RCI Industries - Growth pick

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Company in discussion is recommended by my stock market guru Research Wings.

Rationale for picking this story:

Company who came from BSE SME to BSE Main and now from low margin trading firm to manufacturing firm, RCI industries have exhibited excellent growth path.

On going 80 Crores capex for enhancing capacity of which 49 Crores met from preferential allotment from Promoters and remaining out of internal accruals

Talking about 3 divisions of the company :

Copper trading - 

Low margins business

Round products - 

Medium margin business, current capacity at 24000MT from 20000MT in FY2017

Flat Products - 

High margin business,  acquired 2400MT capacity Devi Metals,  ongoing capex for 6000MT by FY2018 &  24000MT by FY2019

Company focus is shifting from trading to high margin flat products manufacturing business and hence highlighted


Previous closing price is ₹249.45 and I bought today at ₹246 in my personal portfolio.


Comparing it with peers Precision Wires and Ram Ratna wires(Don't go with peers given on screener.in or other websites as automated websites will give peers in commodity trading and as discussed above, RCI has now become Copper ancillary manufacturer as primary business) ,  inspite of excellent growth on cards,  it's still undervalued.  Such stocks are typical hidden gems,  otherwise growth stocks usually demands higher valuation if information is widespread in the market.


Checking the company on charts

As We can see from the chart,  on account of previous growth,  stock has given good rally after getting in from BSE SME to BSE Main and is in consolidation for complete year when capex is ongoing.  This chart pattern looks similar to cup and handle where rally is succeeded by consolidation (cup)  and on the verge of Breakout (handle)


Recent Volumes spurt also supports the price trend.  Now only wait is for a massive Breakout at 52week high after which many analysts will start giving calls but we have grabbed it when it's sleeping. 

Short sell Trade idea

With open high same today even in such a strong opening of market,  Hindalco looks for a short candidate with SL of 278.5 which is upper Bollinger and also near yesterday's high. Its an opportunity for double top in Hindalco.  Strong support looks near 50Moving Average i.e. 257. Which can be a target for Jan Expiry. Previous trading price is around 274 which gives a very good risk reward ratio for traders

Breakout in Hind Copper

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https://youtu.be/DnVbWV3XMGc

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और दुसरो को भी भेजीये,  जो नीवेष करने के लिए इच्छुक है

Traders active on Social Media might have observed so many Hind Copper Flag pole/Pennant charts even before breakout. Now that breakout have actually happened due to China news of copper production shut down, copper prices have gone up, thereby pushing Hindustan copper prices up.

Traders curios to learn this pattern for trading purpose can go through charts as follows.

Beginners need not worry about whether it is flag or Pennant, I have showed the basic Pennant and Flag pole on the chart and individual traders and Investors can decide on their own as whatever they want to consider. Important is to find pole high to calculate target for fresh rally. in this case, first breakout happened at around 60 and then at 70 it was massive volume breakout which formed the base for the Pennant. Previous rally was from 70 to 110 giving us 40 points and now fresh breakout happened at 95 giving us opportunity for riding this rally upto 135.




Though I have not bought this for technical reasons, but my personal buying happened at around 86(Missed at 60) to ride on copper Cycle, which is a fundamental reason. I have shared the fundamental reason on another post.  Click here to read fundamental reasons. This post is for the traders who wish to learn application of strategies with live charts and want to play short term.



Investors who wished to understand why I personally bought Hindustan Copper,  please click on following link

http://jttime.blogspot.in/2018/01/investing-in-copper-theme-hindustan.html


Happy Investing

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Transformers update

Transformers play important rule in electrification and with central government aggressively working on rural electrification,  we see sudden demand for Transformers among Indian players with Bharat Bijlee and TRIL (Transformers and Rectifiers India Limited)

If you see order books of both,  it has recorded historically strong order books this year and expected to grow even more next year.  Voltamp on the other side have dissappointed in terms of order book. FY2018 seems to be dull period for it,  and expecting spike in FY2019.  Need to keep watch on volumes to see any potential in Voltamp.

Already initiated Transformers sector and updated once for dissappointing Q2FY18 results of TRIL.  But still have good hopes to show strong results in Q3 & Q4FY2018

#JTtime.blogspot.com

Happy Investing 💸💸💸💸💸💸💸

Transformers demand update - TRIL

TRIL results dissappointed

With historically strong order books in hand,  such low volume business was not expected giving excuse of overhead costs absorption.  Company was busy in third party exports sales and diverted from their own dispatches.  Expecting gap down or LC series.

Order book in hand w.e.f. 1st November 2017 is 833 Crores ₹ where full year sales FY2017  was 802.24 Crores ₹.  So it clearly indicates operations issue. But still have faith that if orders executed on time,  will see a big leap in FY2018 results



Happy Investing 

Navin Fluorine - Value pick

Last closing price at around 700
Strong uptrending share,  right now at bottom of channel as can be seen on chart.

It's on good support  even for Positional traders and can be bought at CMP with SL just below 100 MA of 679 and target of new 52 week high.  

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It's a good pick also for investors.  Following are few trigger points for investors to keep Navin Fluorine in their portfolio 

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1) See the Debt reduction pattern.  It's on continuous declining trend suggesting companies strong growth path. 

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2) Sudden jump in Fixed Assets figures indicating some investment on company for expansion

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3) Even Cash flow suggests companies investment in FY2017 and it also indicates strong growth in cash flow from operations. Generally such growth happens when payment cycle or income realization time reduces.  For your information,  first line a over suggests cash flow from operations,  i.e. Their main business or say by selling products.  Second line indicates cash flow from investing.  It's showing - 159.29 Crores indicating companies investment.  Negative sign indicates outflow of cash.  

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Also,  If we see the trend in Ratios,  all are on increasing trend.  Check following ratios for your references.  Trend in ROE, ROA,  ROCE and interest cover.  And you will observe how this company is fairing well in all parameters. About this ratios,  we will cover separately about the importance of it.  I am not giving this ratios here to spoon feed readers.  Most of the screenshots are presented here.  For remaining,  terms are mentioned,  investors just needs to take efforts to check those trends by either manually calculating or any websites giving readymade data.  

Remember,  Learn to Fish yourself.  That's the key to be successful investor 

Happy Investing 💸💸💸💸💸💸💸