DCW IS A DIVERSIFIED manufacturer of basic chemicals, such as:
Caustic Soda, Liquid Chlorine and Chlorine based products such as Trichloroethylene and HCL : Upgraded Ilmenite or Synthetic Rutile
Yellow Iron Oxide , PVC Resin, Soda Ash, Ammonium bi-carbonate
Liquid Bromine and Bromide.
IF YOU ARE READING THIS IN KASHIWALA’S SITE, IT IS ORIGINAL, OTHERWISE IT IS PIRATED.
The company is in existence from 1925 and was earlier known as Dhrangadhra Chemical Works, with plant in Dhrangadhra, Gujarat. The company has come a long way since. The name of the company has been changed to DCW Ltd. and now the company has plants in Gujarat and Tamil Nadu.
The company has a share capital of 39 Crores made up of equity shares of FV of Rs.2.00 each. The company has reserves of over 269 Crores, thus making it a bonus candidate in another 2-3 years.
Promoter’s group is holding 40% shares. Institutions including FIIs are holding about 17% shares and balance is held with the public.
The company has during the year 2007, issued equity shares to FIIs and Promoter Group Companies, at Rs.10.00 premium, viz. Rs.2.00 + Rs.10.00 = Rs.12.00.
The company is consistently in profits and is also paying dividends. The share price of the company touched 52 week low on 16.09.2008.
In my lessons on fundamental analysis, I had stated the following factors to be considered for picking up shares.
1. The company should have regular profits and cash flows.
2. Placement of shares to promoter groups or FIIs at premium is good.
3. At some point of time, a well performing company may touch year’s low.
DCW has qualified on all these fronts. Considering the factors, one can consider picking up DCW shares for a reasonable expectation of 20-25 percent capital appreciation in 12 months.
Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.
Kindly note :
a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.
KASHIWALA
Tuesday, September 16, 2008
Sunday, September 14, 2008
FOLLOW UP ARTICLE : MUTUAL FUNDS
MUTUAL FUNDS :
Several months back I had posted an article How to create wealth using Mutual Fund Route. Many people e-mailed that they had already started SIPs in schemes like Magnum Contra, Franklin Bluechip etc. Few persons who had started investing in Magnum Contra stated that they are seeing falling NAVs and are apparently worried. No one needs to worry for the following reasons.
IF YOU READING THIS IN KASHIWALA'S SITE, IT IS ORIGINAL. IN OTHER SITES, IT IS PIRATED.
a. Our own near and dear ones are investing in Magnum Contra SIP @Rs.3000.00 per month and our highest NAV purchase price was Rs.39.00 and lowest was Rs.23.50. In the meantime, we have received a dividend of Rs.4.00 per unit.
b. My advice to people is to invest at least for seven years in Dividend reinvestment option (more if you can) and wait for 3-4 years more.
c. Try to aim at a corpus of at least 15000 units or 20000 units within this time. Do not count your investment in Rupee value, rather count in in terms of number of units.
d. When the NAV is low, you get more units. When the NAV is high, you will get more dividend which will be ploughed back as further investments.
e. After a period of say, 8-10 years, if you have achieved your goal of 20000 units (suppose), convert it into dividend pay out option. Even if the fund pays a dividend of Rs.6.00 per unit, you will get Rs.10000.00 per month (Rs.120000.00 per annum). Presently when the NAV was around 29 during the years 2006 and 2007, the fund paid a dividend of Rs.4.00 per unit.
f. Finally, do not be perturbed by the falling NAV. This will help you indirectly by bringing more units into your kitty. Continue your SIP. Those readers who have not started any SIP, may start now with at least 3000 to 4000/- per month with a clear cut aim of at least 20000 units in another 7-8 years time.
g. The positive factor in the overall mutual fund industry is that they are sitting on a pile of cash and are making selective investments. So, their own investments will get averaged and we can expect better times ahead.
h. Last but not the least, have a positive view of the market and your investments. In the long run, nothing will go wrong.
IF YOU READING THIS IN KASHIWALA'S SITE, IT IS ORIGINAL. IN OTHER SITES, IT IS PIRATED.
Good luck.
