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B. Krishnakumar

I am holding Southern Iron & Steel (at Rs 6) and ACC (at Rs 198). Please advise whether to hold or exit.— M. Elango

Southern Iron (Rs 5.6): The stock has been on a steady decline from the Rs 13-14 range. There appears to be relatively low downside risk from current levels. Only a break below Rs 5 would impart weakness. A close above Rs 7 would impart some strength. Remain invested with a stop loss at Rs 5.

ACC (Rs 214.2): The stock appears to be in an uptrend. A move to Rs 245-250 appears likely in the near term. Only a close below Rs 190 would be a cause of concern. This could pave the way for a drop to the Rs 160-165 range. Remain invested with a stop loss at Rs 190. A move above Rs 222 could be used to take fresh long positions with a stop loss at Rs 205.

I bought Hikal at Rs 399 (ex-bonus) and iGate Global at Rs 232. What is the outlook for the two stocks? — Murali Mohan

Hikal (Rs 326.5): The stock has declined steadily in the recent weeks. Only a move above Rs 410 would impart positive trend in the stock. Long-term investors could remain invested as the overall trend is still positive. The stock could move to the Rs 450-460 range on the completion of the ongoing downtrend. Conservative investors may place a stop loss at Rs 300. Risk-seeking investors could have a stop loss at Rs 260.

iGate Global (Rs 186.2): The recent downtrend in the stock appears complete. A recovery appears to be on the cards. A close above Rs 238 would confirm that the downtrend is complete and that the stock is in an upward trend. Remain invested with a stop loss at Rs 162.

Can I buy Arvind Mills at current levels with a two-year investment horizon? We have purchased Tata Teleservices at Rs 11. What is the outlook? — Yashpal Arya

Arvind Mills (Rs 45.7): The overall outlook for the stock is bullish. From a two-year time horizon, the stock appears to be a good option. Long-term investors may take exposures in small lots at current levels as there is still no indication of the completion of the ongoing short-term downtrend. Exposures may be enhanced on price upmoves. A close above Rs 60 would have positive implications and could push the stock back into a bull orbit. Existing holders could have a stop loss at Rs 38.

Tata Teleservices (Rs 12.8): The stock is stuck in a narrow trading range. Only a break above Rs 14 would impart strength. On the upside, there is strong resistance at the Rs 15-16 range. However, the long-term trend is bullish and the scrip could eventually move towards the Rs 23-25 range. Remain invested with a stop loss at Rs 11.

What are the prospects of Federal Bank bought at Rs 165 and Shree Cements at Rs 102? — T.S. Reddy & Kutty Krishnan

Federal Bank (Rs 181.3): As mentioned last week, the overall trend is positive. A move to the Rs 190-195 range appears likely. Only a drop below Rs 165 would negate the positive outlook. Remain invested with a stop loss at Rs 144. There is no need to sell this stock in a hurry as there is an upside potential of about 25 per cent from current levels.

Shree Cements (Rs 92.9): A move to the Rs 110-115 range appears likely in the near- term. Only a close below Rs 85 would negate this view. Remain invested with a stop loss at Rs 85. A trailing stop loss could be used once the stock moves above Rs 110.

I hold shares in India Nippon Electricals at an average price of about Rs 180 and Coates of India at Rs 209. Can I hold and what is the outlook for these shares? — M. Dinesh Mallya

India Nippon (Rs 349.5): The overall outlook for the stock is positive. It could move to the Rs 440-450 range in twelve to fifteen months. There is no need to sell this stock now. Only a drop below Rs 290 would warrant dilution of holdings.

Coates of India (Rs 108.6): The recent price pattern does not provide clear clues about the overall outlook for the stock. Taking into account the cost of acquiring the shares, there is no point selling the exposure at current levels. Holdings could be diluted if the stock were to close below Rs 100.

What is the outlook for UTI Bank? — Jyothi, K. Peter

UTI Bank (Rs 74.8): The overall outlook for the stock is positive. Investors with a long-term perspective could remain invested as there is significant upside potential from current levels. However, in the short-term, a drop to the Rs 60-63 range is not ruled out. This, however, does not negate the long-term positive outlook. Very conservative investors could remain invested with a stop loss at Rs 70.

I bought Alembic at Rs 386 and IPCA Labs at Rs 533. Both the stock prices have fallen very sharply. What is the outlook of these stocks and what should be my strategy? — A. Jayakrishnan

Alembic (Rs 339.5): The stock has been on a downtrend in the recent weeks. A move to the Rs 410-420 range appears likely once the downtrend gets completed. There is no need to sell the shares at current levels. Remain invested with a stop loss at Rs 300. A trailing stop loss could be used once the price moves past your break-even price of Rs 386.

IPCA Labs (Rs 490): Though the overall outlook for the stock is positive, a drop below Rs 430 would have negative implications and could push the stock to further lows of the Rs 350-370 range. Remain invested with a stop loss at Rs 450.

Though it would be worthwhile to hold on to the shares, conservative investors may have a much tighter stop loss at Rs 470. If this stop loss gets triggered, fresh buying may be considered on a subsequent price move past Rs 550.

I have 100 shares each in Blue Dart at Rs 115 and Mastek at Rs 225. Should I hold or exit? — Suresh Kumar Yadav

Blue Dart (Rs 107.5): The overall outlook remains positive. The stock could seek higher levels on the completion of the recent downward correction. Remain invested with a stop loss at Rs 95 as there is a possibility of a move to the Rs 120-125 range shortly.

Mastek (Rs 210.8): The overall outlook does not appear too bullish. The stock is ruling close to the crucial support level at Rs 190. A close above Rs 225 could push the stock to higher levels of Rs 240-250. Remain invested with a stop loss at Rs 190.

What is the outlook for Canara Bank and Maruti Udyog? — Prashanth. S

Canara Bank (Rs 134.4): The stock has ruled weak in the recent days. The downtrend does not appear complete. The stock could drop to the Rs 115-120 range if it drops below Rs 126. Remain invested with a stop loss at Rs 126.

Maruti Udyog (Rs 322.3): There is insufficient price history to arrive at a meaningful long-term trend. But the stock appears headed towards higher levels of the Rs 345-350 range in the near term. Remain invested with a stop loss at Rs 300.

I bought HPCL at Rs 356 and ONGC at Rs 660. Should I hold or sell? — R.Vijayakumari

HPCL (Rs 329.2): The share price has been on a steady decline in recent weeks. The uncertainty pertaining to the disinvestment of government stake is the key factor driving the share price. There is still no evidence of the emergence of a bullish trend. The stock could seek higher levels of the Rs 350-360 range once the ongoing correction gets over. Remain invested with a stop loss at Rs 310. A trailing stop loss, for a portion of the holding, may be employed in the event of an uptrend.

ONGC (Rs 597.3): The recent downtrend appears complete. The stock is likely to stage a recovery towards the Rs 660-670 range. Remain invested with a stop loss at Rs 560. Taking into account the long-term trend, there appears to be no reason to sell this stock in a hurry. Long-term holders are likely to reap significant benefits as the overall trend is still bullish.

Readers can send in their queries, on not more than two companies, to

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We would endeavour to answer as many queries as possible. However, constraints of space will limit the responses featured under this column.

(Note: The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. Analysis and price targets are based on the Elliott Wave Analysis. There is a risk of loss in trading)

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