I am holding shares of Sterlite Industries purchased at Rs 184 and Hindustan Zinc at Rs 246. Should I hold these shares or sell?
Sterlite Industries (Rs 97.3): Sterlite Industries has been in an unrelenting decline since January 2010.
It breached its key long-term support at Rs 115 in November last year. Investors ought to have exited the stock at that point.
The stock is, however, attempting to stabilise in the region around Rs 100 since last December.
Investors still holding the stock can therefore shift their stop-loss to Rs 80 and hold the stock. Breach of this level can be quite disastrous for the stock price.
Rallies over the next few months will face resistance at Rs 145. Investors can consider switching out of the stock on failure to move beyond this level. Subsequent target would be at Rs 160 and Rs 178. These levels need to be surpassed before the stock can reach its long-term ceiling between Rs 230 and Rs 270.
Hindustan Zinc (Rs 135.4): Hindustan Zinc announced bonus issue in the ratio of 1:1 in 2011. If the adjusted price is considered, you have not really lost money on this investment. The stock continues in a long-term uptrend since it has retraced only 38.2 per cent of the rally from the October 2008 low. Investors can hold the stock with stop-loss at Rs 100. This support lies below the lower boundary of the long-term trading range between Rs 105 and Rs 155 that has been confining the stock since April 2011.
The stock can also be accumulated in the band between Rs 105 and Rs 115 with the same stop-loss. Subsequent supports are at Rs 90 and Rs 73.
The stock will continue to face resistance between Rs 150 and Rs 155. Target on a sharp move beyond Rs 155 is Rs 186.
Can I buy Titan Industries at current level with the time horizon of two months?
Titan Industries (Rs 295.6): Titan is one of the dazzlers of 2012, with year to date gain of 81 per cent. It was facing a stiff challenge in the zone between Rs 240 and Rs 250. But it overcame this level hurdle in September and is trading well above it.
Those of you who were lucky enough to buy the stock at lower levels can hang on to it as long as it trades above Rs 250.
Only the very agile investors can venture to buy the stock at current level since the stock has been racing up without a correction since the first week of September.
The stock has immediate target at Rs 317. But the zone around Rs 300 is a psychological resistance that can cause a retraction to Rs 245 or Rs 210. Risk-averse investors can wait for decline to these levels before purchasing the stock.
Target above Rs 317 is Rs 357.
What are the targets for YES Bank and J&K Bank from 3-6 month perspective?
J.H. Krishna Murthy
YES Bank (Rs 415.5): In our review of YES Bank in July this year, we had advised investors to accumulate the stock in declines with stop at Rs 285. We had also indicated that the stock was moving in a long-term trading range between Rs 230 and Rs 390.
The stock broke out of the upper boundary of this trading range in October.
The zone between Rs 390 and Rs 400 will now convert in to a strong support and investors wishing to buy the stock with short to medium-term perspective can do so with stop at Rs 390. Stop-loss for long-term investors should be at Rs 230.
Medium-term targets for the stock are Rs 460 and Rs 474. J&K Bank (Rs 1320.2): This bank is speeding up a vertical slope since the beginning of October and is up 52 per cent in this period.
If we extrapolate the wave from the December 2011 trough, we get the first target at Rs 1,252 and the next target at Rs 1,471. Since the stock is nearing the second target, it would be advisable to tread with caution in this counter.
There could be considerable resistance around the Rs 1,500 level. But strong move beyond this hurdle can take the stock to Rs 1,823.
Stop-loss for short-term investors can be at Rs 1,220 while the stop for long-term investors is farther down at Rs 950.
This is in reference to your last review of Moser Baer. You had indicated a few months back that the stock would touch Rs 5 if it broke Rs 17. It has happened very accurately. I would like to know if I can start accumulating the stock or should I wait for even lower levels.
Moser Baer India (Rs 5.3): There is no valid reason why investors should buy this stock. It is in a severe long-term down-trend that has dragged it down from 2008 peak of Rs 345 to Rs 5 now.
The way the stock price has been decimated reflects the deteriorating business prospects for this company.
Though there can be short-term speculative spurts in the stock, long-term investors would do well to give this counter a wide berth.
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