I have shares of LIC Housing Finance bought at Rs 278. What are the prospects in the short-term?

Moses Santhiyagu

LIC Housing Finance (Rs 282.4): After consistently taking support at its significant long-term base level at Rs 240, the stock started to move higher in November 2012. However, the stock encountered key long-term resistance at around Rs 300, from which it had previously peaked out in October 2010, following a short-term uptrend. It is currently undergoing a corrective decline.

As long as the stock trades above Rs 271, its short-term uptrend will stay in place. Traders with short-term perspective can hold the stock with stop-loss at Rs 271. An upward reversal will take the stock higher to Rs 290 and Rs 300 where profits can be booked. Only an emphatic breakthrough of the long-term resistance at Rs 300 will push the stock higher to Rs 310 and to Rs 320 in the medium-term.

On the other hand, a strong fall below Rs 271 will mar the stock's short-term uptrend and pull it down to Rs 255-260 band or even further down to Rs 240 in the medium-term.

Please let me know the prospects of Cairn India.

Gunjan Bharadwaj

Cairn India (Rs 323.4): The uptrend that commenced in the stock from its August 2011 low of Rs 250 came to a half after it registered an all-time high at Rs 400 in February 2012. Since then, the stock has been in an intermediate-term downtrend. Medium- as well as short-term trends for the stock are down. Nevertheless, the stock has significant long-term buttress in the zone between Rs 300 and Rs 310.

As long as this support holds, the stock can consolidate sideways in a broad trading range between Rs 300 and Rs 350. An emphatic rally above Rs 350 will alter the stock's intermediate-term downtrend and take it northwards to Rs 370 and then to Rs 400 in the long-term. On the down side, a strong weekly close below Rs 300 will reinforce bearish momentum and pull the stock down to Rs 280 and to Rs 250.

I have shares of Andhra Bank purchased at Rs 129. Please advise whether to hold or to sell.

MP Krishnaiah

Andhra Bank (Rs 116.2): Following a medium-term uptrend from the stock's September 2012 low of Rs 90, the stock encountered resistance at its key long-term hurdle at Rs 130. The stock has retraced 50 per cent Fibonacci retracement of its prior uptrend and is currently testing support at Rs 110.

Short-term perspective traders can hold the stock as long as it trades above Rs 110, a key support and where its 200-day moving average is poised, with same stop-loss. An up move from this support will take the stock higher to Rs 123 and then to Rs 130. A decisive breakthrough of Rs 130 is required to take the stock further higher to Rs 140 and to Rs 150 in the medium-term. Failure to breakthrough will pull the stock lower once again.

Conversely, a strong decline below Rs 110 will mitigate the stock's medium-term uptrend and drag it down to Rs 100 initially and then to Rs 90 in the medium-term.

I bought Colgate shares at Rs 1,500 and want to hold for 6 months. Now it seems to be in a downtrend. What are the prospects and targets?

J.H. Krishna Murthy

Colgate-Palmolive India (Rs 1,408.3): You appear to have bought the stock in its tail end of its uptrend that commenced in January 2012 low of Rs 932. This uptrend breached its key resistance at Rs 1,250 in late October 2012 and the stock accelerated to mark its lifetime high at Rs 1,580 on January 1.

Your assumption is correct; the stock has been in a short-term downtrend since its lifetime high. Nevertheless, it is just hovering above a key immediate support at Rs 1,390. It would be safe to exit from the stock as soon as possible, if it bounces up from the aforementioned support. Immediate resistances are positioned at Rs 1,482 and Rs 1,525.

Only a decisive rally above Rs 1,540 will take the stock to Rs 1,600. But, a strong fall below Rs 1390 will reinforce bearish momentum and pull the stock down to Rs 1,320 and to Rs 1,250 in the short- to medium-term.

As long as key support at Rs 1,250 holds, the stock's intermediate-term uptrend will remain in place. A fall below this level will mar the uptrend and pull the stock down to Rs 1,170 and Rs 1,100 in the forthcoming months.

What is your advise regarding medium- and long-term outlook on Reliance Infrastructure? Can it be bought at the current level?

Anil

Reliance Infrastructure (Rs 538.6): Since taking support at Rs 440, the stock's long-term base level, Reliance Infrastructure has been in a broad sideways consolidation between Rs 440 and Rs 575. After testing the upper boundary early this month, the stock is in minor correction.

Only a conclusive break out of the upper boundary will be the cue for fresh buying. In that scenario, the stock can trend upward to Rs 660 and to Rs 700 in the medium- to long-term. Inability to break will confine the stock trading in the aforesaid sideways band. Immediate supports are at Rs 490 and Rs 440. Strong decline below Rs 440 can pull the stock down to Rs 370 in the long-term.

I bought SML Isuzu at Rs 465. Kindly let me know your views about this counter and future prospects.

Jayalakshmi

SML Isuzu (Rs 428): The stock's medium-term uptrend that started from its September 2012 low of Rs 360 has come to a halt encountering resistance at around Rs 480 in December. Since then, the stock has been in a short-term downtrend. Recently, the stock has breached a key support at Rs 440 and is trending towards next support at Rs 400.

We advice exit from the stock in rallies. An emphatic downfall below Rs 400 will pull the stock down to Rs 370, a significant long-term support. Immediate resistances for the stock are pegged at Rs 440 and Rs 480.

I purchased shares of Raj TV Network at Rs 82 a year ago, and am still holding them. Please elaborate long-term perspective of the stock.

B. Esakkimuthu Mani

Raj Television Network (Rs 220.5): The stock was on a strong uptrend in 2012. After encountering resistance at around Rs 250 in October 2012, it turned volatile and fluctuating between Rs 135 and Rs 240. As you are sitting in good profits in the stock, it is advisable to take profits off the table at this juncture. Only a strong breakthrough of the key resistance band between Rs 240 and Rs 250 will take the stock to Rs 275 in the medium-term.

On the other hand, decisive fall below its key long-term support at Rs 180 will pull the stock down to Rs 135 and then to Rs 100 in the long-term.

(This article was published on January 26, 2013)
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