But the fresh spell of selling could also be linked to the expectation of a poor performance in first half of the current year. The expected poor performance again can be blamed on declining cement prices. An expected pick up in demand did not occur and even in the post-monsoon period the downward spiral in cement prices continues unabated. At the same time raw material prices have not shown a major fall. In such a scenario, players like ACC suffer the most as they are less competitive in comparison with players like Gujarat Ambuja which due to its operational efficiency manage to resist the storm to some extent.

The outlook for the cement sector is bleak. Demand is not showing the desired results. The present situation will prevail unless the construction sector shows someactivity. But here too any optimism would be unfair. As such, coupled with a overcapacity problem, manufacturers will have no option but to reduce their selling prices, at least in the short run. And the stock market is just reflecting the situation.

With the recent fall, the technical position of the stock has also weakened further. The stock had strong support level at Rs 907. Breach of this level is an extremely bearish warning. Since the next support levels for the stock are far below from the current level, the slide is expected to continue. The next strong support level for the stock is at Rs 605. Whatever rally takes place in the interim, it will be of the nature of technical correction. Even in the case of a sharp reversal, ACC will not be a good choice in comparison with Gujarat Ambuja.

Blue Dart: On time

After a long period, the Blue Dart counter managed to attract some buyers. And as a result of this buying, the stock has recently touched a 52-week high of Rs 46. This buying isattributed to an improved performance. For the second quarter during 1998-99, the company has recorded a net profit of Rs 2.37 crore, showing an impressive jump of 235 per cent over the corresponding period figure of Rs 0.66 crore. During the first quarter of this year, the net profit stood at Rs 0.51 crore.

The improved performance was mainly on account of improved efficiency that is being reflected in its improved margins. Revenues stood at Rs 42.92 crore, down 3.79 per cent from Rs 44.61 crore in the corresponding period in the previous year. Margins improved on account of a sharp reduction in expenditure. As a result, operating profit margins have improved from less than 1 per cent to 8 per cent. While these results truly support the recent jump in share price, to maintain the uptrend the company will have to keep posting such results which would not be an easy task.

As for this, the current euphoria is likely to die soon unless some speculative elements on the counter are active. A jump in volumeseem to be suggesting this. Even after more than 100 per cent jump from its all time low of Rs 17, the stock gets a price discounting of less than 5. As the courier sector is considered highly competitive which is expected to increase further, the market is unlikely to improve its discounting for these stocks.

Elbee Express, another courier service stock has also followed the trend of Blue Dart. The stock has also doubled from its all-time low. But Skypak Services has not shown any improvement from its all time low of Rs 2. In the case of Blue Dart and Elbee, the rally appears impressive, but for the original shareholders, the situation does not make a major difference. All time high of Rs 220 in both cases, which was very close to their respective issue price, is still very far. In fact, the original shareholders of Blue Dart as well as Elbee may use this opportunity as an exit route.