Kashiwala
Saturday, September 13, 2008
REGULAR POSTS
DEAR READERS,
I have not been making any posts for the last several weeks, due to professional and family pre-occupations. There were some bereavements in the family circles as also some health related problems.
I will be starting regular posts in the near future. I thank readers who have been sending me e-mails regularly.
Kashiwala
I have not been making any posts for the last several weeks, due to professional and family pre-occupations. There were some bereavements in the family circles as also some health related problems.
I will be starting regular posts in the near future. I thank readers who have been sending me e-mails regularly.
Kashiwala
Tuesday, June 17, 2008
REPLIES TO QUERIES
1. Delivery Percentage :
There is no calculation for delivery percentage. This can be obtained from BSE Site or NSE Site at the end of the day. In case of shares placed in T Group, all transactions should be delivery based. Therefore, the delivery percentage is obviously 100%. In other cases, this percentage may vary depending on the type of share, share capital, volumes traded etc. In shares which are in F&O segment, there are no circuit limits. Here the delivery percentage tends to be on a lower side with more fluctuations. This is a haven for day traders.
In companies like SBI or other big companies, a delivery percentage of above 30% on any day may indicate accumulation and there are days when the percentage remains less than 15%. Here Day trading is a factor. In small companies a delivery percentage of over 60% may show accumulation and a smaller percentage of 25% or so or even less, may show day trading.
The moot point I was trying to convey is that, when the M factor increases sharply and the delivery percentage remains on a lower side, this indicates increased operator activity (day trading) and it is advisable to book partial profits on any such steep rise. Of course, this comes in practice and keeping a keen watch on the markets.
If you are reading this in Kashiwala's site, it is original. In other sites, it is pirated.
PE RATIO
PE ratio is the share price prevalent in the market divided by the eps. EPS is the net profit divided by number of equity shares. While EPS is a simple arithmatic calculation, PE ratio is a bit complicated as there are no hard and fast yardsticks. EPS is more of a fundamental based study, but PE may have to do more with technicals.
Now Cement Companies are not faring very well due to various factors so the markets are not paying much attention to the shares. A recent example in PE ratio anomaly is Ranbaxy. It is stated that it is being traded at over 40 PE and the increase in price is mostly news driven, due to acquisition of a stake by a Japanese Firm. Other Pharma firms may not be commanding the same PE.
Rather than PE ratios (which are mostly driven by market mechanics and technicals), it is worthwhile to look at the book value and price to book value ratio. If the ratio is much lesser than one (price is less than book value) and there is consistent profitability, it is safer to enter the scrip.
Comments will be welcome.
Kashiwala
There is no calculation for delivery percentage. This can be obtained from BSE Site or NSE Site at the end of the day. In case of shares placed in T Group, all transactions should be delivery based. Therefore, the delivery percentage is obviously 100%. In other cases, this percentage may vary depending on the type of share, share capital, volumes traded etc. In shares which are in F&O segment, there are no circuit limits. Here the delivery percentage tends to be on a lower side with more fluctuations. This is a haven for day traders.
In companies like SBI or other big companies, a delivery percentage of above 30% on any day may indicate accumulation and there are days when the percentage remains less than 15%. Here Day trading is a factor. In small companies a delivery percentage of over 60% may show accumulation and a smaller percentage of 25% or so or even less, may show day trading.
The moot point I was trying to convey is that, when the M factor increases sharply and the delivery percentage remains on a lower side, this indicates increased operator activity (day trading) and it is advisable to book partial profits on any such steep rise. Of course, this comes in practice and keeping a keen watch on the markets.
If you are reading this in Kashiwala's site, it is original. In other sites, it is pirated.
PE RATIO
PE ratio is the share price prevalent in the market divided by the eps. EPS is the net profit divided by number of equity shares. While EPS is a simple arithmatic calculation, PE ratio is a bit complicated as there are no hard and fast yardsticks. EPS is more of a fundamental based study, but PE may have to do more with technicals.
Now Cement Companies are not faring very well due to various factors so the markets are not paying much attention to the shares. A recent example in PE ratio anomaly is Ranbaxy. It is stated that it is being traded at over 40 PE and the increase in price is mostly news driven, due to acquisition of a stake by a Japanese Firm. Other Pharma firms may not be commanding the same PE.
