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Wednesday, March 26, 2008

Time to capitalise..........
Market did not continue to tempo of yesterday’s rally simply because Bulls though made valiant effort of NAV game bears have gone free for short selling once again. Not a single short position has been squared off. This is very unlikely till 5300.

Yet we sense a great opportunity to capitalize this crash to your personal advantage in B gr stocks where FII are not present. It is a well known fact that most of the broker and big operators are going through a bad patch. They have stuck with F & O losses which is making them sell cash stocks to meet margin requirements. Tomorrow is the last day where they need to sell shares for that reason.

From Friday, fresh positions can be taken as the vallan pay in will fall in next financial year. This will provide leverage to big brokers and operators to consolidate their holdings back to square one and for sure they will do at lower the prices at which they had sold their holdings. E.g Jeyswal Neco was accumulated from Rs 20 to Rs 82 and major volumes happened between Rs 60 to 75. It has coal mines worth Rs 1 lac crs and market cap is just Rs 300 crs. At Rs 80 it had seen market cap of Rs 900 crs plus. It has potential to touch market cap of Rs 10000 crs in just one year which means Rs 300 per share.

Now the fact that those who have bought shares (I would not name here though I know) have sold very few shares to bring the share prices to a level where the innings started. Those who had boarded in between without knowing the stock must have already made exit. Now there is nobody between the share price and the big operator. The real story will be out once the stock crosses 150 to 200 levels.

I am explaining this because I know for sure you can’t get 10 times returns in any A gr shares including Reliance or Reliance Capital but for sure India foils, Asian Oil, RDB, Bajaj Steel, Avon, Network, Jeyswal Neco and lot of other stocks can give you nothing less than 10 times returns in 2 years. Therefore I would advise buy small cap and sit tight instead of general advise of buy A gr and sit tight.

Investors have money for sure but are frightened to invest and fear always does not allow them to ride when it really matters. Those who will buy now will get for sure super doper returns in times to come. Asian Oil will report ESP of Rs 55 to 60, RDB will report ESP of Rs 72, Bajaj Steel will report ESP of Rs 85 and these stocks are available at 1 to 3 PE levels and hence there is nothing to lose.

Sector wise Cement and banking are coming back in reckoning. Lot of people told me that you do not generate sell calls. We had given sell call in REL at 2700, ACC at 1300 and India Infoline at 1900. Now in my opinion cement is bottomed out. BUY ACC with stop loss of Rs 700 and see for one year you will get a price of Rs 1500 plus. Panyam and JK are the safest bet in cash stocks.

Let the fear of a danger be a spur to prevent it; he that fears not, gives advantage to the danger.

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