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B. KrishnakumarB. Krishnakumar

On the basis of recent exit polls, do you feel that index will take a heavy beating if the NDA does not secure a majority? In such an event, will the Sensex breach the 5000 mark? What is your take on Andhra Bank & ONGC? — Nagesh Shenoy

We wish to reiterate that the long-term outlook for Indian stocks is bullish. A drop below 5000 for the Sensex cannot be ruled out. Even if the 5000-mark is breached, it would not alter the positive outlook. We would keep our readers informed if there is a change in our view. Besides, the outlook for the key indices and index stocks would be featured in the "Market Watch" page of Investment World every Sunday.

Andhra Bank (Rs 61.2): As observed last week, the stock appears to have potential for upside from the present levels. A move to the Rs 82-Rs 85 range appears likely. The near-term trend, however, appears bearish. A drop to the Rs 50-52 range appears likely. The positive outlook for the stock would be negated only if the stock drops below Rs 48. Remain invested with a stop-loss at Rs 57.

ONGC (Rs 840): The stock was covered in this column last week. There is no change in the view featured last week. A move past Rs 1000 would indicate that the stock has completed the downward correction at the latest low of Rs 665. Remain invested with a stop-loss at Rs 810. Partial profit taking may be considered on the evidence of weakness at Rs 950-Rs 960 levels. A drop below Rs 810 would warrant significant dilution of holdings.

What is the price target and resistance level for Orchid Chemicals and Syndicate Bank? — Sapna Gupta

Orchid Chemicals (Rs 220.7): The near-term outlook appears positive. The stock could face resistance at the Rs 245-250 range. A break above this range could help the stock move to the next target zone at Rs 275-280. Investors may hold on with a stop-loss at Rs 205. Conservative investors may take partial profits when the stock moves to Rs 240. Risk-seeking traders may contemplate long positions on a close above Rs 243, with a stop-loss at Rs 230. A drop below Rs 210 would warrant dilution of holdings.

Syndicate Bank (Rs 49.7): The stock appears to be in a corrective phase to the recent uptrend. After a brief upmove, the price is likely to decline to the 40-43 range. A move past Rs 59 would impart positive momentum and would push the stock to higher levels. Long-term investors may remain invested with a stop-loss at Rs 39. If the stop-loss gets triggered, fresh long positions may be considered on a subsequent move past Rs 55. Short-term traders may take profits on price upmoves and contemplate re-entry on evidence of support at about the Rs 40 mark.

What are the short- and long-term prospects of Shipping Corporation of India and BHEL? — Sadiq Pasha

Shipping Corporation (Rs 118.4): From a short-term perspective, the recent decline does not appear complete as yet. After hitting a high of Rs 200 in January, the stock has been on a downtrend. A drop to the Rs 98-100 range is not ruled out. Only a close above Rs 156 would indicate that the downtrend is complete. Conservative investors may look for opportunities to reduce exposure. Fresh buying may be avoided for the time being. From a long-term perspective, the stock is likely to see one more round of upside. A test of the recent high of Rs 200 appears likely. It could take a while for the stock to resume the uptrend. The downtrend has to be completed first and the share price needs to stabilise for a while before a new uptrend can begin.

BHEL (Rs 585.4): The near-term trend appears weak. The stock could drop to the crucial support at Rs 490-500. A breach of this level would have negative implications. Conservative investors may remain invested with a stop-loss at Rs 550 for a portion of their holding. Fresh buying may be considered on the evidence of support at about Rs 500. From a long-term perspective, a meaningful trend would emerge only if the stock breaks out of the trading range that it is currently confined to. A move past Rs 710 would impart positive trend while a drop below Rs 490 would have bearish implications.

I have sizable investments in Ranbaxy. I would like to know whether it would be worthwhile to convert about 10 per cant of the holdings into Merck, Abbott or Wyeth Lederle at the current price levels so that there could be greater capital appreciation and dividend? — Srivatsan

Ranbaxy (Rs 1061.4): The outlook for the stock is positive. A move to the Rs 1250-1300 range appears likely. There is no reason to dilute holdings at the present levels. However, for the sake of diversification of risk, there is nothing wrong in investing a portion of the holding in Ranbaxy into other stocks. Based on chart patterns, we suggest GlaxoSmithKline Pharma. It is, however, advisable to consult a professional portfolio or fund manager before taking any decision.

