Wednesday, September 14, 2016

5 hot stocks & their levels- to 'enter' during correction

It has mostly been the case with retail investors / traders that they 'buy' after rally and 'sell' after a fall. In short 'hamesha train chhut jati hai'. It is not a good idea to run behind a price and grab a stock at any 'cost'. Professional traders / investors wait patiently for a stock to arrive at a desired level. It is not advisable to get into a stock at current market price. Instead place an order at an expected level. Retail traders / investors buy at market price because they do not anticipate the levels before the elve reaches. While it is not guaranteed that we shall get all those anticipated levels, there is always a 'chance' we get a huge discounted price.
Here are some stocks which we can keep in the watch list for an anticipated fall during current (possible) correction. Market always give us an opportunity to enter, provided we should be ready to grab that opportunity. I have arrived at the levels purely on the basis of chart structure and possible support levels.

All these 5 stocks are fundamentally placed at a very strong position, however the prices at current level are not appealing. Markets do what we do not think. So at current level we may feel that the prices which are shown on these charts are too far to reach, however there is always a possibility of getting it.

1. Ajanta Pharma:
Ajanta pharma broke out of long consolidation during last week of July. That was good price to get into the stock. A strong support emerges near the level of 1700-1650-1565. At 1700 is a discount of 11% from current price. If one gets these levels there is high chance that the stock will resume after testing these levels.

2. Asian Paints:
One of the dream stocks to be in. While it does not give many opportunities to enter into, we can always anticipate one, instead of entering at high price. First level I shall watch for is 1025 and then 920. These are at a discount of 12% and 21% respectively.

3. Pidilite Industries:
 If you remember I had recommended this stock on breakout near 640. You can read that article here. If you missed it at that level, we can wait for the stock to reach the same level if the correction lasts for some time. The price of strong support is around 625-650. The discount from current level is 8.5%

4. Tata Motors:
After a dream run Tata Motors seem to have made a double top. If it corrects substantially from current level, the support emerges at 470 and then at 425. That's a 14% and 22% respectively.

 5. Ultratech Cement:
Ultratech Cement experienced one way rally after breaking out of 3330. This kind of rallies are expected to have substantial correction. Lets expect it to reach around 3330 in the days to come. That's a discount of 13.5% from current level.

Getting into a stock at right price requires lot of patience. Moreover, you never know whether they will surely get to anticipated price. However, if the stocks reach to those levels you have an attractive prices to enter into with heavy discount without any bargain.