Winning Stokes

Like everyday let me begin by saying that the User Interface (UI) of this blog has become worse for any uploads from through a mobile or Tab. Google has removed the earlier user friendly UI version and replaced it with this new monstrous one; which has tormented the bloggers, like me who sometimes use an android device to update the blog. 

Anyway, on last Friday the domestic indices went for further corrections. The BSE Sensex closed at 46,285.77 down 588.59 points (-1.26%), while the NIFTY50 closed at 13,634.60 down by a whooping 182.95 point (-1.32%). The Nifty is likely to continue its downtrend and touch 13170 on the down side before we could look for some pullback. Today is the budget day and hence the indices might rise during the initial hours, which should be used to come out of long positions or book profits in recommended shorts. But don't create fresh Nifty shorts, as of now.

As per Current Nifty PE Ratio Chart of 29 January, 2021; Nifty PE Ratio is 36.57, Nifty 50 PB Ratio is 3.86 , Nifty Dividend Yield Ratio is 1.16. This calls for further downside on the market. 

Historically, the domestic bourses had crashed when the P/E crossed 28. With the current dispensation sitting in Delhi, under the leadership of an eccentric tyrant named Narendra Modi, I don't forsee much positive GDP moves or improvements in the EPS of Nifty in the coming days. So, this travel of Nifty to South is expected to continue. 

#Adani Ports and Special Economic Ltd (Rs.509. 50) touched Rs.507.35 intraday, on last Friday. Book some profits and hold the rest with a SL at Rs.523.

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#The shares of 3i Infotech Ltd had hit yet another LC, closing at Rs.6.65, on last Friday. 

Recently, the company said it has entered into definitive agreements to sell its software products business to the funds advised by Apax Partners for Rs.1,000 crore (current Market cap: Rs.1075 crore, This included the market valuation of both of its business segments: Services and Software Products). 

The transaction, the company said will help pay out the Rs. 800 crore debt. The company had amassed such huge amount of debt due to misguided acquisitions that eventually took the company into corporate debt restructuring between 2012 and 2016.

3i Infotech Software Products posted a revenue of Rs. 442.98 crore in FY20, which is 38.81% of the company's consolidated revenue. The next downward targets are Rs.5.60 and Rs.3.30. 

Hence, if you have still not exited kindly exit, ASAP, as the transaction, is subject to shareholder approval and relevant regulatory approvals and therefore looks a little fishy to me at the CMP.

#The shares of a Vodafone Idea Ltd touched an intraday low of Rs.10.95 before closing at at Rs. 11.20, on last Friday. According to a report published in ET, the net worth of the loss-making Vodafone Idea Cellular (formerly Idea Cellular Ltd) is a negative ₹26,699.8 crore. The telecom company has never posted a profit since its formation through the merger of Vodafone India and Idea Cellular in August 2018, and has been rapidly losing subscribers. In such a situation there is no point in holding the scrip at such a high price, especially when the P/E of Nifty is at 36.57.

#The shares of Non-banking financial company Manappuram Finance Ltd closed at Rs.156.10 on last Friday, before dipping to Rs.154. 20, intraday. The sell call was given at Rs.60.30. Book profits and exit the scrip.

#Sell the shares of ICICI Prudential Life insurance Ltd near the CMP of Rs.482.35, for short term target of Rs.444. With the introduction of Covid-19 vaccine, definitely the fear factor, one of the driving force for the insurance businesses will come down. SL: Rs.488.