Stock pick - IDFC

The whole purpose of trading in a market is to take advantage of its inefficiency. This is where many traders get confused. When we use the term trading it means making use of the inefficiency that might be existing in the markets. As traders one cannot be emotional about the stand one is taking. If we find our stand to be wrong we should reverse it instead of becoming adamant. The markets are what they are, prices are what they are - nobody can say it is correct or incorrect. If in our calculations it appears that the moves are overdone on either side we take an opposite position. It is as simple as that. However if we discover the prices are not behaving as per our anticipation we take it on the chin and move on.

If one analyses deeply we recommend stocks which are not in the uptrend atleast in short term. We perform rigorous calculations to identify stocks where we believe there would be some gains to be had notwithstanding the larger trend of classical technical analysis. When we find such stocks we recommend them with adequate risk management.

One such stock we have identified is IDFC. The stock has been on downward spiral for medium term. Now our statistical measures show we are in a zone which should see the stock providing a bounce. We recommend a buy in the range 75-80 with a stop at 67. We should see a bounce to about 93 levels and if the market sustains the stock may also touch its breakdown levels of 102-105. However 93 is our conservative estimate.