{"id":713871,"date":"2013-03-27T14:00:15","date_gmt":"2013-03-27T08:30:15","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=713871"},"modified":"2013-03-27T14:00:15","modified_gmt":"2013-03-27T08:30:15","slug":"analysis-jswsteel-to-catch-a-falling-knife","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2013\/03\/27\/analysis-jswsteel-to-catch-a-falling-knife\/","title":{"rendered":"Analysis: JSWSTEEL – To Catch A Falling Knife?"},"content":{"rendered":"

The entire steel sector has taken it on the chin lately and JSW Steel [stockquote]JSWSTEEL[\/stockquote] is no exception. After making a 52 week high close to Rs. 900 levels, the stock has seen a one-way hammering all the way down to Rs. 600 with its all time low of Rs. 566 in sight.<\/p>\n

\"JSWSTEEL<\/a><\/p>\n

The question on everyone’s mind is when is the slide going to end? It is trading at a PE of ~6.8 while its most recent quarter EPS was\u00a05.76. Also, JSW paid a dividend of Rs. 7.50\/share last year and Rs. 12.25 before that. JSW was never a profit engine – historically, net profit and margins have not been that great.<\/p>\n

\"JSW<\/a><\/p>\n

As you can see from the chart below, RSI <\/a>at 20 is showing extremely oversold conditions. However MACD <\/a>is not confirming RSI.<\/p>\n

\"RSI<\/a><\/p>\n

Should you catch this falling knife? The answer is wait a while before you take the plunge. With a beta of 1.71, it is pretty volatile and given a choice between JSWSTEEL and TATASTEEL <\/a>[stockquote]TATASTEEL[\/stockquote], I will take Tata Steel<\/a> for its global footprint and\u00a0profitability\u00a0any day. However, keep a close eye on JSW<\/a>, a good bargain might just be around the corner as the stock races towards its 52 week lows.<\/p>\n

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