Aurobindo Pharma & HCLTECHNO...Decisive moves ahead

Aurobindo Pharma:

Aurobindo Pharma has short term decisive move ahead. After giving super breakout from its consolidation zone and 50 days DMA it has came back again to test it after making high of 110. One can enter it around current levels with the first SL around 96 & the ultimate SL of 92.


2) HCLTECHNO:

HCLTECHNO has given the highest closing after 15-11-2011. Couple of consecutive closes above 425 will open doors for 445 which is its 200 DMA and then after it may try to fill the wide gap till 463.

CAIRN & CIPLA have given a good moves yesterday by respecting to their trend-lines. Good moves can be expected ahead.


Cheers
Chirag CM

Here are the two stocks which are looking very attractive on weekly as well as daily charts.....

1}CIPLA:

Cipla has given a good move yesterday and it has already breached its earlier resistance of 333, now at 342. It has very good short term support around 337. This move may continue till it holds 337 to 333. The move may continue to 349 and to 353. 353 will act as a major hurdle. Here's the chart.

2} CAIRN:


Cairn is looking can be added to watchlist as it can give good move above 351. Below is the chart.

Cheers
Chirag CM

LIC housing finance A pullback buy.

LIC housing finance has given a good breakout above 240 levels and it went upto 253. Now it has came back to test breakout level of 240 with the close at 245. It can be a good buying opportunity at this level with the stop loss of 240.

A move of 30 bucks can be expected.


Cheers
Chirag CM

ICICI Bank...Will it take support?

ICICI bank has tried to break its resistance line around 795 but came back in last session. Now the support falls around 745. The price looks good to enter as it is it's 50 DMA. Below is the chart for ICICI.

One can enter the position around 750 levels with the stop of 740-35.

Reliance Ind. Technical view

Here's the chart for Reliance Ind. It is nicely poised and one can enter it around 695 levels as it seems a good buy points. It was hammered heavily in recent times but can come back sharply. It market supports then first target will be around 750.



Cheers
Chirag CM

Fundamental stock picking

Below are the few parameters which are very useful in stock picking in
fundamental way

Earnings per share (EPS);
Net Sales; Book Value per share (BVPS);
Return on Invested Capital (ROIC); and,
Debt-to-Net Profit ratio.

Seen together and over 10 years these 5 reveal the truth. Let's see how!

The truth-revealing 5 Financial parameters

What is the first thing that you will look for in a company before
investing? You will check whether it is making Profits, consistently!
Since we will be shareholders, we need to look at the profit it earns
per share . Hence the first parameter to look for is EPS – Earnings
per Share.

How can a company continue to earn profitsyear after year? By selling
more and more every year. Hence, the second parameter tolook for is
Net Sales.
To increase its sales in the long run, a company will need to expand
its capacity.

Book Value per Share, BVPS tells us how much a company is investing in
expanding its capacity. That's the third parameter.
Companies in the most basic sense are money-using and money-making
machines. How do we rate a machine? Simple, we look at what it
produces in relation to what it uses i.e. efficiency.

Companies produce profits using the capital invested (both equity and
debt). Hence to know the efficiency with which a company uses its
capital, we need to look at Return on Invested Capital (ROIC). That's
the fourth parameter

Finally, if a company borrows money, it should be able to repay it
without serious difficulty over a reasonable period of time.
Debt-to-Net Profit ratio tells us the number of years in which the
company will be able to repay the debt. Hence the fifth parameterto
look for is its Debt-to-Net Profit Ratio.

How can you be absolutely sure if a company's financialtrack record is
great or not?

A company that has been growing its EPS, Net Sales and BVPS by 12%+
year-on-year ; has a ROIC of over 12% every year ; and can pay off its
debt in less than 3 years i.e. a Debt-to-Net Profit ratio of3 or less
– has a great Financial Track Record. Companies meeting this gold
standard are wonderful companies worth short listing.
Such companies are quite likely to have a moat – a sustainable
competitive advantage, which has allowed it to post great numbers. So,
now you know how important these 5 parameters are!

ChiragCM

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Thanks
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ChiragCM.

Few Thoughts On TA

The Technical analysis is a methodology to assist you in deciding the timing of investments, which is very vital to make wise investment decisions. The technical analysis is based on the assumption that history tends to repeat itself in the stock exchange. If a certain pattern of activity has in the past produced certain results nine out of ten, one can assume a strong likelihood of the same outcome whenever this pattern appears in the future. However technical analysis lacks a strictly logical explanation. Technical Analysis is the study of the internal stock exchange information and not of those external factors which are reflected in the stock market. All the relevant factors, whatever they may be can be reduced to the volume of the stock exchange transactions and the level of share price or more generally, the sum of the statistical information produced by the market. Few of the most commonly used technical analysis methods for share market Trading are Japanese Candlestick (most powerful stock charting method), Price Curves, Trend Lines, High Low Charts and Moving averages.

Identifying trends and trading ranges is one of the hardest tasks in technical analysis. It is easy to find them in the middle of a chart, but the closer you get to the right edge, the harder it gets.

Thanks.

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Chirag CM