The first thing which an investor must look at is the condition of the market. At present, the market trend is up since December 1998 and with the weekly momentum indicators already in an overbought state, we are soon likely to see a good correction. However, a few sectors have bottomed out and investors can look out for some select stocks in these sectors.

After looking at the market, the next thing which the investor must look at is the sector/group. Look out for a good group in which many stocks have bottomed out after forming a good base and a few have gone into a major uptrend.

Make a list of stocks from the favourable group that have bullish patterns but are now in the trading ranges. Write down the price that each would need tobreakout.

Narrow down the list and discard stocks which have overhead resistances nearby. Prune the list further by checking the relative strength of these stocks. Ensure that the new list contains only selective stocks with a bullish relative strength.

Look out breakouts for these stocks at the breakout levels.

If the volume if favourable on the breakout, take up long positions close to the breakout. However if the stocks gaps up, pick up only a small quantity and the rest quantity must be picked up on a pull back towards this breakout level.

Investors who follow these steps will find themselves on the right side of the market most of the time and these few hints will help them make money regularly in the market. Today I will take a look at the sector, cement products. Many stocks in this sector have bottomed out and have been exhibiting a bullish relative strength. Though there are not many stocks in this sector, investors will find a few stocks which are quite interesting.

EtrenitEverest

Etrenit Everest went into a major uptrend in July after the stock closed above its earlier intermediate top of 48. The stock attained a high of 68 recently and pulled back towards the strong support level in the last week giving investors an opportunity to add to their long positions. The stock has again started to move up and higher levels will be seen in the stock. Investors must continue to hold on to their long positions in the stock. As the stock has been in a strong major downtrend since 1995, it has a good overhead resistance at 80, 100, 120 and 180. As there are many overhead resistances, the upside momentum for the stock is not likely to be very fast.

Roofit Inds

Roofit bottomed out in March 1999 and went into a major uptrend by crossing its earlier intermediate top with a rise in volume. The relative strength line for the stock is bullish, suggesting that the stock is outperforming the sensex. The breakout of the stock was with a rise in volume which is a very bullishsign and investors must hold on to their long positions that they have picked up. As the stock is the leader in this sector, it will be the last stock to drop into a major downtrend. Thus investors must stay invested in the stock. The intermediate trend of the stock is also up and more long positions in the stock must be added only after the next intermediate downtrend.

Malabar Build

Malabar Build has also gone in a major uptrend recently but the 30 WMA for the stock has flattened out and the relative strength line for the stock is bearish suggesting that it is under performing the indices. The trading volume for the stock is thin and investors must stay away from the stock. Thus, even though the major trend of the stock is up, the other requirements for a bullish outlook are not there.

Indian Hume Pipe

Indian Hume Pipe has been facing a very severe major downtrend since 1994 and has been exhibiting a very weak relative strength. The major trend of the stock is down and the tradingvolume is very thin. The stock has not bottomed out and will require some more time to do so. Investors must stay away from the stock for the time being.

Hydrabad Inds

Hydrabad Inds has been in a free fall since 1994 and even though the major trend of the stock is up, the relative strength line for the stock is bearish and investors must stay away from the stock. The 30WMA has flattened out, but the trading volume of the stock is very thin and there is no great hurry to turn bullish on the stock. The stock is one of the laggers in this sector and investors must try and concentrate only in the strong stocks within any sector that they pick.