Realty Sector stocks – worth a look? Nah!

The realty sector has been in the doldrums for quite some time now. Builders are hanging on to their unsold inventory in a bid to keep prices from crashing. Buyers are in no great hurry to relieve the builders of their pain.

Many builders are now being forced to liquidate some of their land banks and unsold projects to try and keep their heads above water. The charts of most realty sector stocks are in long-term bear markets.

As in any sector, a couple of companies are able to swim against the tide. Does that make their stock worth buying? Their fundamentals don’t justify it. If you are really keen about the sector, you may be better off buying land.

Hubtown (Ackruti City)

The stock closed at a 52 week high of 194.50 and forayed into bull territory for about 4 months. But the good times didn’t last. The stock is back in a long-term bear market.

Ashiana Housing

Since a 5:1 stock split back in Oct ‘13, the stock has been climbing relentlessly, gaining 4 times from its post-split low. Though it is one of the few charts in a bull market, valuations are astronomically high.

DLF Ltd

The stock closed at a 52 week high of 241.30 back in Jun ‘14, but lost more than 50% due to strictures from the Competition Commission. The Vadra Haryana land deal is turning out to be another thorn in its flesh. Despite a rally from its low, the stock is back in a long-term bear market.

DS Kulkarni

The stock price closed at a 52 week high of 103.25 in Nov ‘14, more than doubling within a year. After a brief correction from its top, the stock is trying to resume its up move, and is clearly in a bull market. However, valuation is stretched and fundamentals are weak.

Ganesh Housing

The stock price closed at a 52 week high of 211.40 back in Jul ‘14, gaining more than 3 times from its 52 week low. Its subsequent correction is still ongoing. The stock price has dropped below its three EMAs and may soon be back in a bear market.

HCC

The stock gained almost 4 times from its 52 week low by closing at 48.45 in Jul ‘14. It has been correcting since then, and is struggling to stay in a bull market. A fall below 27 will mean a continuation of the bearish pattern of lower tops and lower bottoms.

Omaxe

The stock briefly entered bull territory and touched a 52 week high of 151.05 in Jun ‘14, but soon dropped below all three EMAs into a long-term bear market.

Purvankara

The stock price more than doubled from its 52 week low by touching a high of 123.95 in Jul ‘14. It has been in a corrective mode since then, and has dropped into a bear market.

Unitech

The stock touched a 52 week high of 37.80 in Jun ‘14, gaining more than 3 times from its 52 week low. It has been all downhill since then, as the stock slides deeper into a bear market.

Vijay Shanti Builders

The stock chart pattern isn’t much different from most of the others from the sector. A gain of about 70% from its 52 week low, and a brief entry into bull territory was followed by a steady slide back into a long-term bear market.

Related Post

Chart Patterns of 10 Realty Sector stocks (an update)

Technical updates – DLF and Unitech

Real estate stocks were all the rage during the later stages of the previous bull market in 2007. The term ‘land bank’ entered the stock market jargon dictionary. Companies were falling over each other in trying to acquire land parcels at any price. Banks and NBFCs joined the race of lending money against ‘land banks’.

Stocks of companies in completely unrelated businesses – particularly older companies in the doldrums – were getting highly valued on the basis of their ‘land banks’. Small investors relished the idea of making quick money and jumped on to the real estate band wagon.

A real estate bubble had been created, and it burst with a loud ‘pop’. Paper wealth of small investors vanished into thin air. Two of the most popular and high fliers among the real estate stocks were DLF and Unitech – despite the reported poor quality of their construction and unfavourable agreement clauses with buyers.

Both stocks have been in long down trends for the past 6 years. The moral of the story? Buy real estate; shun real estate stocks.

DLF

DLF stock had gone past the 1200 mark in Jan ‘08 before the bottom fell out. In just over a year, it fell almost 90% from its peak. The subsequent rally saw the stock cross the 450 mark in Oct ‘09 – giving 3-bagger returns from its Feb ‘09 low, but failing to retrace even 50% of its huge fall. That kept the stock technically in a bear market.

That was a signal for bears to take charge. The stock price has formed a bearish pattern of lower tops and lower bottoms that dropped the price to 122 in Aug ‘13 – which was lower than its Feb ‘09 low. The rally to a high of 241 gave almost 100% gains from its Aug ‘13 low. The stock is undergoing a price consolidation, and may try to breach the resistance level of 241. Only a convincing move above the Mar ‘13 top of 285 will negate the ‘lower tops-lower bottoms pattern’.

