Please let me know the technical prospects of IRB Infrastructure. My time horizon is two years. Can I purchase now?

Pradeep Motaparthy

IRB Infrastructure Development (Rs 151.15): IRB Infrastructure and Development formed the trough at Rs 100 in May and is attempting to reverse higher from this level. Investors with a long-term perspective can accumulate the stock between Rs 100 and Rs 150, with stop-loss at Rs 100.

Medium-term hurdles for the stock will be at Rs 180 and Rs 210. Inability to move beyond these hurdles will result in the stock trading in the range between Rs 100 and Rs 200. Therefore, investors with short- to medium-term perspective should exit the stock on reversal from these levels.

Long-term outlook will turn positive only on close above Rs 232. Next target will be the stock’s life-time high at Rs 313.

I am holding shares of Tata Teleservices (Maharastra) at an average price of Rs 36. Should I hold or sell?

P Radhakrishanan

Tata Teleservices (Rs 12.08): You have purchased Tata Teleservices close to its 2009 peak at Rs 42. The stock is in a structural downtrend since January 2008. This move intensified in 2009 and the stock is currently trading below its 2008 trough, implying that the long-term outlook remains negative for this stock.

Investors can draw some hope from the fact that the stock is attempting to hold at the psychological support at Rs 10. Reversal from these levels can take the stock to Rs 22 or Rs 30 over the medium-term where investors can exit the stock.

You should, therefore, hold the stock as long as it trades above Rs 10. Decline below this level will be the cue to switch from this stock. Long-term outlook will turn positive only on a close above Rs 33. Subsequent resistances will be at Rs 39 and Rs 45.

Please share your technical view on V Guard bought at Rs 194.

Kaushalendra Pratap Singh

V Guard (Rs 409.40): This stock is in a strong structural uptrend. Though the stock is correcting after recording its life-time high at Rs 457 in August, the long-term trend continues to be up for this stock. A weekly close below Rs 340 is needed to negate this view. Investors with long-term horizon can, therefore, hold the stock with stop at Rs 335.

Long-term supports below this level will be at Rs 300 and Rs 263.

Short-term supports for the stock are available at Rs 370 and Rs 355. Short-term investors can hold with higher stop-loss at Rs 370. The stock could continue to face resistance at Rs 460 in the days ahead. Target on break above Rs 460 is Rs 540.

What is your advise on the medium- and long-term out look on ACC?

Can those be bought at the current level? Anil

ACC (Rs 1,381.05): The trends along all time-frames, short, medium and long, are currently up in ACC. This is one of the high-beta stocks that give massive losses in market declines. The stock lost 70 per cent of its value in the 2008 crash but it has recouped all its losses and currently trades close to a new high.

One leg of the structural uptrend that began in October 2008 appears to have ended at Rs 1,421 in February this year. But the correction that followed pulled the stock exactly 30 per cent down from its peak denoting a strong bullish undercurrent. Though the stock could find it hard to move beyond Rs 1,450 just yet, target on a break beyond this level is Rs 1,755.

But the stock could spend some time in the band between Rs 1,000 and Rs 1,450 before breaking out higher. Since the stock is nearing the upper boundary of this range, it would be best to wait for a close above Rs 1,450 before buying the stock. Stop-loss for those holding the stock can be at Rs 1,000. The stock can also be accumulated in declines with the same stop.

Supports on a break below Rs 1,000 are Rs 903 and Rs 781.

I am holding Castrol bought at an average price of Rs 280. Can I continue to hold these shares with a one-year perspective?

Sushil Santra

Castrol (Rs 298.25): Castrol India has strong long-term resistance in the band between Rs 280 and Rs 300. The stock reversed lower from this region in August 2010 and again in July 2011. The stock is once more stuck at this hurdle since this August. Investors should, therefore, stay wary as long as the stock does not record a strong close beyond Rs 320.

That said, the stock appears to be consolidating over the past month before breaking higher. Short-term investors can, therefore, hold the stock with stop at Rs 240. Target on break above Rs 320 is Rs 350 and Rs 397.

Key long-term support band is in the zone between Rs 190 and Rs 200. This can be the stop-loss for long-term investors.

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(This article was published on September 22, 2012)
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