What is the outlook for Tata Teleservices bought at Rs 12? — K.Arun Kumar & P. Saravanan & P. Navaneethan

Tata Teleservices (Rs 19): There appears to limited downside risk for the stock from present levels. Only a drop below Rs 16 would be a cause of concern and a close below Rs 14 would negate the positive outlook. Remain invested with a stop-loss at Rs 16 for a portion of the holding. For the balance, a stop-loss may be placed at Rs 13. Fresh buying may be considered with a stop-loss at Rs 16.9, once the stock close above Rs 22.

Should I sell or hold State Bank of India bought at Rs 550? — Dharmambal Narayanan

SBI (Rs 642.3): The near-term outlook for the stock does not appear positive. A drop to the Rs 520-530 range appears likely. Part of the holdings may be sold at the present levels. For the rest a stop-loss may be placed at Rs 600. Fresh buying may be considered later.

I purchased Ceat at Rs 72 per share. How long should I hold it? — B.B. Behera & Krishna

Ceat (Rs 38.6): There are no signs to support a significant uptrend in the stock. Though the share price could see a sideways movement with an upward bias, the chances of a rally to your entry price appears remote in the near term. The immediate resistance is placed at the Rs 47-50 range. Remain invested with a stop-loss at Rs 34 and use price moves towards the resistance zone to reduce exposures. Alternatively, a trailing stop-loss may be used in the event of a near-term rally.

I purchased Ingersoll Rand at Rs 290. Should I sell or hold? What is the stop-loss level? — Krishna

Ingersoll Rand (Rs 224): There appears to be limited downside risk. Only a drop below Rs 185 would negate the positive outlook. A drop below this level would result in the completion of a bearish "Head and Shoulder" and would have negative implications. A move past Rs 270 would result in the resumption of the uptrend. Remain invested with a stop-loss at Rs 190.

What is the outlook of GTL purchased at Rs 120 and SAIL at Rs 42? — Vishal Ranka & Maneesh Gupta

GTL (Rs 73.7): There still appears to be downside risk in the stock in the near term. A drop to the Rs 45-50 level appears likely. Conservative investors, as well as those who are holding a profitable position, may dilute their holdings at present levels. Others may hold on with a stop-loss at Rs 69 and may use intermittent price upmoves to reduce exposures.

SAIL (Rs 35): The near-term outlook does not appear positive. A drop to the Rs 29-30 range appears likely. Remain invested with a stop-loss at Rs 34. Evidence of support at the Rs 27-28 range may be used to take fresh exposures in limited quantity. There is no compelling reason to take fresh exposures at present levels. Look for opportunities to reduce exposures.

I am a long-term investor in McDowell. Interest appears to be building up in this stock after a long time. What is the outlook? — S.V. Mathu

McDowell (Rs 57.5): There were signs of a revival in market interest in this stock. The price moved up on the back of rising trading volumes. This rally, however, turned out to be short-lived. The recent chart pattern indicates the possibility of the resumption of the downtrend. A drop to the Rs 45-46 range appears likely. There is no reason to take fresh exposures at prevailing price. Existing holders may remain invested with a stop loss at Rs 54.

Based on fundamentals, especially with the approaching product patent regime from January 2005, MNC pharma stocks such as Glaxo, Pfizer, Aventis and Wyeth could attract investor interest. What is the outlook? — Tushar Joshi

Of the stocks listed by you, Glaxo and Wyeth appear attractive from a technical perspective.

Glaxo (Rs 667.1): Glaxo has broken out of the trading range a few days ago. The near-term trend appears positive and a move to the Rs 750-800 range appears likely. Long-term investors may contemplate exposures in Glaxo with a stop-loss at Rs 540. A drop below Rs 540 would warrant dilution of holdings as the trend would then turn weak.

Wyeth (Rs 451.2): The long-term outlook for the stock, too, appears positive. In the near term, however, the share price could drop to the Rs 360-380 range. Investors may wait for the expected downtrend to be completed, before taking fresh exposures. Those holding the stock may have a stop-loss at Rs 410 for a portion of the holdings. If the stop-loss gets triggered, fresh buying may be considered on the evidence of support around Rs 360. A move past Rs 510 would indicate that the stock has resumed its uptrend.

(The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. Opinion and price targets are based on the Elliott Wave Analysis. The stoploss level provided with the recommendation is important. The original view would stand negated if the stop loss level is breached. There is a risk of loss in trading)

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.

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