Technical indicators have corrected overbought conditions and are in bullish zones. Another test, and possible breach of 241 is likely. The company is saddled with massive debt and valuations are sky high. Best to avoid.

Unitech

Unitech stock had touched headier heights in the 5-figure range in early 2006. A huge bonus and stock split brought the price down to more reasonable levels. The stock price continued to rally and tripled to cross the 600 mark in May ‘07. A 1:1 bonus could not stem the rush to buy and took the stock price up to the 550 level in Jan ‘08.

The crash was extraordinary, as the stock price dropped more than 95% to touch a low of 22 in Nov ‘08. The subsequent rally took the stock price to 118 in Sep ‘09 – more than 400% gain from its Nov ‘08 low – but retracing less than 20% of its massive bear market fall. It has been all down hill since then.

The stock touched a low of 11 on Mar 3 ‘14 – 50% lower than its Nov ‘08 low. The recent rally saw a sharp rise to 38 last month – 3-bagger returns in 3 months! Daily technical indicators had become extremely overbought. The stock price corrected below the support/resistance level of 30, and is struggling to move up again.

Interest expenses were more than twice the reported net profit last year and P/E ratio is 88. Don’t be swayed by budget sops. Avoid with a capital ‘A’.

Stock Chart Pattern - DLF Ltd. (An Update)

The previous detailed update to the technical analysis of the stock chart pattern of DLF Ltd. was posted more than two years back (date marked by the grey vertical line on the chart below). A further update since then had not been considered necessary because there wasn’t anything new to add to the following recommendations:

“The stock chart pattern of DLF Ltd. does not hold out much hope for the bulls. If you are still stuck at higher prices, continuing to hold may increase your losses. Investors should not go anywhere near this stock.” 

So, why take a re-look at the DLF Ltd. chart now? The motivation came from the considerable interest generated by a recent report published by a Canada-based equity research house that tore the company’s business practices and financial condition to shreds. That report was based on fundamental analysis. But technical signals had warned of the decimation in the stock’s price back in Oct-Nov ‘09.

The weekly bar chart pattern of DLF Ltd shows the steady fall from the 3 yr high of 491, touched in Oct ‘09. The stock fell almost 65% to its Jan ‘12 low of 173. But that pales in comparison to the 90% fall from its all-time high of 1225 touched on Jan 15 '08 to the bottom of 124 on Feb 4 '09.

The subsequent rally led to a 300% gain (from 124 to 491) but retraced only a third of its bear market fall – less than the Fibonacci retracement level of 38.2%. That means the entire gain from 124 to 491 was a bear market rally within the long-term bear market that started from Jan ‘08. Hence the call to investors not to go anywhere near the stock. Very few stocks manage to recover from a 90% fall.

Note that the stock price formed a ‘reversal week’ pattern (higher high, lower close) when it touched 491 in Oct ‘09. A ‘distribution week’ pattern (high near open, close near low on higher volumes) followed the next week. The stock price then entered a bearish ‘rising wedge’ pattern.

After the expected break below the ‘rising wedge’, the stock dropped to 251 in May ‘10 but formed a ‘reversal week’ pattern (lower low, higher close) that marked the end of the first phase of the down move. A counter-trend rally took the stock price above the 20 week and 50 week EMAs to a high of 397 in Oct ‘10. Again, a ‘reversal week’ pattern (higher high, lower close) marked the end of the intermediate rally.

The next leg of the down move dropped the stock to a low of 173 in Aug ‘11. A bounce saw the stock price reach a high of 251 in Nov ‘11 before falling back to test the low of 173 in Jan ‘12. A rally along with the broader market took the stock to a high of 261 in Feb ‘12, when another ‘reversal week’ pattern ended the brief rally. Note the negative divergences in three of the four technical indicators (marked by blue arrows) that warned of a correction, which started even before the adverse report hit the market.

The weekly technical indicators are turning bearish. If the stock breaches its recent low of 173, it can drop all the way to test its Feb ‘09 low of 124. If you are holding the stock, ask yourself: Why?

Bottomline? The stock chart pattern of DLF Ltd. is in a long-term bear market that started more than 4 years ago, and shows no sign of ending. After years of financial shenanigans and taking customers and investors for a ride, the chicken are coming home to roost. The company is desperately trying to sell-off assets to survive, but are finding few takers. The stock doesn’t deserve to be an index constituent. AVOID.

