Sell JP Associates & Karnataka Bank; go long in GMDC: Jain

In CNBC-TV18's popular show Bull's Eye, Pankaj Jain of Sunteck Wealthmax shares his trading strategies for the day.

One may sell Jaiprakash Associates. The stock is now trading below its resistance zone of Rs 59 to Rs 62. What we are seeing is that, the stock was showing consistent weakness throughout last trading session and especially during last half an hour of trade the stock was showing additional weakness and it is a highly leveraged company. We are seeing that high companies with high debt are facing severe selling pressure. We believe the stock is sprinting towards next support zone of Rs 51 to 53, these were January 2012 lows which was seen in the stock.
One may sell Karnataka Bank. We have seen fall in this stock in Friday's trading session. The stock fell more than 15 percent in a single trading session and next support zone for this stock is somewhere between Rs 96 and Rs 101. The find of fall we have seen on Friday, the stock trading well below its all relevant moving averages, we believe that negative momentum would continue in today’s trading session.
One may sell Sintex Industries. This stock is going out of Future and Options list soon and it is again part of that deadly combo where very high debt and low growth in companies balance sheet and this combo we are seeing that most of these combination kind of companies are facing severe heat. The stock is already trading at multi year lows and is heading towards its bottom of Rs 35-36 which the stock formed after the Lehman crisis.
One may go long term in Gujarat Mineral Development Corporation (GMDC). GMDC was part of very few stocks which were showing strength in last trading session and the stock closed above its 20 daily moving average (DMA) with stronger volumes and we believe the kind of positive momentum the stock was showing in closing session would continue in today’s trading session. GMDC is one of the better managed and efficient public sector undertaking (PSU) mining company. Quarter four results were not all that exciting, we believe that the next two-three quarter results could be much better.