Please discuss the medium- and long-term outlooks of Wockhardt and BOC India Ltd.
Anil Kumar Ray
Wockhardt (Rs 582.3): This stock is on steroids since the beginning of this calendar. It reversed from the trough at Rs 251 in the first week of January and did not look back thereafter. It has shattered its long-term resistance at Rs 550 and is currently trading at a new life-time high.
It is obvious that long-term up move is in progress over the last two months. But the need for caution arises from the fact that the index is close to its long-term peak. The zone between Rs 550 and Rs 600 is a potential minefield. Strong move above Rs 600 is required to signal that the stock will now go on to Rs 653. Long-term outlook will stay positive as long as the stock trades above Rs 380.
Investors with short- to medium-term view can take some money off the table and hold the rest with stop at Rs 450.
BOC India (Rs 456.5): BOC is yet another stock that has recorded a spectacular rally since the beginning of this calendar and currently trades at a new high.
The stock is up 81 per cent since the beginning of this year.
The support that medium- and short-term investors need to watch out for is at Rs 416.
The uptrend can be expected to continue following a pause if the stock manages to hold above this level in the upcoming months. Upward targets in this scenario are Rs 564 and Rs 680.
That said, the decline below Rs 415 will result in the stock declining to Rs 360.
Long-term investors can hold the stock as long as it trades above this level. Previous peak in January 2011 formed around this level lends further significance to this support level. Subsequent halts can be at Rs 310 and Rs 260.
I am holding Steel Exchange India at Rs 55 over the last one year. I can hold the stock for one more year. What price can I expect in this period?
Steel Exchange India (Rs 67.4): This stock is moving sideways with an upward bias since July 2009. It was struggling with the resistance around Rs 55 over the last couple of years. But the stock was able to move above this level in the ongoing rally, since the beginning of February.
The stock is nearing the key long-term resistance at Rs 77. Investors need to stay cautious around this level.
Investors with short-term horizon should divest part of their holding on inability to move beyond this level. However, a move past this level will take the stock higher to Rs 98 or Rs 119 over the next one year.
Stop-loss for long-term investors can be at Rs 48. Breach of this level can take the stock lower to Rs 33 or Rs 27.
What is the medium-term outlook for Hindalco bought at Rs 154?
Hindalco Industries (Rs 140.3): Hindalco reversed from Rs 111.2 in January and this uptrend took the stock to Rs 165. But the stock was unable to make further headway and is sliding once again. That it faces strong short-term hurdle around this level that also coincides with 38.2 per cent retracement of the down-move from January 2011 peak could have impeded this move.
Investors need to keep watch on this resistance since failure to move above this will result in the stock declining towards the base between Rs 110 and Rs 120 once again. Selling pressure will exacerbate if the stock declines below Rs 110. Next supports are Rs 107 and Rs 68.
If the stock moves beyond Rs 165, rally to Rs 182 or Rs 199 will be possible in the upcoming months.
It is hard to envisage a move beyond Rs 200 in the medium-term.
Please guide me on the long-term prospects of Dishman Pharma?
Dishman Pharmaceuticals & Chemicals (Rs 47.7): This stock is ailing since January 2008 when it recorded the high of Rs 427.
A fresh bout of weakness struck Dishman Pharma in January 2010 and the stock is currently trading 83 per cent below this peak.
It will be a while before the stock is above to dig itself out of this hole. It will face strong near-term resistance in the band between Rs 90 and Rs 100. Move above this level will take the stock higher to Rs 127 or Rs 185.
Long-term outlook will turn positive only if the stock goes on to close above Rs 185. It is highly likely that the stock spends the years ahead vacillating in the band between Rs 35 and Rs 185.
I have bought shares of Reliance Media Works at Rs 220. Should I hold or sell?
Reliance Mediaworks (Rs 84.3): Reliance Mediaworks is in the throes of a long-term bear market.
The stock currently trades 35 per cent below the trough formed in March 2009. Key medium-term hurdle for the stock lies between Rs 130 and Rs 165. Its outlook will continue in doldrums as long as it trades below this hurdle.
Targets on move above this band are Rs 220 and Rs 320. It is hard to envisage a move back to the stock's previous peak.
The stock is currently trading well below your cost price. It would be best to divest your holding in rallies and switch to some other stock.