Chart Patterns of 10 Realty Sector stocks (an update)

If you have the money, buy realty, not realty sector company stocks. Why? Because most realty sector companies lack transparency, need lots of capital, have poor governance and a tendency to take buyers for a ride. Not to forget the nexus of local politicians and the underworld that usually leads to substandard quality of construction.

In the previous bull market, the sector was a favourite of big and small investors, and provided astounding returns to some. Those glory days are long gone, and unlikely to return. If you are stuck at higher levels, use the current rally to exit or switch.

In a previous post more than a year back, brief technicals of 10 realty sector stocks were presented. Not for suggesting investment, but to point out that even in a not-so-great sector, there are a few stocks that can swim against the tide. If you are enamoured by the real estate sector, pick those few exceptions.

Hubtown (Ackruti City)

A change of name and branding hasn’t changed the fortunes of Ackruti City – now known as Hubtown. The stock has provided no returns for the past year, and is technically still in a bear market. It is showing some signs of life, but the technical indicators are pointing to a correction from overbought condition.

Ashiana Housing

In complete contrast to the Ackruti City/Hubtown stock chart, the chart pattern of Ashian Housing is in an uptrend in a bull market, and touched a 52 week high last week. Note that the Dec ‘11 low, from which the current rally started, was actually a higher bottom than those touched in May ‘11 and Oct ‘11. Technical indicators are looking overbought, but looks like there is some steam left in the rally.

DLF Ltd

The big daddy of the real estate sector, DLF has provided almost zero returns over the past year and is trying to emerge from its 15 months long bear market. The stock dropped more than 50% from its Oct ‘10 peak, underperforming the Sensex, and is looking overbought.

DS Kulkarni

The stock traded within a rectangular band between 46 and 66 during the past year, before breaking out above the 66 level on a volume spurt last week. The stock price immediately pulled back to the 66 level, but the 50 day EMA crossed above the 200 day EMA indicating a possible return to a bull market.

Ganesh Housing

This was one of the better performing stocks in 2010, but suffered badly as the bears took their toll in 2011. The stock has given no returns during the past year and is technically still in a bear market, and the bearish pattern of lower tops and lower bottoms continues. The stock had shaved off 70% from its Oct ‘10 peak.

HCC

The Lavasa controversy nearly dropped the stock into single digits, as it fell 80% from its Jan ‘10 peak. The current sharp rally, backed by strong volumes, has caused a 100% jump from its Dec ‘11 low but the stock is technically still in a bear market. Technical indicators are signalling an overbought condition.

Omaxe

This is another stock that has been in a bull market, after forming three intra-day bottoms at 120. It has climbed above its previous intra-day high touched in Nov ‘10, and is trading above all three of its rising EMAs.

Purvankara

The stock is desperately trying to get out of a strong bear grip after providing negative returns over the past year. Technically, it is still in a bear market.

Unitech

This is one stock that tried to fly too high, like Icarus, and came crashing down to lose 80% from its Oct ‘10 peak. It provided negative returns over the past year and is still in a bear market technically.

Vijay Shanti Builders

A favourite stock of small investors, it lost more than 75% from its Jan ‘10 peak. The current rally has seen a spectacular parabolic rise, but the stock is looking extremely overbought.

Bottomline? The broader market rally from Dec ‘11 lows has propelled beaten down realty sector stocks above their 200 day EMAs, but that doesn’t mean their fundamentals have improved. Caveat emptor.

Which stocks are keeping the Sensex down?

The BSE Sensex index comprises 30 stocks. 16 of them are currently trading above their 200 day EMAs – indicating bull markets. 14 are trading below their 200 day EMAs, preventing the Sensex from reaching new highs.

Here are brief thumb sketches of the laggards:

BHEL: Bounced up sharply from a low of 1905, but found resistance from the 200 day EMA; currently trading just below the long-term moving average.

CIPLA: Touched a low of 286 before a sharp rally to 332 – above its 200 day EMA; now consolidating between the 50 and 200 day EMAs.

DLF: The rally from the low of 209 stopped well short of the falling 200 day EMA; the stock has dropped down to seek support from its 50 day EMA.

Hero Honda: The stock touched a low of 1378; a spirited rally was stalled at its falling 200 day EMA; the stock has started to drop towards its 50 day EMA.

