Monday, March 9, 2009

Indian Markets Mar 2009 : Realty Sector - Buying Opportunity

Realty Sector is in no shape to even dream of a decent recovery, what to talk about turn-around. Here is a sector where one cannot even begin to give reason for such a drastic fall. Say what you may, but the fact remains that in this sector it is just not bleeding of excesses but something more sinister that is happening. This sector seems to be paying for some misdeeds and scandalous dealings of the past. And the light at the end of the tunnel is still not visible.

Simply put there is lot of pain left in this sector. Don't be surprised if you find one fine morning that some realty company has folded up and closed shop. With credit crunch tightly in place and demand just not ready to lift its head, realty companies are not likely to hold on to many assets that they call their own today. And if the grapevine is to be believed then God save those realty companies who have yet to repay massive illegal funds raised from underworld goons.

If you are looking for investing in realty companies then do so with utmost care. We wouldn't relish another Satyam blowing up at our face. The charts of realty sector companies show extreme weakness and that is still an understatement.We shall have a closer look at two real estate companies and unearth buying opportunities for investors with a penchant for high risk ventures.

DLF
DLF is trading in the narrowest Bollinger band imaginable and is simply hanging on to a slender thread. If it closes below 134 then we will find this scrip hurtling towards disaster. In that case look for a buy at the level of 66/71.

Unitech
Unitech in the recent past may have been one of the most professionally run real estate companies in India, but the present charts tell a different story. It seems as if the company can be listed as a fly-by-night-operator. It has made such a joke of valuations and fundamental analysis. Every logic has been thrown out of the window when we see the price the company is trading at presently. All this without an apparent scam or swindle !!! If conditions have to improve they have to improve from the present level of 24, otherwise buying opportunity will be available only at 10 for retail investors.