JSW Steel - Buy on rumor , sell on Fact !!

The Nifty is unable to sustain beyond 5100 which fact is suggestive of topping out. Today's close below 5000 would suggest immediate support at 4940 and a close below this would indicate further weakness.

Today's hot news was the 10% stake sale by JSW Steel to the 6th largest steel company in the world -Japanese Steel maker JFE.

The scrip immediately hit my radar since we can once again prove that prices run ahead of fundamentals. The price of this stock was rising for the past few days from near Rs 650 level on Nov 4 to today's high of Rs 1039/-.



Woops, a technical analyst tracking this stock would have gained most of the rise, even though not aware of the deal, while a fundamental analyst/ investor would only today come to know of a 'good news' !!!

Perhaps at this juncture one should remember the market saying - "Buy on Rumor , Sell on the Fact" -

Fundamental Investors - if you have missed this rise , wait for a correction before jumping in ! The news are good but the timing for purchase is wrong !! (Did I hear someone say it is bad to time the market????)

I presume you can get the stock below Rs 800/- in days to come !

Happy watching !

CA Rajiv D Khatlawala
ValueTrade Academy Pvt Ltd.