HUL: The stock dropped below its 200 day EMA on Jan 27 ‘11; it has been trading sideways since then, alternately going above and below the long-term moving average.

Jaiprakash Assoc.: From a low of 70, the stock reached a high just short of the 100 mark but well below its falling 200 day EMA; it has dropped down to seek support from its 50 day EMA.

L&T: The stock is trading sideways in a narrow range, just above its 50 day EMA but well below its falling 200 day EMA.

Maruti: Trading below the 200 day EMA for the past three months, the stock had a day’s close above the long-term moving average, only to drop below its 50 day EMA.

NTPC: The stock has been trading below the 200 day EMA since end-Oct ‘10; a couple of brief forays above the long-term average saw strong selling pressure; currently trading below its 50 day EMA.

ONGC: The bonus and stock split didn’t help the stock much; a day’s close above the 200 day EMA was followed by a steep drop below its 50 day EMA.

Rel. Comm.: A rally on strong volumes could only sustain above its 50 day EMA briefly, and has fizzled out already; the stock is well below its 200 day EMA.

Reliance: The stock has been trading in a broad sideways range, oscillating around its 200 day EMA – giving no returns to its investors; currently trading just below the long-term moving average.

Rel. Infra.: Another ADAG stock with equally disastrous results – a brief rally on good volumes above the 50 day EMA that is showing signs of weakness; the stock is trading way below its 200 day EMA.

Sterlite: A sharp rally accompanied by a volume spike took the stock from a low of 45 to a high of 68; but it stopped short of its falling 200 day EMA and started correcting.

Unless some of these 14 stocks start to rally soon, the Sensex may remain range-bound. Technically, the most likely candidates to help propel the Sensex upwards are BHEL, CIPLA, HUL, L&T, Maruti and Reliance. Dropping Rel. Comm. and Rel. Infra. from the index would not hurt either.

12 Sensex stocks displaying the ‘death cross’

The main reason why the Sensex isn’t showing a ‘death cross’ yet, is that only 12 of the 30 Sensex stocks are showing the ‘death cross’. The balance 18 are technically still in a bull market. For the uninitiated, the ‘death cross’ is the 50 day EMA crossing below the 200 day EMA on a price chart, signalling the beginning of a bear market. (The 50 day EMA crossing above the 200 day EMA, signalling the beginning of a bull market, is called a ‘golden cross’.)

Chart patterns of the 12 Sensex stocks displaying the ‘death cross’ (marked by blue ovals) are discussed below:

BHEL

BHEL is a PSU blue-chip that started correcting after hitting a peak in Oct ‘10. The correction in the Sensex from Nov ‘10 exacerbated the fall. The ‘death cross’ occurred in end-Nov ‘10, two days after the stock dropped sharply to an intra-day low of 2060. A strong pullback took the stock up to 2379, where it faced strong resistance from the combined 100 day and 200 day EMAs.

Though technically in a bear market, the stock is trying to build a base. A move above 2379 will create a bullish pattern of higher tops and higher bottoms. The RSI and slow stochastic are showing positive divergences, having reached higher tops as the stock made a lower top. Use the dip to accumulate.

DLF

DLF, the real-estate high flier, doesn’t really score very high on management ethics, accounting transparency or investor friendliness. The stock is in a long-term bear market. A brief rally took the stock to a 52 week high of 397 in early-Oct ‘10. That was an opportunity to sell. The ‘death cross’ in Dec ‘10 has restored the bear market. With the recent tightening of loans to real-estate players by banks and housing finance companies, you can forget about investing in this stock even as a contrarian play. It may be headed down to two-digits.

Hero Honda

Hero Honda was one of the stars of the bull market till its peak of 2094 in Apr ‘10. A technically overbought condition started a corrective spell. The confirmed news of Honda, Japan pulling out of the joint venture was given a thumbs down by the market. The uncertainty about the future has led to heavy selling. The ‘death cross’ in end-Jan ‘11 is signalling a bear market for this blue-chip. Avoid.

Jaiprakash Associates

Jaiprakash Associates has been in a down trend since touching a high of 180 in Oct ‘09. The ‘death cross’ occurred in May ‘10, confirming the bear market. The rally from Sep-Nov ‘10 was an exit opportunity. Launching huge projects and borrowing money by the truck-load seems to be the core competency of this company. The stock is headed towards low double-digits. Avoid.

