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Thursday, January 10, 2008

How to cope with the current market mayhem

Hi friends,

I am inundated with your queries! But before I start answering them individually, I thought I would write a general note on what you people might be going through with the current sudden downward move of the overall market. First advice to you is : DO NOT PANIC!

The times we live in demand from us that we should be able to think on our feet and take quick decisions. But the decisions we take must be well considered and should not be impulsive. DO NOT ACT IN PANIC. There has been a great run in the small and midcap universe in the last one month or so without a break. So it is but natural that profit booking has to come in at some point. And in raging bull market like ours, corrections will always be swift and sudden.

Look at the bright side of these corrections. These corrections show you which are the stocks which are showing strength even when the market sentiment turns weak. They separate the wheat from the chaff. I would say that this is a good time for you to get out of weak stocks which were running purely on momentum and get into strong stocks which are backed by solid fundamentals. For example, if you were holding junk stocks with no EPS figures to talk about, then sell them and enter LOW PE stocks like Cybermate Infotek, Jayaswal Neco etc. in the small cap section, Aurobindo Pharma in the large caps, Unichem Labs in the midcaps. These are only a few examples of stocks you can buy in the current overall market weakness, there can be many more such stocks out there which will turn out to be big winners in the medium to long term.

I hope you get my drift.

37 comments:

Milin said...

Hi.. Any comments on gufic biosciences @ 19... i have gufic @ 18. hitting lower circuits for past 7-8 days..

sharefree said...

Hi Superstar,
It is nice to see your post on current mayhem... Your messgae has really given some courage to me.

Meanwhile I see a post on AUROBINDO " foreign currency convertible bonds are due to convert in to shares at market price as per sebi rules so they are pushing price down nearly 2 cr shares are due toconvert little converted @ 522 "; what is your view on this. This deed of conversion would pullt he price down to what kind of levels.

Your comments and advice pls, I have taken heaby position in Aurobindo.

Thanks & Cheers.

siva said...

goodmorning superstar,
right word in the right time thanks
is this correction going to be so deep like rerating or as usual, or this is due to the reliance ipo as we see even the bluechips correcting
regards
siva

kunal said...

hi superstar !!

I have been a big fan of u since i came to know about u . Since then i m constantly following ur advises. As i could not pick Cybermate Infotek before because of it getting locked into uc daily so i have entered into this counter now only . but after that it hit lc. but i am hoping that it will make a pull back ..i am even advising my frnd s to get into this counter. but can please tell me what kind of target should i keep for this stock ??? just a rough idea !
i hope u will keep on giving ur wonderful advises. Blessings and goodwill of thousands of ppl r with u

kunal

Peeyush said...

Hi Sperstar,
I recently came to know about your tips and really liked your past tips. And at per your suggestions, I have taken position in Cybermate infotech @18 rs. What do you think, as yest it was in lower circuit, what the target we can expect in upper side?

Surbhi said...

Hi Superstar

I took a major stake in Cybermate infotek at 17.8 on solely your recommendation. Whats your take on this looking at the curent scenario?

Peeyush said...

Hi Superstar,
Sorry, I forgot to mention about GUFIC BIO-SCIENCES in my earlier post. What do you suggest about this script....This has vertically come down from 28 to 18.75. Whats your view now on this. Is there any chance for a up ward move from here or you think more downside is expected ?

MANOJ said...

Dear Superstar,

Whats your take on Eveready Industries on 3 month's perspective and Mundra Ports for longer term

MANOJ

Ayaz said...

Hi superstar,

Your tips are really great , got good money in Gufic.
Trying to get cybermate but got at a price of 17.90 Qty 40000, now it has started L.C ,
Should i hold ....time and target

Superstar said...

Hi Milin,
I had advised to book profits in Gufic around 27 in the concerned blog and also on moneycontrol. If you still haven't sold it then you can wait for a technical bounce which may come soon.

Hi Sharefree,
Aurobindo is down along with the rest of the market due to technical reasons including the one mentioned by you. But it is a buy on every dip. Will give good returns in the MT and LT.

Hi Siva,
I think the end of the tunnel is near.

Hi Kunal,
Thanks. Cybermate Info is sure to pullback soon. The targets are mentioned in my original post on Cybermate Infotek. Read that carefully.

