TATA STEEL

Tata Steel has a huge global presence with the take over of Corus. With a net profit that is seen to be rising Q on Q to almost 1500 cr last quarter, TISCO has seen rapid and consistent rise. With a price of 593, currently TISCO is quoting at a forward PE of around 7.5 . Though this not less for cyclicals but the fact that TISCO has now accquired a truly global status and is insulated from the controls etc of a particular country makes it a compelling buy in ones portfolio. Also another factor of note is that TISCO pays good dividends. With a dividend yield % of around 2.8% it is one of the decent dividend payout company. TISCO also has reserves and surplus to the tune of 20,000 crores. The promoter holding in the company is around 30% that has gone up by a couple of % points over the past couple of years. With a consenses estimate of EPS of around 110 for March 09, the stock currently is at a PE of around 5.5, which is good for a company of TISCO's stature. Coming to a technical parameter, the stock is currently in a negative MACD curve, that means that one can wait for a little time before buying the stock.

INDIA CEMENTS

India Cements is a chennai based company, with a market cap of around 4500 crores. The company has been making profits in the range of 140-220 crores in the previous quarters. The rate of the growth of the top line has been steadily growing from 1200 odd crores 4 years back to 3600 odd crores last year. The company is quoting at a forward earning multiple of around 7-8, that is not exactly cheap for a cyclical company. Currently the company is in a uptrend with a positive MACD (that many cos are not today!), however with a PE of 7-8 on a cyclical its not a screaming buy, however if you already have the stock its a good hold till the time the stock is in the positive zone.

NIFTY STILL POSTIVE BUT NOT INDIVIDUAL STOCKS

Nifty is still moving in the positive territory of the MACD curve, even though there has been some downturn in the last few days. Thursdays fall can be attributed to the inflation that has gone beyond the 12% curve to hit 12.44%, this is been quoted as the highest inflation figure in the last 12 years! quite obviously it was the trigger for the markets shed off some recent gains. Intersting thing to note is though nifty and large caps such as Reliance Industries, ICICI bank, Bharti Airtel, ITC, Hindustan Unilever (HLL), State Bank of India (SBI) is still positive some of the individual stocks stocks specially the mid caps (and some exceptions in the large cap e.g. Infosys Technologies, Reliance Petroleum etc) have moved into negative MACD. This is not a good sign as the recovery that had happened was a slow one, so if the stocks donot recover quickly then we might again see prolonged sideways float of these stocks, with a negative bias. Although personally I donot see that these will crumble the way they did in the first of this year, yet the fall in midcaps is never a soft landing and they tend to lose as much as 5-20% in a single day also. So where do we go from here.... my sense is this series is safe and we do not have much to fear. However if the large caps move in the positive zone while the small and mid caps lag behind then it is not the ideal market that the retail investor would want to be in. So as of now the big boys are looking in a better shape to weather the storm!!!

Peace returns to the markets

finally after the turmoil of the last few months, some semblance of calmness is returning to the markets. This period is typically characterised by periods of small movements on the markets and very few of the steep declines. Most of the stocks have broken above the zero level of MACD and started to enter the positive territory. If the same trend is to be believed we look safe for august and typically the months after august are considered good for the markets in any case. If the earnings continue to grow as they have then the markets dont have much to fear in the coming months as the growth in earnings will start pushing the PE up in any case. Also since the PE contracted in the months of Jan-July from a sensex average of 21 to sensex avg of around 12, the PE expansion should also help stocks move up and quote PE's of above 10 atleast for good individual stocks. Good times cant be far ahead!!!