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Sunday, November 18, 2012

When will stocks in the Consumer Durables sector revive?

The slowdown in the Indian economy has taken its toll on stocks from the Consumer Durables sector. But the revival process seems to have started.

However, as in every other sector, some stocks are performing better and some stocks are performing worse than the rest. Many small investors fall into the trap of buying stocks that appear ‘cheap’, because the ‘good’ stocks seem too expensive.

But ‘cheap’ stocks often become cheaper, and good stocks become even more expensive when the sector starts to flourish.

Bajaj Electricals

BajajElec_Nov12

From a peak of 347 touched in Oct ‘10, the stock dropped 61.7% to a low of 133 in Dec ‘12. The subsequent revival has not yet retraced 50% of the fall. The stock is struggling to stay above its 200 day EMA. Can be considered for entry only on a convincing move above 240.

Blue Star

BlueStar_Nov12

Blue Star had touched a peak of 554 in Sep ‘10, before losing a huge 73% to touch a low of 151 in Dec ‘11. The bears are yet to release their tight grip, as the stock struggles to stay above its 200 day EMA. Avoid.

Gitanjali Gems

GitGems_Nov12

The stock has made a bullish ‘rounding bottom’ pattern and is back in a bull market. However, all four technical indicators are showing negative divergences by failing to touch higher tops. The likely dip can be used to add.

Rajesh Exports

RajExp_Nov12

The stock has been in a down trend for the past 6 months, and has slipped below its falling 200 day EMA. A fall below the blue uptrend line will be quite bearish. The stock has wild price swings – which may be good for trading, but not for investment. Avoid.

Titan Industries

Titan_Nov12

Despite the number of shares multiplying by 20 times due to a 1:1 bonus and a 10:1 stock split, there seems to be no slow down in the upward momentum of Titan’s stock. This was the recommendation in the previous post: “Whenever you have a little spare cash, buy a few Titan shares – instead of trying to find the next mythical multibagger.” There is no reason to change the recommendation.

Videocon

Videocon_Nov12

The bear phase in the stock started after it touched a peak of 295 in Oct ‘10. Though the stock price appears to be moving sideways, the bear phase is still intact. Avoid.

VIP Industries

VIP_Nov12

Once a darling of the stock market, and well-promoted by two of the major players (RJ and RD), VIP has hit skid row after its 5:1 stock split in Nov ‘11. Stay away.

Whirlpool

Whirlpool_Nov12

Whirlpool’s stock is in an uptrend from the beginning of the year. The price is consolidating within a rectangular band between 240 and 272, and currently seeking support from the uptrend line. Hold, with a stop-loss at 232. Add only on a convincing break above 272.

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