Hi Surbhi, Peeyush and Ayaz,
Your queries are also answered by the above. Ayaz, it is better to switch from Gufic to Cybermate Info.

Hi Manoj,
Both your stocks can be held with a medium to long term view.

Cheers!

Naveen Bysani said...

Jayaswals Neco Ltd. and low PE !!!
Am I missing some thing

Selvi said...

HI Superstar ,

any idea in these stocks

Sujana Metal Products Ltd

Shri lakshmi cons

Sumit said...

thanx Navin for the reassurances. Feel a lot better now

SC

Superstar said...

Hi Naveen Bysani,
You sound sceptical about Jayaswal Neco's PE. The PE ratio of Jayaswal Neco is little less than 10 at cmp of 69. You think that is high? Surely, you are missing something.

Hi Selvi,
I don't track Sujana Metals actively, but I think it is a Hold.
Are you asking about Shri Lakshmi Cotsyn? If yes, then it has been on my buylist since 100. It can be bought on dips with a long term view.

Cheers!

rohit said...

Hi Superstar,
What is your call on Alpa Labs.
I have LT prospetive for this share. bought @49 levels.
SHould i accumulate more

Thanks
Rohit

funinlife said...

i am recent visitor on your blog superstar but getting quite convinced with your research and recommendations. i am stuck in two shares rico auto 1200 SHARES at 57 and sical logistics 200 at rs364.kindly comment on these two stocks and kindly tell if i can enter in alps industries at this level of 80.

funinlife said...

hi superstar kindly comment on the following scripts i am holding
rico auto 1200 shares @57
sical logistics 200 shares @rs 364
also kindly suggest if i can enter
alps industries at the current level of 80?

Raghu said...

Hi Navin,
Good day.
I have HFCL which is at breakeven point now, Referring to the recent DoT LoI rejection for HFCL,do you suggest to comeout off this stock even with some losses.
Is there any possibility for ST to MT recovery of this stock?
Your timely suggestion would be appreciated very much.
Cheers,
Raghu

prashanth said...

Hi ..... can you please suggest whether I can buy IVP and FERROALLOYS at these levels

Superstar said...

Hi Rohit,

Alpa labs is a hold at cmp with a long term view. If you want to invest more in this space, then you can pick up Unichem Lab, Aurobindo Pha & Suven on dips.

Hi funinlife,
Sical seems fairly valued to me at cmp of 285 and can have decent upside in the long term. So that you can hold. Rico auto is a rank underperforming stock and I would switch from it to something better. You can enter Alps Ind below 80 with a LT view.

Hi Raghu,
HFCL is bearing the brunt of adverse news. It has technical supports around 47 and then at 38 from where some bounce can be seen. But I would personally not be inclined to take the risk in this stock and switch at cmp to something with better value. Shakti Metdor on dips may give better returns.

Cheers!

SONU said...

Hi,
Your view about Prithvi Information bought @ 300. Buy More/HOLD/EXIT. Please suggest.

MANOJ said...

Dear Superstar,

Can I buy XL TELECOM & ENERGY LIMITED at current level and how does it look for a medium term.

If a company issues preferential shares, do we expect spurt in that share (here I am referring to Thomas Cook I have some shares @ 122/-)

Regards,
MANOJ

Kriti said...

Hi Superstar & all friends

Good morning. sorry 4 written question not @ current market.
I have 200 shares of Reliance Petrochemical Ltd. & 100 shares of Reliance Polyetheline Ltd. in physical form. So anyone can answer of this shares conversion to another Reliance Share up till todays date history.
Thanks in advance

Raghu said...

Hi Navin,
Good day!
Could you please suggest some bluechip stocks ( such as DLF,RIL) for a very long term.
Also, appreciate if you could mention the appropriate level for entering those stocks.
Would you suggest to enter TTML at this level?
Thanks a lot for all your suggestions!

Cheers,
Raghu

Superstar said...

Hi Sonu,
Prithvi Info has been on my radar for long. It is definitely a hold with buy more on dips.

Hi Manoj,
It depends on WHO the pref shares are being issued to. I would exit from both XL and Thomas at cmp.

Hi Kriti,
Your question is not clear. Please rephrase your query clearly.

