullish breakout of the range in November. The stock saw its 52 week’s high of Rs. 276 in January, and since then it is on a downtrend. In the last three months, the stock moved -32% vs. -4% of Nifty’s.

Oscillator RSI and CMO are in the over-sold territory. The stock is currently trading in the lower range of the Bollinger bands. Short-term technical saw a 9X4 bearish cross-over a few days ago.

The MACD line and signal line are very close to each other and are not suggesting any direction. Also, the Long-term and short-term GMMA lines are inverted in a bearish move.

PANTALOONR’s average correlation with the Nifty is 0.60, which is positive and strong. The scrip will be closely replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]

PANTALOONR has a historical volatility in the narrow range of 0.6 to 1.6. The scrip’s volatility is currently in the lower end of the range.

Given the technicals, we suggest a short-term buy. A long-term call could be taken depending on the directional move of the GMMA lines and price action near the support levels. Also, it is advisable to have a relaxed trailing stop-losses level to book profits in case of a trend-reversal.

For a better picture of the Retail sector as a whole, you can look at what the expert has to say here.

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Categories Your Money Tags PANTALOONR, technical analysis

Analysis: INDIAINFO

Abhishek March 20, 2013March 20, 2013

Today’s pick is INDIAINFO [stockquote]INDIAINFO[/stockquote]. The stock started the year with a rush towards Rs. 80 levels, after finding resistance around the levels, it started its descent to find support around Rs. 45 levels in May. Since then, the stock had been on an uptrend reaching its 52 week’s high of Rs. 92 in the month of December. However post December it is in a correction mode. In the last three months, the stock moved -27% vs. -2% of Nifty’s.

Oscillator RSI and CMO are closing in towards the over-sold territory. The stock is currently trading in the lower range of the Bollinger bands. Short-term technical saw a 9X4 bearish cross-over a few days ago.

The MACD line has bearishly penetrated the signal line and the drop in the histogram level suggests a short-term bearish move. Also, the Long-term and short-term GMMA lines are inverted in a bearish move.

INDIAINFO’s average correlation with the Nifty is 0.65, which is positive and strong. The scrip will be closely replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]