I am using Khoday India as an example. I had got news that this will do well with 8-12% short term up rise (it is around 7% up today). I did not recommend this to the group however. The previous financial year it had booked losses in spite of being a liquor company, which should be quite liquid on cash. Book value swings on the balance sheet also does not seem to be healthy. Are the profits being diverted to other activities etc? I do not know, I need to do further research for that.
But because of these doubts I had on the company's fundamentals, I did not recommend it to you, although technical signals were quite strong.
Just an example to show that I give higher importance to fundamentals than technicals. If fundamentals are strong, future prospect is good and so the current price is attractive, the technical aspect does not matter a lot, profits will come for sure.
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