Please let us know your views on Chennai Petroleum Corporation.
Chennai Petroleum Corporation (Rs 122.3): Chennai Petroleum is slipping lower since April 2010. Successive lower troughs and peaks formed from this peak indicate that the stock is in a strong structural downtrend. It breached the key long-term support at Rs 161 in April and is currently trading well below it.
The nearest support for the stock is at Rs 110. Investors with short- to medium-term perspective can hold the stock with stop just below this level.
But there is a possibility of the stock sliding all the way down to the March 2009 low at Rs 82. This downside will mitigate if the stock manages to clamber above Rs 162.
Medium-term resistances for the stock are at Rs 189 and Rs 233. Key long-term resistance is in the zone around Rs 300.
What are the short-term targets for United Spirits and M&M?
United Spirits (Rs 818.3): United Spirits has been very volatile since it recorded its all-time high at Rs 2,188. The stock plummeted to Rs 425, and then soared to Rs 1,598 only to return to Rs 450 by this January.
The stock appears to have long-term base between Rs 400 and Rs 450 and investors can hold the stock as long as it trades above the lower boundary of this base. But close below Rs 400 can drag the stock to Rs 266 or even lower.
Immediate target for the stock is at Rs 920. Inability to move beyond this level will result in the stock oscillating between Rs 500 and Rs 920 over the months ahead.
If the stock manages to move beyond Rs 920, subsequent targets are Rs 1,063 and Rs 1,210. Crucial long-term resistance will be around Rs 1,600. Long-term view on the stock will turn positive only on a strong close above this level.
Mahindra & Mahindra (Rs 703.6): This stock continues to be in a strong secular uptrend.
Though one leg of this uptrend ended at Rs 826 in November 2010, it is consolidating sideways since then. This sideways move has retraced less than 38.2 per cent of the previous long-term rally underlining the strength in this move.
The current trading band for the stock is between Rs 600 and Rs 900. Investors can hold the stock as long as it holds above the lower boundary. There is a support above that level at Rs 620. The stock is currently attempting to reverse higher from this level. Short-term targets for the stock are Rs 780 and Rs 875. But a strong move above Rs 900 will signal that the long-term uptrend has resumed. Targets in that event would be Rs 1,090.
Please advise me on the short- and long-term view on Dishman Pharma. Can I buy the stock at current level?
Dishman Pharmaceuticals and Chemicals (Rs 67.5): Dishman Pharmaceuticals is meandering at multi-year lows. The stock moved below the March 2009 low of Rs 87 in July 2011, signalling the resumption of its long-term downtrend.
Outlook for the stock will turn positive only if the stock goes on to close above Rs 100. Investors with greater penchant for risk can buy the stock at current level with stop at Rs 33.
Key medium-term resistance for the stock is at Rs 128. If the stock fails to move beyond this level, it will result in the stock moving in a band between Rs 35 and Rs 125 for few more months. Intermediate-term targets on move above Rs 128 are Rs 155 and Rs 185.
The long-term hurdle for the stock is at Rs 277.
Please provide your short- and medium-term analysis on Wire & Wireless India.
Wire & Wireless India (Rs 17.3): Wire & Wireless India is wallowing in wilderness since October 2009. The stock is moving in a narrow band between Rs 5 and Rs 28, far from the olympian height of Rs 140 recorded in January 2007.
Medium-term hurdle for the stock is at Rs 19 and investors with short- to medium-term perspective should watch their backs as long as the stock trades below this level.
Target on a strong close above this level is Rs 28. Investors cannot aspire for any level higher than this over the next couple of years. Medium-term supports for the stock are at Rs 13.5 and Rs 10.5. Investors can hold the stock as long as it trades above the first support.
I would like to know the prospects of investing in NHPC with a short- to medium-term perspective.
NHPC (Rs 18.4): NHPC recorded its life-time low at Rs 17.6 in December last year. A small rally followed that came to a halt at Rs 22.9 in this February.
The stock is sliding lower again since then and is back to its life-time low.
The short-term trend is sideways as the stock is attempting to stabilise in the band between Rs 18 and Rs 20 since last May. But it needs a braveheart to go long at this juncture since both the medium- as well as the long-term trends in the stock are currently down.
Short-term rallies will face resistance at Rs 19.5 and Rs 21. Medium-term trend will turn positive only if the stock goes on to close above Rs 23.
Long-term resistances are at Rs 26 and Rs 31. The more risk-averse investors can buy the stock after it moves above Rs 26.
(Readers can send in their queries, on not more than two companies, to email@example.com. Queries can also be sent by post to: Tech Trail, 859/860 Kasturi Buildings, Anna Salai, Chennai 600002.
We would endeavour to answer as many queries as possible. However, constraints of space will limit the responses featured under this column.)