Please give your opinion about Alok Industries and Gujarat NRE Coke.

Prashant

Alok Industries (Rs 11.5): Alok Industries took yet another sharp dive in August that took the stock to its long-term support at Rs 10. The stock is attempting to consolidate in the band between Rs 10 and Rs 13.5 over the last two months.

This move is, however, not strong and does not mean that a base has been built.

Up-moves in the month ahead would face resistance at Rs 16 and Rs 20. These levels need to be surpassed before the medium-term view turns positive.

Investors wanting to buy the stock can do so on close above Rs 20. Subsequent targets are Rs 25 and Rs 34.

Fresh purchases should however be avoided if the stock goes on to close below Rs 10.

Gujarat NRE Coke (Rs 18.5): Gujarat NRE Coke is also at its long-term support around Rs 18. The stock reversed higher from this level in November 2006 and again in March 2009.

The brave-hearts can buy the stock at these levels with stop at Rs 14.5 for short-term trading. It could move up to Rs 28 or Rs 32 in the months ahead.

That said the medium-term outlook for the stock will improve only if it closes above Rs 47.

Failure to move above this level will result in the stock vacillating in the range between Rs 15 and Rs 47 over the medium-term. Targets above Rs 47 are Rs 57 and Rs 66.

Please advise me on the medium and long-term prospects of IRB Infrastructure purchased at Rs 182. Can I average by purchasing more?

Rajiv

IRB Infrastructure Developers (Rs 121.1): IRB Infrastructure is also in a severe long-term downtrend since the August 2010 peak.

The recovery in the first two months of this calendar could not sustain and the stock recorded yet another multi-year low in May.

It is, however, not certain if the stock has formed a sustainable bottom at Rs 100, therefore we can not advise fresh purchases at these levels.

But you can hold the stock with stop loss at Rs 95. Yet another rebound from the Rs 100 level could provide the averaging opportunity.

Key medium-term resistances for the stock are at Rs 184 and Rs 210. The outlook for this period will improve only if the stock moves above Rs 210. Else sideways move between Rs 100 and Rs 200 can ensue.

Targets on move above Rs 210 are Rs 230 and then Rs 315.

What is your advice regarding medium and long-term outlook of Balrampur Chini Mills. Can the stock be bought at the current level?

Anil

Balrampur Chini Mills (Rs 64.3): Balrampur Chini is a very volatile stock given to large swings over the long-term. It has moved in a broad range between Rs 30 and Rs 170 since 2004.

Since the stock is reversing higher from the lower end of this long-term trading band, this could be the right time for investors to buy in to this stock with stop-loss at Rs 32.

The stock faces key medium-term resistance at Rs 85. Investors with a medium-term perspective should consider buying the stock only on a strong move beyond this level. Subsequent targets are Rs 100 and Rs 117.

The stock has long-term ceiling in the zone between Rs 170 and Rs 200. Investors should therefore stay on their guard to jump out in time as the stock nears this region.

I have bought shares of Suzlon at the average price of Rs 16. Please let me know the long-term outlook for the stock.

Bhargav

Suzlon Energy (Rs 15.5): There isn’t much happening in Suzlon Energy counter since this June; the stock is meandering sideways between Rs 15 and Rs 19. Though the stock is trying to form a base around the psychological Rs 15 mark, the rallies from this level are not very effective and are unable to take the stock higher. Strong weekly close above Rs 34 will be the first indication that the short-term trend is reversing higher.

Inability to move above this level will keep the stock in the range between Rs 15 and Rs 33.

Investors who do not wish to lock in their money in a stagnant stock can wait for a close above Rs 34 before purchasing it. Upper targets will then be at Rs 66 and Rs 97.

Long-term view for Suzlon Energy will turn positive only on close above Rs 146.

Please let me know the long-term prospects of BASF.

S.D. Pai

BASF India (Rs 675.3): The long-term trend in BASF India continues to be up. The correction that began in this stock from the December 2010 peak retraced only half the gains made in the previous leg of the up-move.

The stock has been consolidating in a trading band between Rs 420 and Rs 720 since then.

Long-term investors can use declines to the zone between Rs 375 and Rs 442 to buy the stock with stop at Rs 370.

The stock will however face severe hurdle at Rs 720. Investors with short to medium-term perspective can exit the stock at this level.

Since the stock is already close to this level, short-term investors can wait for strong breach of this level before making fresh purchases. Long-term target on strong break above Rs 770 is Rs 978.

(This article was published on November 10, 2012)
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