8/14/2019 Top 5 India inert stocks for the last 12 months

1/7

Top 5 India inert stocks for the last 12 months

Disclosure

Investors buy stocks anticipating appreciation in prices. Due to marketconditions, three possibilities exist: prices increase, decrease or do notchange much. We have discussed about bullish and bearish stocks inprevious articles. In this article we will discuss about some stockswhich have neither gained nor lost substantially (less than 1%) in thelast 1 year or 249 trading sessions. As usual, the discussion isrestricted to either A group or B1 group stocks of BSE (Bombay StockExchange).

D-Link India Limited:

D-Link is a leading IT hardware company in India. The product range includes switches, routers,

firewalls, security gateways, ethernet cards, ADSL modems, wirelessantennae, VoIP equipment etc. With a net profit of Rs.21.92 crores in2006 07, it hasnt performed badly when hardware prices have beenfalling.

http://groups.google.com/group/theindiastreet/web/Disclosure.pdfhttp://groups.google.com/group/theindiastreet/web/Disclosure.pdf

8/14/2019 Top 5 India inert stocks for the last 12 months

2/7

http://groups.google.com/group/theindiastreet/web/D-LINK.jpg

The weekly chart shown above indicates that the medium term supportwas broken in February 2007. However, the last support at 62 still

remains intact. Though a higher high and higher low was formed, theresistance trendline hasnt been broken yet. So the market isindecisive for the medium term about this stock. Only a close above89.15 on weekly basis will trigger the bullish trend for the mediumterm. On the contrary, a close below 69.20 with volumes on weeklychart will result in a descending triangle breakout, which will meanfurther bearishness for the stock.

The daily chart indicates that stock became bullish for short term inApril this year. But the buy signals generated have been short lived.Watch the whipsaws for the last two months. These can occur at

market tops as well as at bottoms. Considering that the stock hadmade a high of 235.90 in February 2004 and low of 62 in June lastyear, we can conclude that the stock is in the process of bottomingout.

Harrisons Malayalam Limited:

http://groups.google.com/group/theindiastreet/web/D-LINK.jpghttp://www.theindiastreet.com/2007/05/chart-patterns-and-markets-reaction.htmlhttp://groups.google.com/group/theindiastreet/web/D-LINK.jpghttp://www.theindiastreet.com/2007/05/chart-patterns-and-markets-reaction.html

8/14/2019 Top 5 India inert stocks for the last 12 months

3/7

Harrisons Malayalam Limited is the largest producer of rubber in India.

It is also the largest cultivator of tea in southern India. The otheragricultural products include areca nut, banana, cardamom, cocoa,coffee, coconut, pepper,vanilla, organic tea and spices (these areproduced in smaller quantities). The company declared a net profit ofRs.14.11 crores for the last financial year.

The weekly chart clearly tells us that the low of 63.30 formed duringJuly 2006 has not been broken yet. It is in strong consolidation for themedium term. Watch the resistance trendline getting broken and stockclosing above it in the chart shown below. The attempt to break thesupport was successfully negated in March and June earlier this year.

As in the case of D-Link, there are plenty of whipsaws occurring at thepossible market bottom in the daily chart. It is interesting to note thatthis stock had fallen from its all time high of 193.75 in March 2006 to alow of 63.30 in July 2006. In other words, it lost nearly 67% in 4months.

A weekly close above 76 will initiate bullishness in the medium termfor this stock.

8/14/2019 Top 5 India inert stocks for the last 12 months

4/7

http://groups.google.com/group/theindiastreet/web/HARRMALAYA.jpg

NRB Bearings Limited:

NRB Bearings Limited manufactures variety ofbearings like needle roller bearings, cylindricalroller bearings, spherical roller bearings, wideinner ring bearings, tapered roller bearings andball bearings. It declared a net profit of Rs.39.76

crores in the financial year 2006 07.

TUV SUD Management Service (Gmbh) have awarded ISO 9001:2000corporate certification to the company.

http://groups.google.com/group/theindiastreet/web/HARRMALAYA.jpghttp://groups.google.com/group/theindiastreet/web/HARRMALAYA.jpg

8/14/2019 Top 5 India inert stocks for the last 12 months

5/7

http://groups.google.com/group/theindiastreet/web/NRBBEARING.JPG

We can see the descending triangle breakout, a bearish continuationpattern in the weekly chart. The first support at 88.56 was broken

seven times, with low going below it. But the stock had managed toclose above the support. During June this year, it has managed topierce the support and close below it for two weeks in a row. Theminor upswing that followed was simply a technical rally. As thesupport was broken on close basis for the second time, the volumesalso went up. The bearish target after this triangle break out is 60.30.It can be seen that the second support at 80 too has been broken once.So the medium term trend is bearish for this stock.