Rather than PE ratios (which are mostly driven by market mechanics and technicals), it is worthwhile to look at the book value and price to book value ratio. If the ratio is much lesser than one (price is less than book value) and there is consistent profitability, it is safer to enter the scrip.
Comments will be welcome.
Kashiwala
NAVNEET PUBLICATIONS
NAVNEET PUBLICATIONS LTD: BSE CODE 508989
NAVNEET was floated by the NAVNEET Group of Companies managed by Gala Family Members who have an enviable reputation of over 46 years in the field of Educational Books Publishing.
Since 1959, Navneet has been a major force in the dissemination of knowledge. NAVNEET is a dominant player in the field of educational books publishing, publishing more than 4000 titles every year in English, Hindi, Marathi and Gujarati.
In 1987, to further strengthen and consolidate the business of book publishing, NAVNEET installed ultramodern printing press at Dantali, District Gandhinagar, Gujarat. By 1991, sophisticated printing and binding machineries had been imported to complete the modernisation-cum-expansion plans of the company.
In 1993, NAVNEET installed machinery to manufacture paper stationery products at Vasai near Mumbai. The company also installed State-of-the-Art 'Note Book on-line' machine in 1995 at Daman. The operations at Daman have since been shifted to more specious factory at Silvassa.
Over the decades, NAVNEET has emerged as an educational products and services company in India. The company's products are sold under the 'Navneet', 'Vikas' and 'Gala' brand names.
NAVNEET's portfolio of syllabus based Books includes high quality books, supplementary books like Guides and 21 Question Sets among others in four languages, English, Hindi, Marathi and Gujarati. The company has a dominant market share in Gujarat and Maharashtra.
NAVNEET also produces various titles in the children and general books category, which are not based on syllabus, such as activity books for children, health series books, cookeries, mehendi,feng-shui etc.
The company enjoys leading position in premiere stationery markets in India, the Middle East, parts of Africa, U.S.A. and Europe. (Source Company Website)
NAVNEET was floated by the NAVNEET Group of Companies managed by Gala Family Members who have an enviable reputation of over 46 years in the field of Educational Books Publishing.
Since 1959, Navneet has been a major force in the dissemination of knowledge. NAVNEET is a dominant player in the field of educational books publishing, publishing more than 4000 titles every year in English, Hindi, Marathi and Gujarati.
In 1987, to further strengthen and consolidate the business of book publishing, NAVNEET installed ultramodern printing press at Dantali, District Gandhinagar, Gujarat. By 1991, sophisticated printing and binding machineries had been imported to complete the modernisation-cum-expansion plans of the company.
In 1993, NAVNEET installed machinery to manufacture paper stationery products at Vasai near Mumbai. The company also installed State-of-the-Art 'Note Book on-line' machine in 1995 at Daman. The operations at Daman have since been shifted to more specious factory at Silvassa.
Over the decades, NAVNEET has emerged as an educational products and services company in India. The company's products are sold under the 'Navneet', 'Vikas' and 'Gala' brand names.
NAVNEET's portfolio of syllabus based Books includes high quality books, supplementary books like Guides and 21 Question Sets among others in four languages, English, Hindi, Marathi and Gujarati. The company has a dominant market share in Gujarat and Maharashtra.
NAVNEET also produces various titles in the children and general books category, which are not based on syllabus, such as activity books for children, health series books, cookeries, mehendi,feng-shui etc.
The company enjoys leading position in premiere stationery markets in India, the Middle East, parts of Africa, U.S.A. and Europe. (Source Company Website)
If you are reading this in Kashiwala's site, it is original. In any other site, it is pirated.
The share capital is 19 Crores, divided into 9.5 Crore shares of Rs.2.00 each. The promoters of the Company hold 62% stake in the Company. About 15% stake is held by Financial Institutions/FIIs etc. The remaining about 23% shares are held by public. The company has substantial reserves of Rs.186 Crores as at March 2007. It is expected to be more by the time FY 2008 results are announced.
Since the company deals in text books etc. used mostly in schools, for obvious reasons, the profitability for Ist quarter, viz. April – June in any year is generally higher than any other quarter. Therefore, YOY results show a better comparison.
The share price was hovering between 70 – 80 for quite some time in Sept. 2007 to November 2007 and started climbing to reach a high of about 160 in January 2008. It is now hovering around 85 levels.
