What are the prospects for YES Bank? Can the stock be bought at current level?

K.P. Singh, Bala, Devarajan Nandagopal

YES Bank (Rs 292): YES Bank has held market participants spell-bound with steep fall from the peak of Rs 502 recorded in July this year. The stock has lost 56 per cent of its value from this high. But investors can take comfort from the fact that this decline has brought the stock to its key long-term support zone between Rs 200 and Rs 240.

The key 61.8 per cent Fibonacci retracement of the rally from the March 2009 trough occurs at this level. The stock has also recorded multiple troughs in this zone, in February and December 2011.

That the stock is reversing from this level means that investors with a greater risk appetite can buy the stock at this point with stop-loss at Rs 200. Those holding the stock can continue to do so with the same stop. Medium-term targets for the stock are at Rs 343 and Rs 417.

Long-term resistance will be at the previous life-time high at Rs 547. That said, inability to move above Rs 340 will mean that the outlook remains negative and the stock can test Rs 200-level again. It is best if investors do not make fresh purchases below Rs 200, since the next support on the long-term chart is at Rs 124.

What is technical view on Hinduja Global Solutions for the medium- and short-term?

R. Nagabhushana Rao

Hinduja Global Solutions (Rs 255): This stock is in an incessant slide since the peak of Rs 603 recorded in October 2009. This slide has pulled the stock below its long-term support at Rs 287. Both the medium- as well as the short-term outlook for the stock is negative.

Unless the stock manages a strong weekly close above Rs 286, the current slide can continue to drag it lower to Rs 170 or Rs 120 over the next twelve months.

Key medium-term resistance for the stock is at Rs 368. Targets on a move above this level are at Rs 410 and Rs 460. Investors with short- to medium-term investment horizon should divest their holdings on a failure to move above Rs 368.

I have shares of Tata Power bought at Rs 90. Please advise on the outlook for this stock.

Sunil L

Tata Power (Rs 70): The long- and medium-term outlooks for Tata Power are currently down.

The stock has declined below the key long-term support at Rs 90, thus paving the way for decline to the October 2008 low at Rs 61. The negative medium-term view will be mitigated only if the stock manages to close above Rs 90 soon.

Failure to do so will accentuate the negative trend. Resistances above Rs 90 are positioned at Rs 103 and Rs 122.

I have Aarti Drugs bought at an average price of Rs 215. What is the outlook for this stock and what would be a good level for selling it?

V.K. Maheshwari

Aarti Drugs (Rs 186): This is a very volatile stock that has been moving in a wild manner between Rs 130 and Rs 240 since this January. Immediate support that you need to watch out for is at Rs 170. It would be best to sell the stock if this level is penetrated since the next support is at Rs 129.

Conversely if the stock manages to hold above Rs 170, it would mean that it can move on to Rs 245 or even Rs 260 over the medium-term.

Can I buy SKS Microfinance at current price?

S. Mani Kandan

SKS Microfinance (Rs 129): SKS Microfinance can look lucrative when compared to the stellar heights the stock had reached in January 2010. But mostly there is a very good reason why the market punishes a stock and pushes the price down.

It is important to know why the stock was beaten down and whether the concerns still exist. Please do your homework on these parameters before venturing to buy a stock.

SKS Microfinance continues to be in the throes of a bear market.

The stock needs to scale Rs 600 before the long-term outlook turns positive for it. It is, however, in an uptrend from the low of Rs 54.4 recorded in June 2012. This rally will reverse only if the stock records a strong close below Rs 90.

Investors holding the stock can continue to do so, as long as it trades above this level. Medium-term resistances will be at Rs 160 and Rs 200.

I have IDFC in my portfolio. Is it advisable to hold it for the long-term?

A.V.V. Surendra

IDFC (Rs 87): According to the charts, the long-term outlook for IDFC turned weak when the stock declined below Rs 90 last month. This is an important long-term support since the stock formed an important trough at this level in January 2012.

The stock had breached the Fibonacci support at Rs 110 earlier in August. Those holding the stock can continue to do so with stop-loss at Rs 75.

But, it would be best to sell on decline below this level since the next long-term target is way below at Rs 44.1. Those wishing to buy the stock should do so only on a firm weekly close above Rs 90.

Medium-term resistances for the stock are at Rs 118 and Rs 143. Long-term ceilings are at Rs 185 and Rs 218.

(This article was published on September 7, 2013)
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