Larsen & Toubro

It is a bit disappointing to see a blue-chip like Larsen & Toubro in this group of bearish Sensex stocks. It started correcting with the Sensex after touching a peak of 2212 on Nov 4 ‘10. The sharp fall in Jan ‘11 was partly due to the less-than-expected Q3 performance. The re-structuring into 9 separate companies has also caused some uncertainty in the minds of investors. The ‘death cross’ will occur tomorrow, but I would use this dip to accumulate the shares of this fundamentally strong and investor-friendly company.

Maruti Suzuki

Maruti Suzuki’s chart pattern has two ‘death crosses’ – one in May ‘10 and the other in Jan ‘11. What does it indicate? Technical analysis is not a science, and no rule is sacrosanct. The ‘death cross’ usually indicates the start of a bear market. But not in this case. The stock has been consolidating sideways since reaching a top of 1740 in Sep ‘09 – causing the ‘death cross’ to occur twice without entering a bear market. Yesterday’s low of 1170 formed a possible double-bottom. The RSI and slow stochastic are indicating a likely upward bounce. Accumulate.

NTPC

The NTPC stock chart pattern is also showing two ‘death crosses’ – the first in May ‘10 and the second in Nov ‘10. The stock has been drifting downwards since touching a peak of 242 on Dec 31 ‘09, and is in a bear market. The hype about the phenomenal growth and profit opportunities in the power sector has proved to be just that – hype. Avoid.

ONGC

The ONGC chart also has two ‘death crosses’ – one in Apr ‘10 and the other in Jan ‘11. The first one didn’t cause too much damage to the bulls. The current one is unlikely to do much damage also – because the FPO has been scheduled for Mar ‘11, and the DIIs are likely to buy at dips till the FPO goes through. This is a great company but the government’s meddling has messed up its operations. This is a major reason why I avoid all PSU stocks. Accumulate.

Reliance Comm

Where is the ‘death cross’ in the Reliance Communications chart? It happened more than two years back, and is not showing up in the one year chart pattern! The stock is in a long-term bear market and should ideally be removed from the Sensex 30 index. Only big-brother can bail this company out. Don’t go anywhere near this.

Reliance Infra

Reliance Infra chart also has two ‘death crosses’. The first one was caused by the sideways movement in Feb ‘10. The next one in Sep ‘10 signalled the bear market. Anil Ambani has proven to be a big bag of wind with a slow leak. If you are invested in this company, bail out now before it becomes too late.

Reliance Ind.

Reliance chart has two ‘death crosses’ as well – one in Aug ‘10 and the other in Jan ‘11. The first one was due to the sideways consolidation that has generated negative returns in the past one year. But the second one looks more ominous. The fall in Jan ‘11 has been steep and on increasing volumes. If Reliance doesn’t recover soon, it will drag down the Sensex with it. The technical indicators are hinting at a further fall. Wait for the correction to play out before entering. 

Tata Power

The ‘death cross’ in the Tata Power chart hasn’t yet happened – even though it has been marked in Sep ‘10. The 50 day EMA spent only a few trading sessions below the 200 day EMA due to the sideways consolidation, followed by a 52 week high. The current corrective spell may push the stock into a bear market. Wait for the correction to play out before entering.

Chart Patterns of 10 Realty Sector stocks

Readers of this blog may be aware that the realty sector is not my favourite for a number of reasons. The single most important one is the lack of transparency in their financial statements. At the risk of generalising, annual reports of most realty sector stocks tend to hide more than they reveal.

Once again, realty sector companies are under scrutiny for all the wrong reasons. Their insatiable appetite for capital were being satisfied by obtaining loans using agents with questionable methods. Some of the money may have been diverted to the stock market. Environmental and government clearances were fudged to speed up projects or indulge in illegal constructions.

However, it would not be fair to paint all the companies in the realty sector with the same black brush. Here are the chart patterns of 10 realty sector stocks, some of which have done quite well despite the adverse publicity. Some are muddling along trying to keep their noses above water. The less said about the rest, the better.

I don’t really trust the fundamentals of these companies to recommend buying or selling. It is an effort to demonstrate that even in one of the worst sectors for investing, there are always a few stocks that stand out from the crowd.

Ackruti City

The stock has been in a year long bear market – failing to stay above its falling 200 day EMA for any length of time. It had started to fall rapidly even before the news about the circular trading hit the market.