Ramco Systems Limited:

Ramco Systems Limited is a Chennai based enterprisesolutions and information technology services company.Its platform is known as Ramco Business ProcessDelivery System. The software solutions comprise ofprocess manufacturing and optimization, business

analytics, financial services and insurance etc. Services include datamanagement and warehousing, customer relationship management,retail merchandise management etc. It declared a net loss of Rs.32.30crores for the financial year 2006 07.

In the weekly chart shown below, the stock has not been able toconclusively penetrate its resistance at 233. Moreover, its support at140.05 was broken in March this year. The rally in the last week ofApril was also not sustainable and the stock once again broke itsprevious support. However the support at the recent low of 118 is stillintact. However, unless the stock closes above 190 with good volumeson weekly basis one cannot think of further uptrends in the stock for

http://groups.google.com/group/theindiastreet/web/NRBBEARING.JPGhttp://groups.google.com/group/theindiastreet/web/NRBBEARING.JPG

8/14/2019 Top 5 India inert stocks for the last 12 months

6/7

the medium term. That doesnt seem likely since the daily chart showsthat the stock had broken its 61.80% retracement at 145.50.

http://groups.google.com/group/theindiastreet/web/RAMCOSYS.JPG

Surya Pharmaceutical Limited:

Surya Pharmaceuticals Limited is involved in the manufacturing,customized development, marketing and distribution of various bulkdrugs (active pharmaceutical ingredients), especially Penicillin

derivatives. The product range includes antibiotics, oral formulations,antihistamines, anti-ulcerants, non sterile and sterile formulations(from next year). It reported a net profit of Rs.27.32 crores during lastfinancial year.

The stock had fallen from a high of 177 in August 2005 to a low of55.15 in June 2006. It managed to bounce back and touch a high of98.60 within two weeks; since then, it is only witnessing sidewaysmovement. The support at 66 was broken conclusively during March April this year, as the stock closed below it consecutively for fiveweeks. During the process, it also broke its next support at 55.15 by

making a new low of 54.20, though managing to bounce back. Thescenario in daily charts is not encouraging either, as the stock hasbroken its short term support at 67 on July 12. It is difficult to visualizethis stock getting past beyond its medium term resistance at 98.60.

http://groups.google.com/group/theindiastreet/web/RAMCOSYS.JPGhttp://groups.google.com/group/theindiastreet/web/RAMCOSYS.JPG

8/14/2019 Top 5 India inert stocks for the last 12 months

7/7

http://groups.google.com/group/theindiastreet/web/SURYAPHARM.JPG

Conclusion:

When investing in stocks the short term or medium term trend has tobe ascertained first. Stocks that move in sideways are likely tobreakout either way and there is a risk involved with respect to priceand holding time. Also, once a stock witnesses a bearish breakout, itmay not be able to bounce back to its previous highs. Hence it isadvisable to avoid stocks that are sideways. Trend is your friend andride the trend accordingly!

Sundaramurthy Vadivelu

LABELS: BEARISH STOCKS, SIDEWAYS MOVEMENT, D-LINK INDIA,HARRISONS MALAYALAM, NRB BEARINGS, RAMCO SYSTEMS, SURYAPHARMA

Suggested Reading

India Stock Market July Monthly Review

5 More Stocks to Avoid in the Short Term

5 Reasons to Remain Bullish on India Stocks in

the Short Term Chart Patterns and markets reaction

Video: Entertaining Look at Indias EconomicHistory

http://groups.google.com/group/theindiastreet/web/SURYAPHARM.JPGhttp://www.theindiastreet.com/2007/07/india-stock-market-july-monthly-review.htmlhttp://www.theindiastreet.com/2007/07/5-more-stocks-to-avoid-in-short-term.htmlhttp://www.theindiastreet.com/2007/07/5-reasons-to-remain-bullish-on-india.htmlhttp://www.theindiastreet.com/2007/07/5-reasons-to-remain-bullish-on-india.htmlhttp://www.theindiastreet.com/2007/05/chart-patterns-and-markets-reaction.htmlhttp://www.youtube.com/watch?v=NlYHOMLuoR8http://www.youtube.com/watch?v=NlYHOMLuoR8http://groups.google.com/group/theindiastreet/web/SURYAPHARM.JPGhttp://www.theindiastreet.com/2007/07/india-stock-market-july-monthly-review.htmlhttp://www.theindiastreet.com/2007/07/5-more-stocks-to-avoid-in-short-term.htmlhttp://www.theindiastreet.com/2007/07/5-reasons-to-remain-bullish-on-india.htmlhttp://www.theindiastreet.com/2007/07/5-reasons-to-remain-bullish-on-india.htmlhttp://www.theindiastreet.com/2007/05/chart-patterns-and-markets-reaction.htmlhttp://www.youtube.com/watch?v=NlYHOMLuoR8http://www.youtube.com/watch?v=NlYHOMLuoR8