Hitachi Home and Life Solutions (India) Limited:
Hitachi Home & Life Solutions (India) Limited is a subsidiary of Hitachi Home & Life Solutions Inc., Japan. 69.90% stake is being held by the promotors. The Ahmedabad based company is a leading manufacturer of air conditioners, refrigerators and fully automatic washing machines. The company’s net profit was Rs.19.33 crores for the financial year 2006 – 07.
The stock made a high of 124.85 in August 2005. It has been in some zig zag pattern since then. After 24 months of consolidation it has broken out with reasonably good volumes (in fact more volumes than at its previous peak). In January 2007 the stock actually broke its previous high; but didn’t close above it and volumes were not encouraging either. The long term targets for the stock is 208 and 260. Good support exists at 100.
Nagarjuna Fertilizers and Chemicals Limited:
The company’s natural gas based urea plant with a capacity of 1.2 million tonnes per year is located at Kakinada, a port town in the state of Andhra Pradesh on east coast of India. Natural gas is drawn from Krishna – Godavari basin. The company plans to expand the capacity to 1.7 million tonnes soon. Product range includes urea, anhydrous ammonia, diammonium phosphate (DAP), Muriate of Potash, hydrates of zinc sulphate and speciality fertilizers. It declared a net profit of Rs.31.71 crores in 2006 – 07, more than 50% down from its previous year’s figure of Rs.66.86 crores.
This stock witnessed a bullish breakout in May 2007 almost after two and a half years. The volume was a record high as can be seen in the chart. When it broke the previous resistance in November 2004 the volumes were pretty good. This is another factor which makes the stock more interesting. Though there had been some hiccups in between, it has finally broken out. The stock has a good support around 18.25. The long term target works out to 39.
PSL Limited:
PSL Limited has expertise in the design, manufacture, supply, erection and commissioning of plants, machinery and equipments catering to the pipeline industry. It is one of the largest pipe manufacturers in India with 10 pipe mills at strategically coast based locations in Chennai, Kandla and Daman with an annual capacity exceeding 1 million metric tonnes of size varying from 16" dia to 120" diameter with wall thickness from 5mm to 25mm. The company’s net profit stood at Rs.62.16 crores for the financial year 2006 – 07.
The stock has appreciated from a low of 29.70 in October 2002 to a high of 312 in January 2006. A correction, equivalent to 38.2% retracement occurred. Though it managed to break 50% retracement, never closed below it. This month it has witnessed a powerful bullish breakout with decent volumes. The long term target for the stock works out to 474.
PTC India Limited:
In India, each state has its own demand – supply scenario for power which sometimes could be seasonal. While one state is on a deficit some other state may generate excess power. PTC India Limited (formerly known as Power Trading Corporation of India Limited), was set up to act as an entity which could undertake trading of power to achieve economic efficiency and security of supply. PTC acts as an intermediate by buying power from the generation projects and sell to multiple power utilities and other buyers. It declared a net profit of Rs.35.09 crores for the financial year 2006 – 07.
The chart displayed above shows the valiant attempt to break resistance on 4 occasions before a breakout occurred this month. These are marked 1,2,3 and 4 on the chart. It can be noted that even though the stock managed to close above resistance levels, it could not move up further due to lack of volumes. There is no hard and fast rule about this, but surpassing at least 75% of the previous peak’s highest volume gives the stock better chance of sustaining the breakout. Now that this has happened, we can expect targets of 122 and 155.
Union Bank of India:
Union Bank of India has the proud distinction of being flagged off by Father of the Nation, Mahatma Gandhi. It is a public sector unit with 55.43% share capital held by the Government of India. The bank came out with its Initial Public Offer (IPO) in August, 2002 and Follow on Public Offer in February 2006. The bank’s net profit was Rs.84.54 crores for the financial year 2006 – 07.
The stock has become bullish on long term charts this month, by breaking its previous high at 143 with volumes. It has taken almost 2 years for the consolidation pattern to get over. The stock had formed a “double top” as can be seen in the chart. Now that it is broken, we can expect targets of 243 and 324 in future. In my previous article “5 Great Long Term India Stock Buys” published last month, we discussed about DENABANK and “triple top” formation eventually getting broken. Chart patterns and candlestick patterns form vital part of technical analysis and it is essential to examine these first, before analyzing other criteria.