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B. Krishnakumar

I have position in Arvind Mills at Rs 69. After the recent decline, is it good to hold on this share for medium- term investment? — Tom

Arvind Mills (Rs 46.3): There appears a downside risk from current levels. A drop to the Rs 35-38 level appears likely. Existing holders could remain invested with a stop-loss at Rs 43. Evidence of support at the Rs 35-38 range could be used to take fresh exposures. In the near term, the stock may move up to the Rs 51-52 range. The decline to the Rs 35-38 range is likely to follow after the completion of this rally. This, however, is likely to be a relief rally and could be used to reduce exposures. If the stop loss is hit, fresh buying may be considered once stock moves past the resistance level of Rs 54.

I hold shares of Birla Corp bought in the primary market at Rs 71. Should I hold it or sell? — Abhishek Porwal

Birla Corp (Rs 48.3): A weak trend is likely to prevail in the near term. The stock, however, is likely to recover to the Rs 58-60 range after the completion of the expected down move. Having held on from the level of Rs 71, it would be worthwhile to wait for the short-term rally to reduce exposures. A stop loss at Rs 41 may be placed for a portion of the holdings.

I am holding Syndicate bank bought at par in the IPO about four years ago. Is partial selling advisable or should I continue holding on for further appreciation? — Shamoli Samant and K.L. Joseph

Syndicate Bank (Rs 34.5): The near-term trend appears positive. A move to the Rs 39-40 range appears likely. Existing holders may remain invested with a stop loss at Rs 32. Investors need to be alert to take at least partial profit once the stock moves to Rs 39-40. Risk-averse investors could use a trailing stop to take partial profits once the stock moves to Rs 39-40.

What is the outlook for Rane Brake Linings bought at Rs 607 (cum bonus)? — Sandeep

Rane Brake (Rs 189.3): It would take quite some time and effort for the stock to reach your purchase price of Rs 300 (ex-bonus). It would be safer to reduce exposure by booking losses on price upmove. Depending on your risk profile, a portion of the holding may be sold once the stock moves towards the Rs 235-240 range. For the moment, a stop-loss may be placed at Rs 175 for a portion of your holding.

I bought SAIL at Rs 51 and Union Bank of India at Rs 53.20. What is the outlook for these stocks? — S. Kalyanaraman

SAIL (Rs 44.3): The stock is in a major downward corrective phase since mid-August 2003. This correction does not appear complete as yet. A drop below Rs 37 would confirm the weak outlook and could pave way for a decline to the Rs 30-32 range. Existing holders may remain invested with a stop loss at Rs 40 at least for a portion of their holdings. A move past Rs 46 could be used to take partial profits.

Union Bank (Rs 50.2): The stock could seek higher levels in the near term. This, however, would be valid only of the stock remains above Rs 44. A close above Rs 53 would have positive implications and could lead to a rally to the Rs 58-60 range. Remain invested with a stop loss at Rs 44.

Kindly advice if I can invest in Sundram Fasteners at prevailing levels. Also give me the prospects for Aftek Infosys. — S.U. Shankar.

Sundram Fasteners (Rs 97.8): The stock is ruling close to its bearish trigger level of Rs 95 that was mentioned a couple of weeks ago. A breach of this level would negate the earlier positive view and could push the stock to the 74-75 range. It would be better to stay away from this stock at the moment. Buying may be considered once there is evidence of the resumption of the earlier uptrend.

Aftek Infosys (Rs 70.6): The near-term outlook does not appear positive. A drop to the Rs 58-60 range appears likely. Technically, there is no reason to take equity exposures in the stock at the moment.

Is it advisable to buy Bharati Tele-Ventures at the prevailing price with a holding period of one year? — Malathi & V. Kirubalani

Bharti Tele (Rs 139.8): There is inadequate price history to arrive at a slightly long-term outlook for the stock. From a short-term trading perspective, long positions may be considered with a stop loss at Rs 120 and a target price of Rs 150. Based on available price data, we are unable to provide a long-term recommendation from a technical analysis perspective.

I bought MRPL at Rs 64. Do you advise me to hold or sell? I do not mind holding this stock for longer time frame. — Venkata Rao

MRPL (Rs 53.5): There appears to be limited downside risk from the current level. The stock appears to have completed the decline that commenced at Rs 69 on January 9. A move past Rs 60 would confirm this outlook. On the other hand, a drop below Rs 48 would result in the resumption of the downtrend. Remain invested with a stop loss for a portion of the holding at Rs 48. If the stop loss is hit, fresh buying may be considered once the stock closes above Rs 63.

I bought G.E.Shipping at Rs 157. Even after announcing good quarterly performance, the stock has not moved up. I am also having shares of Electrosteel Casting at Rs 400. What is outlook and when can I exit? — Suresh Kumar

G.E.Shipping (Rs 153.1): The outlook for the stock remains positive. A move to the Rs 170-175 range appears likely. Only a drop below Rs 130 would negate the positive outlook. Remain invested with a stop loss at Rs 134. A move past Rs 161 could be used to take limited equity exposures by risk seeking investors. Stop-loss for all long positions may be placed at Rs 134.

Electrosteel Castings (Rs 297): The outlook does not appear positive. It would be better to look for opportunities to reduce exposure in the stock. A drop to the Rs 250-260 range appears likely. Remain invested with a stop-loss for a portion of the holding at Rs 285.

I would like to know the outlook for IDBI as it has slid from the levels of around Rs 75. I hold the stock at an average price of Rs 70. Should I book loss now and exit or hold on for the reversal of the trend? — Mukundan

IDBI (Rs 69.3): The near-term outlook appears positive and a move to the Rs 79-80 range appears likely. Remain invested with a stop loss at Rs 59. A trailing stop loss could be used once the stock moves past the Rs 80 mark. There is no reason to book losses in a hurry. It would be worthwhile to hold on.

I hold BEML at Rs 155. Please suggest the exit price. — G. Sivaramakrishnan

BEML (Rs 180.1): The stock has limited downside risk from current levels. The long- term trend remains bullish and a move to the Rs 260-265 range appears likely. Only a drop below Rs 167 would result in the continuation of the recent downtrend. Remain invested with a stop loss at Rs 165. A move past Rs 190 could be used to take limited long positions with a close stop loss in palace.

I hold Gujarat Gas bought at Rs 610. Should I hold or exit? — M. Sunil

Gujarat Gas (Rs 485.4): The stock has been on a downtrend in the last couple of months. The downtrend does not appear complete as yet. Considering that you have been holding it from Rs 610, there is no point selling it now. There is possibility of a rally to the Rs 540-550 range after the completion of the ongoing decline. Remain invested and reduce exposures at least partially once the stock moves closer to the Rs 540-550 range.

I purchased Geometric Software at Rs 300 and Cadila Health Care at Rs 250 through the initial public offering in the year 2000. Please suggest whether I should hold or sell these shares. — Manasa Hegde

Geometric Software (Rs 459): The stock has turned weak after moving close to the earlier high of Rs 622. In the process, a bearish double-top pattern has been completed. The near-term trend appears weak and a drop to the Rs 380-390 range is not ruled out. A drop below Rs 430 would confirm the bearish outlook. Existing holders could remain with a stop loss at Rs 430. Partial profit booking may be considered on price upmoves.

Cadila Health Care (Rs 366.8): There appears to be limited downside risk in the stock. Only a drop below Rs 340 would have negative implications and could result in a further drop to the Rs 280-290 range. At the moment, a move past Rs 435 would impart bullishness in the stock. Existing holders may remain invested with a stop loss at Rs 340.

Readers can send in their queries, on not more than two companies, to

techtrail@thehindu.co.in

Queries can also be sent by post to:

Tech Trail, 859/860 Kasturi Buildings, Anna Salai, Chennnai 600 002

We would endeavour to answer as many queries as possible. However, constraints of space will limit the responses featured under this column.

(Note: The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. Analysis and price targets are based on the Elliott Wave Analysis. There is a risk of loss in trading)

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