Please express your views on Crompton Greaves and SAIL. Can I buy more of these stocks at current levels?

N. Raman

Crompton Greaves (Rs 94): Crompton Greaves went into a steep decline in 2011 hitting the low of Rs 107 in December 2011. But unlike the rest of the market, this stock could not recover in 2012 and went on to record successively lower peaks and troughs last calendar as well.

This long-term downtrend continues in the stock and it moved on to new multi-year low in February this year. Next long-term support is in the zone between Rs 60 and Rs 70. Investors with a higher risk appetite can buy the stock on further fall with stop-loss at Rs 55.

Any rally in the months ahead will face resistance at Rs 140 and Rs 167. Long-term view will turn positive only on a close above Rs 190.

SAIL (Rs 71.5): Steel Authority of India was sharply impacted in the 2011 crash with the stock losing 63 per cent from its peak at Rs 258. Though the decline halted around Rs 70, the stock has not been able to reverse convincingly from this level. The pullback in 2012 halted at Rs 115, well below the long-term trend deciding level of Rs 145. This implies that the long-term outlook for the stock remains under a cloud.

The stock could continue to face resistance around Rs 116 in the medium-term. Inability to clear this level will pull the stock lower to Rs 55 and Rs 60 in the months ahead. Investors with greater risk taking ability can buy the stock in declines with stop at Rs 50. The stock is unlikely to breach the long-term support at this level.

That said fresh purchases should be avoided on this counter should the stock decline below Rs 50. Key long-term hurdles will be at Rs 134 and Rs 145.

Please give me the medium- and long-term advise on Central Bank of India.

T. Jayakumar

Central Bank of India (Rs 70.3): This stock has been moving in a trading range between Rs 63 and Rs 110 since July 2012. This range can confine the stock over the medium-term and the stock could continue to vacillate between these boundaries for a few more months.

Investors with medium-term horizon can, therefore, buy the stock in declines with stop at Rs 60. Medium-term targets would be Rs 93 and Rs 112.

The long-term view on Central Bank of India continues to be down. This view will be altered only if the stock manages a close above the resistance zone between Rs 112 and Rs 120. Investors with long-term perspective should, therefore, buy the stock only on a strong close above Rs 120. Subsequent targets are Rs 137 and Rs 155.

I bought Reliance Broadcast Network at Rs 53. Please let me know the prospects.

Sreeram

Reliance Broadcast Network (Rs 27.2): This stock is in a strong structural downtrend. A fresh leg of this downtrend resumed from the peak of Rs 121 in November 2010 and it is currently trading at a new lifetime low. It would be hard to identify the next support once the stock begins sliding lower.

Investors should, therefore, divest their holdings on a close below Rs 25. An alternate strategy would be to exit the position at current level and consider reinvestment once the stock closes above Rs 60. Subsequent targets for the stock are Rs 85 and Rs 121.

Key long-term resistance that investors need to watch out for is at Rs 134. Inability to move above this level will keep the stock vacillating in the range between Rs 35 and Rs 135.

Please give your technical analysis on Micro Technologies.

Raminder Singh

Micro Technologies (Rs 38.5): Micro Technologies is also in a prolonged downtrend and the stock is currently trading at four-year low. Since there are no signs of a turnaround in the stock yet, it is possible that the stock continues to decline moving towards the 2009 low at Rs 26.7. Long-term investors can hold the stock as long as it trades above this level.

Medium-term resistances will be at Rs 64 and Rs 84. The zone around Rs 84 is also a key long-term hurdle for the stock. Long-term targets on move above Rs 84 are Rs 110 and Rs 129.

I hold shares of Lovable Lingerie purchased at Rs 360. Where are the support levels for this stock?

Jagannadham

Lovable Lingerie (Rs 239.4): Lovable Lingerie has been in a downtrend since the peak of Rs 637 recorded in September 2007. A fresh leg of this downtrend began in July 2012 that dragged the stock below its December 2011 low of Rs 278.

There are no signs of reversal in the stock. Since the stock has limited trading history, it is hard to identify the level at which the decline can halt. You can divest your holding on any further decline in the stock and consider reinvesting once the stock move above Rs 300 again.

Medium-term resistances will be at Rs 293, Rs 336 and Rs 381. Long-term resistance for the stock is in the zone between Rs 380 and Rs 400. This zone needs to be surpassed to indicate that the stock is on the road to long-term recovery.

(This article was published on March 2, 2013)
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