If you’re an Investor, Our India Stock Picks will add to your Net Worth

Analysis of select India stocks (Medium term perspective)

Disclosure

Please click on the above link to view the

disclosure document before reading this
article. The contents may not be reproduced
in any form without obtaining prior
permission from the publisher.
Sundaramurthy
Vadivelu Please send your feedback

In this article let us analyze 5 India stocks that are technically bullish
for the medium term. The discussion is based on weekly charts.

Ispat Industries Limited (Group A, Scrip Code: 500305):

The company was promoted by the well known Mittal family. Lakshmi
Mittal, the eldest of the Mittal brothers is the fifth richest person in the
world, according to Forbes magazine. He branched out in 1994, taking
over the international operations of the group. Pramod Mittal and Vinod
Mittal look after the steel business in India. The company produces
sponge iron, hot and cold rolled coils, galvanized and colour coated
sheets. Sponge iron production capacity is 1.6 million tonnes per year
while hot rolled coil steel plant capacity is 2.4 million tonnes per year.
http://groups.google.com/group/theindiastreet/web/ISPATIND_100907.j
pg

Ispat Industries reported a net loss of Rs.9.5 crores for the financial
year 2006 – 07. In December 2005 the company had revised the
capital structure of the company. 40% of the equity share capital of the
Company was converted into 0.01% Cumulative Redeemable
Preference Shares (0.01% CRPS). After it was relisted, it made a high
of 25 in April 2006. Within about two months, it fell to a low of 10.10.
The stock gained reasonably in the next 6 months and touched a high
of 17.90 in January 2007. After almost 8 months of corrective
decline/consolidation, it broke its resistance with record volumes last
week. The stock is expected to test its previous high at 25 soon.
Medium term target works out to 29.

Jindal Photo Limited (Group: B1, Scrip Code: 532624):

Jindal Photo Limited is India’s largest manufacturer of photographic

films and related products. The company produces colour roll films,
analog & digital cameras, photographic colour paper, medical X-ray
films & equipments, photo processing equipments, photographic
chemicals etc. It has over 36% market share in the colour paper and
colour roll Films. The other products such as X-ray Films, cine colour
positive film, etc. have market share of about 25%. Jindal Photo
markets the products under the brand name “FUJIFILM”. The company
had reported a net profit of Rs.27.5 crores for the financial year 2006 –
07.
http://groups.google.com/group/theindiastreet/web/JINDALPHOT_10090
7.jpg

This stock too, had undergone restructuring of capital like Ispat

Industries. It made a highs of 418.95 on May 27, 2005 and 416.50 on
August 26, 2005. It was on a steady decline for next one year – no real
buying support from market.
It has consolidated since then for about 11 months and broken out in
August 2007 with reasonably good volumes. The next resistances for
the stock are at 158.85 and 186.70.

Ranbaxy Laboratories Limited (Group A, Scrip Code: 500359):

Ranbaxy is a well known pharmaceutical company headquartered in

India. It has presence in 49 countries and there are manufacturing
facilities in 11 countries. Ranbaxy manufactures and markets generic
pharmaceuticals, value added generic pharmaceuticals, branded
generics, active pharmaceuticals and intermediates. The company’s
net profit for the financial year 2006 – 07 was reported to be Rs.386
crores.
http://groups.google.com/group/theindiastreet/web/RANBAXY_100907.j
pg

Ranbaxy is a constituent of both Sensex and Nifty. The stock had a

torrid time in October 2005 when it fell by almost 33% in three weeks.
This was just after Ranbaxy lost a UK lawsuit to Pfizer. For a stock
analyst, this was not a surprise – a “Three outside down” candlestick
pattern occurred in the monthly chart of the stock in February 2005,
clearly indicating a long term reversal.

The stock continued to make lower highs and lower lows since May
2006. The first wave in medium term charts apparently ended in May
2007. After a four month correction/consolidation pattern, the stock
had broken out this week with reasonably good volumes. Please note
the “three inside up” candlestick pattern prior to this week, formed at
support levels. The stock’s next resistances are 452 and 530.

Today’s Writing Products Limited (Group B1, Scrip Code:

531830):

Today’s Writing is one of the leading manufacturers of pens and other

writing products. It has about 35 varieties of pens alone and recently
they have extended their business to school and office stationery
items. The company has been consistenly making profits ever since it
went public 11 years ago. It declared a net profit of Rs.11.6 crores for
the financial year 2006 – 07.
http://groups.google.com/group/theindiastreet/web/TODAYS_100907.jp
g

This stock has made a few “V” like patterns, two of which are shown
above. ‘V’ formation is generally considered to be a quick reaction by
the crowd to offset the steep fall in prices; Technical traders prefer a
cup and handle type of pattern instead of this pattern. The stock has
broken its resistance at 71.50. This has happened after 4 months of
decline. Note the huge “upward gap” or “rising window” in the last
week’s price. This gap, should act as a support in case the stock
corrects from the current levels. The stock is expected to test its
resistances at 88.40 and 97.

Venky’s India Limited (Group: B1, Scrip Code: 523261):

Venky's (India) Limited was formerly known as Western Hatcheries

Limited and belongs to Venkateshwara Hatcheries group. Its produces
animal health products, pellet feeds, processed chicken products and
specific pathogen free (SPF) eggs. There are about 30 units spread
across the country. Recently the company has diversified into
nutritional health products for human beings, pet food and health care
products. The company’s net profits were worth Rs.11.5 crores for the
financial year 2006 – 07.
http://groups.google.com/group/theindiastreet/web/VENKEYS_100907.j
pg

The stock had fallen from a high of 227.10 in August 2005 to a low of
91 in June 2006. It has been bullish since then, though it nearly tested
its support levels. In June 2007 it did break its resistance but without
much volumes. It got corrected slightly and now, it has almost come
back to its previous close at 174.10. This confirms bullishness. The
stock is expected to test its resistances at 212 and 227.10.

Sundaramurthy Vadivelu

LABELS: MEDIUM TERM PICKS, INDIA STOCK MARKET, ISPAT

INDUSTRIES, JINDAL PHOTO, RANBAXY, TODAYS WRITING, VENKYS
INDIA

Suggested Reading

• 5 India Stocks You Should Own for the Next 6 Months

• Buy These India Stocks and Hold for 6 Months
• VIDEO: India vs China - Which is Better?