Sell Tata Steel and Sterlite at higher levels of course that is a very short-term strategy because Tata Steel on March 6, it was just below Rs 150, it has already advanced by about more than 100% in 40 calendar days time. Today is the 45th day, so here you expect some kind of correction because it may actually come down some more and after that you actually take positions in that. Similarly for Sterlite, I would wait for some correction to happen before I enter into it.
My reasons for doing so is that if you look at the commodity complex globally both metals well as the other commodities the distance contract of May 2010 other than the soybean complex is attracting 17% to about 27% carry charges – these are too high. So immediately either metals or other commodities may not show a good bounce except soybean, which may correct a bit and then move up further. So I would rather prefer to buy Tata Steel and Sterlite and other metal stocks on decline and not here.
Related posts: