Strong Industries & Stocks

d_s_ramesh

Well-Known Member
#1
The broad market has retraced bearish divergence on the weekly charts and many indicators are showing weakness. Still why is the market not turning bearish, but is giving whipsaw trades and directionless. It is because some of the Industry groups within the sectors show very strong performance. It is those stocks from these groups that are keeping the market on the bullish aura.

We have identified the Industry groups which are highly bullish at the moment. One more issue we noted here is that, when the Industry Index is bullish it cannot be blindly taken that the leader of that group is the strongest. An example of this pattern is reflected in CIPLA, which is the leader in the Pharma Industry group. While the Industry chart has retraced bearish divergence now, it has gained more than 70% in the current bull move before bullish exit. Whereas CIPLA, did not return that much.

Right through the bullish market of 2009, CIPLA was underperforming its Index. While there were many stars in this Industry, which has outperformed the Pharma Index. Stocks like AJANTHA PHARMA, CADILA, DRREDDY, FDC, IPCA, LUPIN, MERCK, STAR, TORRENT & UNICHEM.

On selecting a stock to trade, if we take the outperformers, they are likely to give us above average returns. More than that, if the market goes against our analysis, underperformers are the ones that get hit the hard way. In turn causing an earth quake into our capital.

Here we have identified the stocks of that kind & leave it to the traders discretion to select the best according to their risk appetite & take position.
Cement BIRLACORP, DALMIA, SHREECEM & ULTRATECH.
Electronic & Electrical Equip HAVELLS.
AUTO 2 & 3 Wheel
BAJAJ-AUTO, TVSMOTOR.
Tyres APPOLLOTYRE.
Plastics NILKAMAL, SUPREME, VIP.
Leather Products BATAINDIA.
Hospital APOLLO HOSPITAL.
Diamond TITAN.Telecom Equip AVAYA, GTL, HONAUT, NELCO, SIEMENS.
Telecom Services BHARTI, IDEA, MTNL, TULIP.
Pesticides & Agrochemicals RALLIS.
Paper BALLARPUR.
Many of these stocks are trading above value at present. We can keep a watch and when the broad market corrects, we get the opportunity to trade in these stocks.