Exit Nagarjuna Fertilisers, says Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that one can exit Nagarjuna Fertilisers and Chemicals above Rs 36-40 and deploy money in relatively better stocks.

Bhambwani told CNBC-TV18, "The way Nagarjuna Fertilisers has fallen, the overhead supply itself becomes a major hurdle for the bulls to overcome and unless the bulls can keep this stock above an Rs 36 to Rs 40 band, I don’t see how it can withstand the supply of paper that will come in at higher levels. As people trapped at the levels above are also selling out at breakeven costs or levels where profits are more palatable as compare to what they are now.”

He further added, “Selling near the Rs 36 to Rs 40 range and even booking a massive loss would be the most prudent thing to do from technical analyst perspective because anything below Rs 26 levels on a basis would actually fracture the long term outlook of this stock and then turn it bearish. So it may not actually fall too much below Rs 26 levels but the timeframe of the recovery and consolidation will be so prolonged, that you will not be deploying your capital very wisely by staying on with this counter. As best, you can expect anything between Rs 36 to Rs 40 levels and exit from there, and deploy this money in relatively better stocks, market out performance with very high relative strength comparative viz the Nifty, say an HDFC Bank or possibly something in the ENP segment where your returns are likely to be much higher and you can actually re-coupe your losses over the next 4-6 quarters timeframe."

Disclosure: Analyst doesn't hold the above stock.