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Buy These India Stocks and Hold for 6 Months

Analysis of select India stocks (medium term


perspective)

July 16, 2007


Disclosure

In this article we shall review five stocks that look technically good for
medium term. The patterns and breakouts discussed are based on
weekly charts.

Cosmo Films Limited:

Cosmo Films is the largest exporter of bi axially Some Recent Stocks


Gainers We Suggested
oriented polypropylene films in India. It has a Symbol Percent
manufacturing capacity of 60,000 Tonnes of BOPP increase
PFC 11.70%
and 8,000 Tonnes of thermal lamination film. The IBREALEST 9.42%
films are classifed as transparent (coatings and INDIANB 7.95%
ORBITCORP 7.55%
tapes, bakery products packaging, cigarettes wrap HIKAL 5.85%
etc.) , white and pearlized (soft drink bottles), SREINTFIN 5.53%
pigmented (food packaging), metallizable DENABANK 5.17%
ARVINDMILL 5.16%
(biscuits/food packaging) and speciality films GVKPIL 5.01%
(visiting cards, posters, calenders, brochures etc.).
The company has reported a net profit of Rs.24.82 crores in 2006 – 07
at an EPS of 12.77.

http://groups.google.com/group/theindiastreet/web/COSMOFILMS.JPG
In my earlier article, “Chart Patterns and market’s reaction” we
discussed about inverse head and shoulder pattern. We find the same
here in weekly charts. The “left shoulder”, the “head” and the “right
shoulder” can be seen clearly in the above chart. On breakout above
the neckline, the volumes are increasing. It is a confirmation of the
pattern formation. The next resistances are at 114 and 139.
HEG Limited:

HEG is Asia's leading graphite electrodes manufacturer and exporter.


The company has four dvisions: graphite electrode manufacturing,
captive power plant, steel billets manufactring and carbon speciality.
HEG won the country's top export award (CAPEXCIL) for 17 consecutive
years. It has the largest integrated graphite electrodes plant in south
east asia / middle east and second largest in the world. The
company’s net profit for 2006 – 07 turned out to be Rs.73.84 crores at
an EPS of 18.32.

http://groups.google.com/group/theindiastreet/web/HEG.JPG

A “cup and handle” breakout pattern has been observed in the weekly
charts of HEG. It can be seen that the cup formation has taken about
6.5 months and the handle formation about 7 months. Pattern is
confirmed by resistance breakout with volumes this week. The target
for the stock can be measured by subtracting the low of the cup from
its right peak, which works out to be 306.

Rohit Ferro Tech Limited:

The Company manufactures High Carbon Ferro Chrome (HCFeCr), Ferro


Manganese (FeMn) and Silico Manganese (SiMn) through Submerged
Arc Furnace (SAF) route, with the total combined capacity of more than
175,000 Tonnes per year.
It is a part of the Impex group which manufactures various ferro alloys.
The company was accredited ISO 9001:2000 in August 2004. It also
received Two Star Export House Status. The net profit for the financial
year 2006 – 07 stood at Rs.19.22 crores at an EPS of 6.61.

http://groups.google.com/group/theindiastreet/web/ROHITFERRO.JPG

This stock is yet another example of losing more than 50% in the bull
market. It fell from 61.70 in May 2006 to a low of 24 in March 2007. A
small uptrend had started afterwards. But the resistance trendline
could not be broken (see the negatively sloped line). Now it has
broken the horizontal resistance line as well as the resistance trendline.
The next resistances for the stock are 44.60 and 58.95.

Kirloskar Oil Engines Limited:

Kirloskar Oil Engines is a well known Pune based engineering company.


The Kirloskar group is worth nearly US $ 600 million. The Kirloskar
Group makes equipment, machinery and high precision engineering
products for the transport sector, including ship building, railways,
roads and cargo. They also have a major presence in auto
components, process industries, rubber and plastics, textiles and also
consumer goods industries. Kirloskar Oil Engines’ product range
includes diesel engines, irrigation pumpsets, diesel generating sets,
engine bearings, engine valves and grey iron castings.
The company’s net profit for the year 2006 – 07 was Rs.178.41 crores
at an EPS of 16.07.
http://groups.google.com/group/theindiastreet/web/KIRLOSOIL.JPG

One more nearly “cup and handle” breakout. Nearly, because the cup
is almost a “V” whereas it needs to be very much like a “cup”. Still, it
had taken about 7 months each to form for the cup and handle. It is a
bullish continuation pattern. The stock had broken its resistance this
week. Target for the stock works out to be 456.

Zee Entertainment Enterprises Limited:

India’s premier Hindi entertainment network Zee has more than 225
million viewers across the globe. In the last 10 years it has won
numerous awards both in India and abroad. It has a audience in 80
countries worldwide. The channels include Zee TV, Zee Cinema, Zee
Music, Zee Café (English), Zee Studio and Zee Trends. Its cable TV
business is now under a separate company known as Wire and
Wireless India Limited, a listed company at both BSE and NSE.

Zee was awarded "BSE Award for Maximization of Shareholders Wealth


- 2000" . The net profit for the company during 2006 – 07 was
reported to be Rs.167.79 crores at an EPS of 3.96.
http://groups.google.com/group/theindiastreet/web/ZEEL.JPG

Watch the “ascending triangle breakout” in the chart. It is again a


bullish continuation pattern. We have discussed about this pattern in
my first weekly review of Indian stock market. The triangle height is
111.4, which when added to the previous high of 319.40 gives a target
of 430.80.

SUNDARAMURTHY VADIVELU

Suggested Reading Stock related Articles

• Chart Patterns and market’s reaction


• These 5 India Stocks Set to Move Up in the
Short Term
• 5 India Stocks You Should Own for the Next 6
Months
• 5 Great Long Term India Stock Buys

LABELS: INDIA STOCK MARKET, MEDIUM TERM PICKS, COSMO FILMS,


HEG, KIRLOSKAR ENGINE OILS, ROHIT FERRO TECH, ZEE TELEVISION,
ZEE ENTERTAINMENT ENTERPRISES, WIRE AND WIRELESS INDIA

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