ZINC-ED on VALENTINES

The stock market saying goes like this, “Follow the trend”. But what if you are invested in Hindustan Zinc. SENSEX (even after the last few days fall) was up 5% from Dec 06, while HZNC was down 39%, a relative underperformance of 44%. Well this is nothing short of crisis for ZINC bulls. Even GOLD outperformed ZINC by more than 40% for the same period.
What happened? What does market have against ZINC lovers? And how could we at [bold]OR-PHE-US[/bold] identify a negative stock in an otherwise positive market? The ZINC fractal said it all. And could have avoided you getting ZINC-ED. What may not have helped you is the data, the mergers, the smelters and all those loads of information. Markets do not work on Information extrapolation. If you bought ZINC because of the Zinifex-Umicore merger, thinking the largest ZINC producer in the world (Reuters-12 Dec) might give you some portfolio efficiency…we are sorry…you might have to wait. Moreover, the other cliché, “HZNC is always a VALUE BUY”, might give some solace. Another 100 or 200 points, HZNC at 500 or 400 should be more attractive, to accumulate, to the otherwise ‘in dumps’ portfolio.
The first time we covered ZINC was on Nov 1, 2006 with a coverage on international spot prices and local ZINC majors Hindustan Zinc and Sterlite Industries. This was a special forecast for us, as we caught ZINC in an uptrend and saw prices extending gains before topping. The top for us was about 10% away from RECO prices. We were looking at a psychological 1000, HZNC topped at 1020. And then the anticipated dip started. After falling 39%, first to near our sighted targets at 660 and now to 600, the stock still seems away from a real bottom. We will keep you posted for any trading supports that come in. While this time around, try avoid getting ZINC-ED, atleast not on valentines.