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Balaji Telefilms spikes up to Rs. 180


Balaji Telefilms has spiked up to Rs. 180. In my last update, I mentioned that it has moved fast to Rs. 160, and that I would sell 25% of my holdings at 175.

I have sold part of my holding but I will not act on this price hike. Balaji’s results are to be announced on Wednesday (16th) and I believe someone knows something and has driven the price up. While I don’t have any such information, it is possible that:

a) the results are good, and therefore the price will go EVEN higher.
b) the results are so-so, and someone is trying to make us believe it’ll be good by driving the price high. After the results, the stock will slow down.

Which of the above is it? Time will tell, but I don’t know any way to differentiate the two. What I can suggest is to stay with stock for now, wait for the results and then make any decision to quit or exit.

The volumes are over 10 lakh shares today. The average volume in the last few days was about 100,000 shares, so the price is up on massive volumes. The last time I reported this stock, the volumes were around 10-15 lakhs.

Note: the above image will change as the days go on.

I would suggest you wait for the results before taking any action. Don’t book profits on a RISE. Book them on a fall. Meaning, if Balaji falls to 160, sell it. If it stays above 160 hold it. That way you cover your downside (only Rs. 20 or about 12%) but the stock could take you higher.

Note: I recommended Balaji Telefilms on Aug 26, 2006 at Rs. 118, and reviewed it to a target of Rs. 175 within a year. This target has now been reached.


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