RESPONSE TO READER'S QUERY: @ANON 23/9/11; WELSPUN CORP.

On the TECHNICALS, the Scrip is absolutely in oversold territory and a technical bounce can be expected in the short-term. However in the present overall Market scenario, the bounce-back may not last too long and one can expect the Scrip to settle around 109-115 range for the short to medium term. In case Market sentiment improves, one can expect a more durable bounce back wherein the first resistance level on the upside is at 129 and then 134 followed by 146 levels. Confirmed uptrend only if it trades above 154 levels consistently.

FUNDAMENTALLY, the Scrip is in a sentiment downswing more than anything else, if I may put it that way, as is the entire Capital Goods and allied space, as we all know. I mean, fundamentally there is no reason for the Scrip to be trading below Book Value, even though admittedly, the last Quarter has been disappointing and the largish debt is a bit of a concern. But the robust order-book and the relatively softer raw material input costs should see the Scrip recover in the long term. The trigger for these Scrips will be the confirmation of the Reversal of the Interest Rate regime which the Markets will start factoring in a few months from now provided the current European default crisis and the US double dip fears blow away quickly.

All said and done, I feel that the Scrip can be bought for the long term,in small lots starting CMP 115 and on all dips including fresh lows which might happen if the Markets capitulate. Predicting and trying to catch the bottom would be fruitless since the Scrip could go anywhere in case of Market panic, as we all know.