Conservative investors can add Navneet Publications to their portfolio at the current price of around 85 or so, with a clear expectation of 25-30% increase from the current levels in one year. On a longer term basis, with the book value over 10 times the face value of the shares, this could be a potential bonus candidate.
Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.
Kindly note :
a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.
(AJAY SINGH RATHORE)
Friday, June 6, 2008
TUBE INVESTMENTS
TUBE INVESTMENTS OF INDIA : BSE CODE 504973
Tube Investments of India Ltd. (TI) belongs to the nearly 8500 crore p.a. turnover Murugappa Group of Tamil Nadu. The other group companies are Parry Agro, Carborandum Universal etc.
TI has got many areas of operations with works/factories in various places.
1. TI CYCLES :
TI Cycles of India, one of the leading bicycle manufacturers in India, started in 1949, has been at the forefront of innovations and is a pioneer in the market of cycles. TI cycles are the makers of country’s most famous brands like Hercules, BSA and Philips cycles
Tube Investments of India Ltd. (TI) belongs to the nearly 8500 crore p.a. turnover Murugappa Group of Tamil Nadu. The other group companies are Parry Agro, Carborandum Universal etc.
TI has got many areas of operations with works/factories in various places.
1. TI CYCLES :
TI Cycles of India, one of the leading bicycle manufacturers in India, started in 1949, has been at the forefront of innovations and is a pioneer in the market of cycles. TI cycles are the makers of country’s most famous brands like Hercules, BSA and Philips cycles
Brands:
HERCULES - the flag ship brand of TI cycles portfolio, this brand of ours is still as young as ever. Hercules stands for a unique pride of possession - anchored in the time-tested values of heroism and integrity, to which the brand’s customers subscribe in their own lives.
BSA - Another Flagship Brand of TI cycles, BSA stands for Birmingham Small Arms. It signifies the joy of cycling; fun and comfort go hand in hand with BSA. BSA today is an intrinsic part of the Indian family with cycles for everyone - kids, teens and adults.
Certificates: Certified with ISO 9002 and ISO 14001.
Exports: TI Cycles is an exporter to many regions across the global - Europe, South East Asia and Africa; being some of them.
Locations: Chennai (Corporate HO), Nashik, Noida, Durgapur, Bangalore, Kolkatta, Patna and Ludhiana.
If you are reading this in Kashiwala dot blogspot dot com, it is original. In other sites, it is pirated.
2. TUBE PRODUCTS OF INDIA
Tube Products of India is an undisputed leader in the Indian market for precision Welded ERW and CDW steel Tubes with the widest variety and also manufactures wide range of CRCA (Cold Rolled Closed Annealed) Strips catering to international standards
Products
Precision Tubes
Market leader in Telescopic Front Fork Inner tubes and Cylinder bore tubes for shock absorber and gas spring applications.
Propeller shaft tubes for Automotive segment.
Other Speciality products include Rear Axle Tubes, Side Impact Beams, Tie Rods, Drag links. Heavy thick steering shafts and Hydraulic Cylinder tubes
CRCA Strips
A wide range of CRCA strips including special extra deep drawing, high tensile, medium carbon, high carbon finding application in industries such as Bearings, Automobile, Auto Ancillaries and General Engineering.
Locations
Plants : Chennai (South India), Shirwal (Western India) & Mohali (Northern India)
3. TIDC
TIDC is one of India’s leading manufacturer of power transmission chains for the industrial, automotive and agricultural segment and is part of the $ 1.6 Billion Murugappa group. TIDC India was established in 1960 in collaboration with Diamond Chain Co USA and today is the undisputed market leader in both the industrial and automotive chains. The company made a foray into Fine Blanking in line with its vision of becoming a prominent global player in power transmission components and is now a major supplier of FB components to the automotive industry. Currently about 45% of our turnover is from exports and this is an indication about our growing global presence.
I) Product Range
Industrial
· Power Transmission Chains - ANSI & British standards
· Engineering Class Chains
· Agricultural Chains
Automotive
· Drive and Cam chains for Motorcycles
· Timing Chains
· Sprockets
Fine Blanking
Transmission & engine parts for 4 wheeler & 2 wheelers
II) Plant Locations
· Chennai - Industrial chains & Fine Blanking
· Hyderabad- Automotive Chains
4. METAL FORMING
Market position: Pioneers in cold roll forming. Leading manufacturer of roll formed car doorframes with 65% market share in India.