Hi Raghu,
I would rate Aurobindo Pharma as a bluechip and buy it on every dip. I would also like TCS on dips. Would like Kesoram on dips. I had also recommended HPCL around 250 few months back after which it went to a high of 405 just one week ago.
I would maintain a SL of 54 on TTML if I was holding it and buy it at 45-47.

Cheers!

Sarika said...

Hello Superstar,
I am holding good qty of Jayaswals Neco. Request you to suggest few good stocks.
Is it advisable to buy now or should i wait till after the budget?

Thanks,
Sarika

srikanth said...

Hi superstar,

It is nice to see your post on current mayhem... Your messgae has really given some courage to me.

Your comments on ZIGMASOFT, please.


PSR

Superstar said...

H Sarika,
I'm sure you are enjoying the rise in Jayaswal Neco. I have posted a list of potential winners in my new blog today. Have a look at them.

Hi Srikanth,
Zigma Soft doesn't deserve to be at current price on the basis of its financials. I would stay away.

Cheers!

srikanth said...

Hi Superstar,

i Hold BN Rathi Sec. and KOA Tools
may i know ur view [fundamental analysis] on these stocks.

thanQ for ur responce.

PSR

vipin said...

Hi Superstar,

today bought 350 more shares @16.22, total quantity becomes 3300. if it falls more will buy more.

Naveen ji i request you for your comments on GV FILMS & GTL INFRA heard of target 32 gor gv film & 500 for gtl infra.
thanks for your views & advice

vipin said...

sir,

i am holding 2000 BAMPSL Sec @ 2.77
(p/e 2.64, div 2% fv 1 & b/v 2.34)

and holding DCW 650 @ Rs. 41. what should i do, should i buy more.
hold for long term. heard target of 100 for dcw any comment

vipin said...

Hi Superstar,

ferrous alloy & faccor alloy are the company of same group is there any difference between their working model. can you tell which one is better for long term investement. it will be very kind if you (or any boarder) define working of these two company .

thanks

Superstar said...

Hi Srikanth,
BN Rathi's fundamentals are much better than Koa Tools. But BN Rathi seems fairly valued at cmp. Finacial services and Brokerage companies are doing well presently, so that stock one can hold with a long term view. In the short term, it seems fairly valued. Koa tools, on the other hand, seems to have come in the hands of some bull operator who is now operating it and may take it anywhere. Fundamentals of the company are not good. They are listed as an IT and Hardware company but it seems they are merely investing in shares of other companies and mutual funds instead of having a business of their own.

Cheers!

Superstar said...

Hi Vipin,
This is the latest news on GV Films.

"GV Films Ltd and M/s. Ayngaran International Media Pvt Ltd, Chennai (AYNGARAN} have acquired the Tamil Nadu Theatrical exploitation rights from the producer M/s. Sri Surya Movies for the film BHEEMA for total consideration of Rs 23 crores as Outright Royally consideration. The company and Ayngaran have agreed to share the profit on equal share of 50:50%."

Other than this news, the fundamentals of the company do not merit the target that you say you have heard.

DCW was an old pick of mine which has done quite well in the recent past. It also went up on the rumors of being added in FNO list. Fundamentally, the stock seems fairly and fully valued to me for the short term. In the long term, it may give good returns.

Bamp looks like a hold to me. GTL infra looks like a sell.

Cheers!

sharefree said...

Hi Superstar,
What are the levels you are expecting Aurobindo to go ( it is at 430 levels today); though Ikept on buying at every dip; the dip seems to be neever ending.

Request your inputs pls.

Regards

Superstar said...

Hi sharefree,

Fundamentally, there is nothing wrong with Aurobindo Pharma. Only the short term technicals are weak. This is in line with the fall happening in the rest of the market. Aurobindo is no exception. The sentiment and technicals of the overall market itself are weak. Looking at Aurobindo's charts, I think the worst case scenario for this stock could be 400-405 levels which could be the rock bottom. The long term targets of this stock still remain 750-800. I read somewhere that even Sharekhan is giving a target of 900-1000 on this stock.

I would average my cost price in case of further falls. You can also check out my other current BUY recommendations like JK Lakshmi Cement & Godrej Industries.

Cheers!

sharefree said...

Hi Superstar,
Thanks for the reply on Aurobindo. Do you suggest if the price goes below 400; I exit by booking losses; as we would never know wht is th e support price if it goes below 400.

Thanks