Bears are in control of India telecom stocks

Bharti Airtel:

The stock is bearish in both short term and medium term charts. Volumes have gone up considerably during the last four months while prices continue to fall. The stock had broken the medium term support at 750 during January. Absence of typical chart patterns indicate uncertainty and medium term investors may consider exiting at higher levels.

Idea Cellular:

This stock too has turned bearish. During the week ending January 25 it had closed below the support trendline. The stock will face strong resistance around 130 during the pullback rally. However, one may consider a short term investment if it closes above 114.40.

Mahanagar Telephone Nigam:

During the month of January, the stock had lost 38% and almost tested the previous low (long term support) at 108.25. It had also broken the medium term support at 128.80 during the week ended February 1. The harami candlestick pattern formed during the week ending February 15 could not be confirmed last week. This stock too, is bearish for medium term.

Reliance Communications:

RCOM has formed a bearish "double top" in medium term charts. It had also formed a bearish three outside down pattern at the second peak. It has now broken the support trendline thrice but has not closed below it. A technical rally upto 726 cannot be ruled out and this should be used only to exit the stock. The declining volumes near the second peak followed by break below 726 confirms the pattern formation.

Tata Communications (VSNL):

The stock had completed the five waves and wave ‘a’ started during the first week of January. As such, there are no reversal signs and when the wave ‘b’ commences it will have a technical target of 645 i.e. 61.8% retracement. In this chart it can be observed that the low of wave 4 has fallen below the high of wave 1. From a short term perspective there is a strong resistance at 563.

Tata Teleservices (Maharashtra):

This stock had broken the support trendline but has not closed below it. The commencement of wave ‘b’ may be confirmed by a strong reversal signal. As such the stock is bearish. When wave ‘b’ commences it is likely to hit 50 which is the 61.8% retracement from considering a high of 64.95 and a low of 26.

Which of the Birla Groups in India is most valuable? – Part 4

In this last part of article series let us discuss about the Aditya Birla group. The group manages the following companies in India.

• Grasim Industries (Viscose staple fibre, grey cement, white cement, sponge iron, chemicals and textiles)
• Hindalco Industries (Alumnium and copper)
• Aditya Birla Nuvo (Carbon black, chemicals, fertilizers, textiles, garments and viscose filament yarn)
• UltraTech Cement
• PSI Data Systems
• Aditya Birla Minacs Worldwide
• Essel Mining & Industries
• Shree Digvijay Cement
• Idea Cellular
• Aditya Birla Insulators
• Aditya Birla Retail
• Bihar Caustic and Chemicals

In addition, the group has presence in other countries too. It manages 6 companies in Thailand, 4 in Philippines, 5 in Indonesia, 3 in China, 2 each in Egypt and Canada, one each in Australia and Laos.

The group has a market capitalization of USD 31.5 billion and a combined workforce of 100,000 in 25 countries. It was adjudged "The Best Employer in India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007.

Summary:

Scrip/NSE Ticker	BSE Group	Scrip Code	Price 16-Nov
Grasim Industries (GRASIM)	A	500300	3837.00
Hindalco Industries (HINDALCO)	A	500440	203.75
Aditya Birla Nuvo (ABIRLANUVO)	A	500303	1562.00
UltraTech Cement (ULTRACEMCO)	B1	532538	1004.00
Idea Cellular (IDEA)	A	532822	127.00
Bihar Caustic & Chemicals (BCCL)	B1	500057	81.25

The following table shows the key financial ratios:

Scrip	P/E	P/BV	Gain since 01-Jan
GRASIM	20.19	5.65	38.14
HINDALCO	9.29	1.90	17.97
ABIRLANUVO	74.44	4.66	26.80
ULTRACEMCO	15.55	7.09	(5.52)
IDEA 1	75.45	29.81	69.33
BCCL	5.93	1.29	85.45

¹ Idea Cellular was listed on March 9, 2007 and the gain has been computed based on IPO price of Rs.75.

Grasim:

During July 2007, an “ascending triangle breakout” (bullish continuation pattern) occurred in the medium term chart of Grasim. The technical target of 3948 was achieved when the stock hit a high of 4051 a couple of weeks ago. As such, there are no reversal signs yet. Hence it can be concluded that the bull run should continue. The next target for the stock works out to 4602. However, the declining volumes during the uptrend is a concern.

Hindalco:

The stock had fallen by about 52% between May 2006 and May 2007 as can be seen above. The resistance at 192.70 could not be broken during the uptrend that started in May. However, it has now successfully closed above it for two weeks in a row. The stock has already touched a high of 240 which is 100% retracement from the low of 120. It is likely to test the previous high at 251.30 when the uptrend continues. National Aluminium Company (NALCO) has gained 88.47% this year compared to Hindalco’s 17.97%.

Aditya Birla Nuvo:

We had already discussed about this stock in my previous article, “Which of India’s Top 10 “Family Named” Stocks is Most Valuable? – Part 1”.

I had mentioned that the stock is bullish for the medium term. It is on a corrective decline now and it should find support at around 1400 levels. The support trendline is intact and we need to wait for a confirmation for a trend reversal. The next target for the stock works out to 2000.

UltraTech Cement:

This stock has so far not yet closed above its resistance at 1250 in medium term chart. However, the support trendline has not been broken. There are no reversal signs yet. In the absence of such confirmations, it may be concluded that the bullish trend will continue. The projected technical target for the current upmove is 1324.

Idea Cellular:

Like UltraTech, this stock is also bullish and it is on a decline. Suport exists at around 117. Once again, let us wait for a technical confirmation for a trend reversal.

Bihar Caustic & Chemicals:

This stock too, is bullish. It broke the previous resistance at 65.50 three weeks ago with good volumes. We can see a bullish “triple bottom” formation. This is a highly bullish sign and the stock is expected to reach a target of 121.50 in the medium term.

Conclusion:

All the six stocks belonging to Aditya Birla group are bullish in the medium term charts.

Grand Finale: The India Street verdict

Parameter	MP Birla	GP – CK Birla
Stocks	4	2
Bullish stocks	1	2
Price appreciation above 20% since January 1	1	2
Growth stocks (High P/E)	1	1

Parameter	KK Birla	Aditya Birla
Stocks	6	6
Bullish stocks	4	6
Price appreciation above 20% since January 1	4	4
Growth stocks (High P/E)	1	2

The GP – CK Birla group is the smallest as far as number of listed companies are concerned. Only one stock from MP Birla group is bullish. KK Birla and Aditya Birla groups have six listed stocks each and technically, all the Aditya Birla group stocks are bullish compared to 4 of KK Birla group; two of its companies (Aditya Birla Nuvo and Idea Cellular) are ‘growth’ stocks compared to Texmaco of KK Birla group.

Kumar Mangalam Birla

Therefore, we can conclude that the Aditya Birla group companies are more valuable in Indian stock market.