Ashiana Housing

The contrast with the Ackruti City stock is startling. The stock has been in a strong bull market for the past 12 months, dropping briefly below the 200 day EMA during the recent correction. On the upward bounce, the stock is facing resistance from the entangled 20 day and 100 day EMAs. It may correct some more.

DLF Ltd

 

The stock of the biggest player in the sector hasn’t performed at all. The recent correction took it well below its 200 day EMA. The subsequent upward bounce halted at the falling 20 day EMA which is below the long-term moving average. Sign of a bear market.

DS Kulkarni

The stock drifted sideways for almost 8 months before rising to a new high in Aug ‘10 on good volumes. It has been in a down trend since then, and is facing resistance from the falling 20 day EMA. The 50 day EMA has slipped below the 200 day EMA and the 100 day EMA is likely to follow – confirming a bear market.

Ganesh Housing

Like the Ashiana Housing stock, Ganesh Housing has been one of the better performers in the sector. The recent correction took the stock below the 200 day EMA. The upward bounce faced resistance from the falling 50 day EMA. The stock has dropped below the entangled 20 day and 100 day EMAs. The correction may continue.

HCC

The controversy surrounding the Lavasa project could not have come at a worse time for the company. The high volume fall deep into bear country seems to have extinguished all bullish hopes.

Omaxe

After moving sideways just below the 200 day EMA till Jun ‘10, the stock had a sharp rally to touch a new high last month. The recent correction received support from the rising 100 day EMA, and the stock is poised above the 20 day and 50 day EMAs. Technically, the stock is in a bull market.

Purvankara

The chart pattern is similar to that of DS Kulkarni. It moved sideways till Aug ‘10. In Sep ‘10, the stock touched a new high and started a down trend immediately. The recent upward bounce found resistance from the falling 20 day EMA. The stock remains below the 200 day EMA, in a bear market.

Unitech

 

Another large realty sector stock with more hype than performance. The recent correction dropped the stock deep below its 200 day EMA. The upward bounce hasn’t provided much respite and the stock is back in a bear market.

Vijay Shanti Builders

This stock is a favourite of many small investors because it is ‘cheap’. But cheap can get cheaper. Vijay Shanti has been making lower tops and lower bottoms throughout the past year, and is in a bear market.

Bottomline? All 10 realty sector stocks are under bear attacks. But Ashiana, Ganesh and Omaxe have fared better than the others. If you have holdings in any of the other stocks, this may be a good time to switch. Small investors may be better off by avoiding this sector.

3 year charts of some Sensex 30 stocks trading below all-time highs

The BSE Sensex is trading near its all-time high. That doesn’t mean all the 30 stocks that comprise the Sensex index are trading near their all-time highs. Here are the charts of some of the Sensex stocks that are trading below their earlier peaks:

BHEL is a PSU star and a leader of the infrastructure pack. Despite power being a priority sector and BHEL being the major supplier of large capacity steam turbines and boilers that form the heart of thermal power stations, the stock is yet to reach its 2007 peak.

The 200 day EMA is rising and the stock is trading above it, which is a bullish sign. But volumes have trailed off as the stock is trying to move higher, which is not so encouraging. Add on dips.

The realty sector was most favoured by investors in the previous bull market, with DLF being the undisputed king. Questionable business practices and opaque financial statements had a disastrous effect on the stock’s fortunes. Though it is trading above its 200 day EMA, it has failed to regain even 50% of its bear market fall. Avoid.

NTPC is one of the better managed PSUs and the largest power generation company in India. But that hasn’t translated into superior stock performance. Despite all the hype surrounding the power sector – specially during the previous bull market – most power generation companies are not highly profitable. One of the major reasons being that growth in power generation is dependent upon frequent and huge capital expenditure.

The stock is trading below the 200 day EMA and falling. Avoid.

Jaiprakash Associates is one of the leading companies undertaking large infrastructure and real estate projects that require massive capital outlays, which have been mainly financed through debt. The huge interest burden has proved a detriment to the stock’s performance. After retracing 50% of its bear market fall, the stock has been making a bearish pattern of lower tops and bottoms. Avoid.

Tata Steel’s large debt burden caused by the Corus acquisition was compounded by the economic slowdown in Europe (where Corus sells most of its output). The stock is trading well below its Jan ‘08 peak, but has formed a bullish cup-and-handle continuation pattern. It is trading above its rising 200 day EMA and can be added on dips.