Products: Car doorframes, window channels, SS Rail, impact beams, chassis channels, frames for starter motor (deep drawn) and other roll formed sections for railway wagons and coaches.
Customers: Hyundai Motors India, Maruti Udyog Limited (Suzuki affiliate), General Motors India, Visteon India.
Locations: Chennai (South India), Bawal (North India), Halol (Western India).
SHARE CAPITAL
The company has got a share capital of 36.95 crores made up of 18.47 crore equity shares of Rs.2.00 each. The company has got substantial reserves of Rs.681 Crores, thus commanding a book value of almost Rs.39.00 per share on a face value of Rs.2.00.
Almost 42 percent of the shares are held by the promoter group and about 12 % are held by institutions like Mutual Funds, LIC etc.
The company is showing increased sales turnover (over Rs.1700 Crores in 2007-08). A good portion of its income is derived from export operations. With the appreciation of dollar, the income for the coming year is expected to be good.
The company issued bonus shares of 1:1 in 2004 and subsequently split its shares from Rs.10.00 FV to Rs.2.00 FV. In 2006. Even now it is a good bonus candidate.
Considering the good parentage, strong reserves/book value and expected increased incremental cash flows, conservative investors can consider buying shares of Tube Investments of India Ltd. at the current price of around 47 (which is almost at 52 weeks low). The share price showed a 52 week high of about Rs.97.00. It is quite reasonable to expect a return of 25 to 30 percent in one year in this share.
Disclaimer: This report has been prepared solely for information purposes and the investment is the sole decision of the investor. Such information is impersonal and is not an inducement to invest. The information contained herein has been obtained from sources believed to be reliable and author , accepts no responsibility for the accuracy of its contents. Investors are advised to satisfy themselves fully before making any investments or committing themselves and should consult their own financial consultants whether and how to use such information in making any investment decision. The author accepts no liability arising out of use of the above information/ article.
Kindly note :
a) We advise only regarding fundamentally strong and performing companies. The companies may be mostly profit making and in a few cases, they may be turn around companies.
b) Please go through our fundamental analysis carefully, verify the facts and figures (if you need to) and only then invest.
c) We expect investors to have a time horizon of at least one year and more.
d) We do not advise for short term investing, which is risky.
e) Despite all these, we do not take any responsibility for your financial matters. Investment is solely your decision.
(AJAY SINGH RATHORE)
KASHIWALA
Sunday, May 25, 2008
FUNDAMENTAL ANALYSIS (CONTINUED)
ANALYSIS : LESSON 5
WHEN TO ENTER AND WHEN TO EXIT
Friends, by following the guidelines given in my fundamental analysis lessons or other recommendations given by experts, it is easy to zero in on some shares and purchase them.
WHEN TO ENTER
i) When there is overall pessimism in the industry or the market, people tend to get panicky and get out by selling the shares. Investors should watch out for such occasions and pick up shares in small lots. A classic example was Noida Toll, which fell to a low of about Rs.30.00 during Feb-March 2008.
ii) Based on your own studies of increasing future cash flows, you may pick up the shares and go on adding in dips.
iii) When there is definite news about any company proposing (a) to issue shares to FIIs or other bodies (b) increase their own stake or (c) buy back the shares, you may safely enter such stocks. Eg. DCW followed the above route and the share price went up from Rs.12.00 to more than 40.00.
iv) Keep a track of performing and profit making with respect to their closing prices. At some point of time, the price may be hovering around the 52 week low. It is safe to enter at such times.
WHEN TO BOOK PARTIAL PROFITS (PARTIAL OR FULL)
i) From your entry level, if the share price has increased by 50 – 60 percent, it is advisable to sell about 80 percent of your holdings. Suppose you have 1000 shares of a company and the price has appreciated by 50%, 800 shares may be sold. Subsequently, if the price comes down by 20 or 30 percent, you may re-enter.
ii) Whenever any famous analyst gives a buy call in any share you are holding, there may be an initial run up but subsequently there may be a fall. Book profits after the initial run up. The crux of the matter is to keep track of the Analysts’ recommendations and price movement.
iii) If you are holding any stock and there is any adverse news regarding the company and industry as a whole, the share price may tend to fall. It is advisable to exit and re-enter at lower levels.
iv) Always keep a profit margin with which you are happy. Conservative investors should have a profit margin of 30-40% and exit when this level is achieved.
