Thursday, April 7, 2011

ITC - Are new highs bullish?

ITC, the largest tobacco company in India, is currently trading at life time highs.
--> In October 2010, the stock made a high of 181.80 which was the highest so far, and this week, stock prices crossed this high, recording 185.7 as the highest price.
--> ITC share price is now at life time highs. By doing so, it has easily gone above its 2008 bull market high while the Nifty remains lower than its 2008 top.

All signs for ITC are upbeat.

So, why do I not like this share, and, what is the way forward.

Why I am bearish on ITC?
I dislike the core business of ITC - selling cigarettes! I feel it is only a matter of time before health conscious society will come strongly upon tobacco manufacturers. In terms of damage to health, the cost of one cigarette is probably many times higher than its retail price. So, how can I be bullish on this business?

What do the charts say?
Bullish. New highs are bullish. While the run up has been sharp in recent weeks, therefore a dip or consolidation is likely, ITC may well outperform.

5 comments:

Sasi Uppuluri said...
This comment has been removed by a blog administrator.
Rushabh Shastri said...

I will have a contra view...Many times happen that something has one so big disadvantage we forget their all advantages...no matter advantage will be the future of that Entity....I personally feel with brand like Ashirwad, Bingo, sunfeast, Wills Lifestyle, vivel, fiama DI WELLS, JOHN PLAYER, kitchen of india...Now ITC is no longer only tobacco company which its name sugget INDIAN TOBBACO COMPANY...it has turned to whole lifestyle based company...I will not surprise if in near future they rebrand themselves as ILC "INDIAN LIFESTYLE COMPANY"

ANAS said...

Respected Sir...
its me again, I have posted a letter , in your name at the
"S2 ANALYTICS PVT. LTD"

request you , to kindly read it .

thank you

Anas Elias Batla
98300-22702
anas_batla10@rediffmail.com

men said...

Thanks for your CRISP VIEWS on the nifty levels, please give your views on individual stocks also in a similar way, this would go a long way.
Sudhin

tushki said...

Hello sir

i have shorted 4000 shares of ITC at an average price of Rs. 188...In view of more downside in the market, will ITC fall the most as it has run up the most??