Hello Prakash, Joshi
Here is my take on
Hexaware Technologies
Hexaware is a fundamentally good company and is ranked as the 12th largest IT service exporter in India. It has many fortune 500 companies in its client list.
The share price basically crashed when the annual out look was revised in July. The estimate of revenue for the year ending December 31, 2005 was reduced $153 million from previously issued revenue guidance of $170 million. Based on the revised revenue guidance, the expected profit estimate was in the range of $18 - 19 million. By august the price hit a low of 95. Since then it has been moving sideways in a range of 100 to 115.
The last quarter result was very good. The Company posted a profit after tax of Rs 220.586 million for the quarter ended September 30, 2005 as compared to Rs 65.677 million for the quarter ended September 30, 2004. Total Income has increased from Rs 646.978 million in Q3-04 to Rs 996.824 million for the quarter ended September 30, 2005.
Recently the Annual Net Profit guidance for FY '05 has been raised to $ 19.5 million from $18 - 19 million announced earlier, while maintaining the revenue outlook at $ 153 million.
Overall it is a very good company. But has not found the fancy of the market players. The stock has been languishing in the region of 100-115.
On studying the chart we can notice an interesting aspect. The ADX line has been lying low well below both the DI+ and DI- line for quite some time. The ADX values have been below 10 for the quite sometime. That would mean that there has been consolidation going on and the bulls and bears have been fighting it out, which is evident from the +DI and -DI lines. All these would indicate that the stage is being set for a breakout. The bulls and bears have been battling it out and one of them would eventually win. The victory is often results in a major move. One such move was in Arvind mills which I has explained in a earlier post of mine. I feel that stage is set for Hexaware for major move. Normally the breakout is indicated by a sudden rise of the ADX line by 3- 4 points. Whichever line on top would be the winner. So it is a wait and watch situation. I strongly feel that considering the good results the breakout will be bullish.
This has a strong support at 99. On the upper side the first obstacle is at 106 then 110. Today the +DI is above DI. My favorite Indicator TRIX is also turning. Rsi is also rising. So we wait for a bullish breakout.
Sorry for making it so elaborate
My friend Agilent would obviously be upset.
So in a nutshell for Hexaware we can anticipate a breakout. It could be in either direction. But all indicators couples with Fundamental give a much better chance for a Bullish breakout. Put a strict stoploss at 95 for the down side.
Chart enclosed if anybody is interested. Friends with contrary opinion please do post your views.
Views on Geometric and Dlink Later
regards
karthik