SHORT TERM TRADING STRATEGIES
i) All readers are definitely having computers in their homes and should be having some knowledge of MS Excel or any other spread sheet. After purchasing some shares of any company, open a file in spread sheet and have the following columns A1 – Date, B1 – Closing price of the share, C1 – Volumes traded, D-1 – “M” factor which is C1 X B1 and finally E1 which is the delivery percentage. When the price and volumes increase, the D Column figure increases.
Now is the important point: Observe the trend for 5 days, 10 days etc. and plot a graph. When there is a steep climb in D Column, book partial profits and wait.
ii) Observe the delivery percentage and the circuit limits of any share. If the percentages are quite high (over 70%) this shows that accumulation is going on. Further, when the share starts hitting upper circuit and delivery percentage is not very high, this means there is increased operator activity. You can exit partially.
iii) After a steep increase, in all probability the share price will come down due to market technicals. So, if you re-enter, you would have made a short term trading profits.
If you follow the above principles, you can not go wrong.
WHEN TO ENTER AND WHEN TO EXIT
Friends, by following the guidelines given in my fundamental analysis lessons or other recommendations given by experts, it is easy to zero in on some shares and purchase them.
WHEN TO ENTER
i) When there is overall pessimism in the industry or the market, people tend to get panicky and get out by selling the shares. Investors should watch out for such occasions and pick up shares in small lots. A classic example was Noida Toll, which fell to a low of about Rs.30.00 during Feb-March 2008.
ii) Based on your own studies of increasing future cash flows, you may pick up the shares and go on adding in dips.
iii) When there is definite news about any company proposing (a) to issue shares to FIIs or other bodies (b) increase their own stake or (c) buy back the shares, you may safely enter such stocks. Eg. DCW followed the above route and the share price went up from Rs.12.00 to more than 40.00.
iv) Keep a track of performing and profit making with respect to their closing prices. At some point of time, the price may be hovering around the 52 week low. It is safe to enter at such times.
WHEN TO BOOK PARTIAL PROFITS (PARTIAL OR FULL)
i) From your entry level, if the share price has increased by 50 – 60 percent, it is advisable to sell about 80 percent of your holdings. Suppose you have 1000 shares of a company and the price has appreciated by 50%, 800 shares may be sold. Subsequently, if the price comes down by 20 or 30 percent, you may re-enter.
ii) Whenever any famous analyst gives a buy call in any share you are holding, there may be an initial run up but subsequently there may be a fall. Book profits after the initial run up. The crux of the matter is to keep track of the Analysts’ recommendations and price movement.
iii) If you are holding any stock and there is any adverse news regarding the company and industry as a whole, the share price may tend to fall. It is advisable to exit and re-enter at lower levels.
iv) Always keep a profit margin with which you are happy. Conservative investors should have a profit margin of 30-40% and exit when this level is achieved.
SHORT TERM TRADING STRATEGIES
i) All readers are definitely having computers in their homes and should be having some knowledge of MS Excel or any other spread sheet. After purchasing some shares of any company, open a file in spread sheet and have the following columns A1 – Date, B1 – Closing price of the share, C1 – Volumes traded, D-1 – “M” factor which is C1 X B1 and finally E1 which is the delivery percentage. When the price and volumes increase, the D Column figure increases.
Now is the important point: Observe the trend for 5 days, 10 days etc. and plot a graph. When there is a steep climb in D Column, book partial profits and wait.
ii) Observe the delivery percentage and the circuit limits of any share. If the percentages are quite high (over 70%) this shows that accumulation is going on. Further, when the share starts hitting upper circuit and delivery percentage is not very high, this means there is increased operator activity. You can exit partially.
iii) After a steep increase, in all probability the share price will come down due to market technicals. So, if you re-enter, you would have made a short term trading profits.
If you follow the above principles, you can not go wrong.
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