One of the methods to buy stocks, without going into fundamentals or PE ratios, while looking at opportunities, is to look at two periods - one when the stock prices have run up and second period when the stock prices have corrected.
Stocks that have run up and corrected the least or have actually risen during this period, are the stocks, which look very attractive or maybe in stronger hands. These stocks have good businesses, but have been lower downside.
Considering such two periods - from August 22 '07 - January 8 ’08, where there was a run up in the stocks and the correction from January 9 until January 23 and here is a list of stocks that look reasonable:
Amara Raja, Akruti City, Bank of India and Welspun Gujarat have risen anywhere between 70-140%, but also have risen during the correction anywhere between 4-16%.
There are a second set of stocks and interestingly, the second set of stocks have a whole host of banking stocks that people are buying into. For instance, Indian Bank, Axis Bank, SBI, Bank of Baroda have run up anywhere from 50-80% in the August-January period and have fallen just about 5-6% during the time of correction.
Another host of midcap stocks that look fundamentally good are Everonn, Shriram Trans Fin, Pidilite, Jain Irrigations, Sadbhav Eng, Indiabulls Financials, that have risen anywhere between 40-160%, but have fallen least about 6-7% totally.
So these are the stocks or this is the methodology to be employed to find out which stocks might be fundamentally good and might be the stronger of the lot.
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