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B. Krishnakumar

What is the outlook Padmalaya Telefilms (I have purchased its shares at Rs 110)? Please advise me whether to sell or hold. Shall I enter HFCL at 9? — Paddu

Padmalaya Telefilms (Rs 69): The near-term outlook does not appear positive. A test of the Rs 52-55 range appears likely. A move past Rs 80 would, however, impart bullishness and negate the bearish outlook. Going by recent chart patterns, the possibility of the stock moving towards your purchase price of Rs 110, appears remote. A drop below Rs 62 would be an early indicator of the likely slide to the target zone of Rs 52-55. Remain invested with a stop-loss at Rs 62 for a portion of your holdings, and at Rs 58 for the rest. Fresh exposures may be considered if the stock hits the stop-loss, and subsequently breaks above Rs 80.

HFCL (Rs 8.9): There is no reason to commit funds in this stock. It would be safer to wait for proper entry triggers before taking a trading/investment decision. No such signal emanates from the charts now. The recent price pattern points to the continuation of the recent downward trend, which could push the stock below Rs 7.

I am holding Gujarat NRE Coke at an average price of Rs 45. What are your views on this stock? — Joshi Gopal & Praveen Jain, B.Pratibha & S.M.Murugan

Gujarat NRE Coke (Rs 67.3): There appears to be scope for appreciation even though the stock has run up sharply in recent weeks. A move to the Rs 85-90 range appears likely. Remain invested with a stop-loss at Rs 58. Fresh buying may be considered on a move past Rs 70, with a stop-loss Rs 61.

What is the outlook for Dr.Reddy's Labs? — Sekhar

Dr.Reddy's Labs (Rs 775): Though there is still downside risk, the stock appears to be in the final stages of the ongoing downward trend. After a test of the Rs 690-700 range, the stock is likely to stage a recovery. Investors with a penchant for risk may remain invested with a stop-loss at Rs 680. The rest may have the stop-loss at a higher level of Rs 730. A move past Rs 850 would be a positive trigger and warrant initiation of long positions in small lots, with a suitable stop-loss in place.

Would it be advisable to buy Balrampur Chini even after the recent spurt in price? — Chandar

Balrampur Chini (Rs 436): The stock faces a crucial resistance level in the Rs 450-452 range. Though the trend is bullish, it would be better to wait for a breakout from this resistance zone before taking long positions. Buying may be considered on a move past Rs 452, with a close stop-loss in place. It is better to buy the budgeted quantity in a phased manner at different price levels. On a break past Rs 452, a portion of the budgeted quantity may be purchased, and further exposures may be considered if there is evidence of a continuation of the upward trend.

I bought Sathavahana Ispat at Rs 38. How does the stock look on the charts? Please mention the resistance and support level. — Praveen Jain

Sathavahana Ispat (Rs 29.2): The outlook for the stock does not appear positive. The price band of Rs 35-38 is likely to be a stiff resistance level, if the price moves up. The support level is in the Rs 23-25 range. Remain invested with a stop-loss at Rs 27, and reduce exposures by capitalising on any increase in the price. Only a break above Rs 39 would impart a positive bias

I have Rain Calcining at Rs 16.3, and Morpen Lab at Rs 8. Will I benefit by holding these shares? — Mahendran, S.Shanmugam & Dhiraj

Rain Calcining (Rs 15.4): The near-term trend appears positive and the stock could move to the Rs 17-18 range. A move past Rs 19.5 would impart further impetus. Remain invested with a stop-loss at Rs 13.7. A trailing stop-loss may be employed in the event of a rally to the Rs 17-18 range. Partial profit taking may be considered on weakness at the Rs 18-19 range.

Morepen Lab (Rs 6.7): Based on the price movement, it is difficult to arrive at any conclusion of the future trend. We are unable to offer any suggestion on the stock.

I purchased Century Textiles at Rs 117. Shall I hold or switch? I also bought Nirma at an average price of Rs 360.What are the prospects and should I hold or book losses? — R. Bhatia & C. Venkatakrishnan

Century Textiles (Rs 116.6): Hold with a stop-loss at Rs 105, as the stock has upside potential. A move to the Rs 128-130 range appears likely in the near term. Stop-loss may be pushed closer to the prevailing price, once the stock moves closer to the Rs 128-130 range. A drop below Rs 105 would have negative implications and could push the stock to the Rs 80-85 range.

Nirma (Rs 288.3): After a near-term decline, the share price is likely to seek higher levels. A move above Rs 320 would have positive implications and the stock could move to the Rs 345-350 range. A drop below the crucial support range of Rs 262-265 would have negative implications. Hold with a stop-loss at Rs 262. Try to reduce exposures on signs of weakness at the Rs 345-350 range.

What are the prospects of Jindal Iron & Steel bought at Rs 247? Shall I hold the shares of IDBI bought at Rs 61? — A. Kumar

Jindal Iron (Rs 270.3): Even after the recent upward trend, it has upside potential. Though the stock could rule weak in the near-term, the weekly price chart indicates the possibility of a move past Rs 300. After the completion of the short-term weakness, the stock could move towards the Rs 290-300 range. The outlook for the stock has been covered in the "Focus of the Week" column, featured elsewhere on this page.

IDBI (Rs 70.3): The stock appears to have completed an upward move at Rs 73.2 last week. The scope for significant rise appears minimal in the near-term. The share price is likely to drop to the Rs 58-60 range. A move past Rs 78 would impart a positive trend. Hold with a stop-loss at Rs 65 for at least a portion of the holding. Fresh buying may be considered on a move past Rs 78, with a suitable stop-loss.

I bought Canara Bank at Rs 35. I plan to switch to Tata Steel and Reliance. It is advisable to do so? — Sanjay Mahadik

Canara Bank (Rs 128.6): The stock has been oscillating in a tight trading range in recent weeks. A breakout from this range with an upward bias appears likely. Taking into account your entry price and the outlook for Reliance and Tata Steel, it would be better to stick to Canara Bank. Reliance and Tata Steel may seek lower levels in the near term. These two stocks would be more attractive portfolio candidates at lower levels. The outlook for these two stocks would be regularly featured on this page and we would highlight the emergence of a sustained upward move.

Is it a good time to buy pharma stocks, specifically Cipla, Novartis, Aventis, Glenmark & Glaxo? — Ambrish Gandhi

The outlook for the stocks in your buy list appears weak. After the anticipated drop, a significant upward move is likely. It would be better to wait for price dips to take exposures. On an average, these stocks could decline between 8-10 per cent. We would come up with a suitable recommendation when there are indications that suggest the emergence of a bullish trend. — B. Krishnakumar

What is the outlook for SAIL, bought at Rs 37.8, and TVS Motor (Rs 79)? — Dwaraknath

SAIL (Rs 40.7): The stock has moved in line with the view outlined in the edition dated July 25, 2004. The stock moved up to the target zone of Rs 42-43, and has subsequently declined. The near-term outlook appears weak; a fall to the Rs 34-35 range appears likely. A close below Rs 30 would be a bearish trigger.

The long-term outlook, however, appears positive. A close above the key resistance of Rs 43 would confirm the bullish outlook for the long term. Investors, who have in-the-money positions may contemplate profit booking on at least a part of their holdings; they may contemplate re-entry, if the stock seeks support at the Rs 30-32 band. Risk-seeking investors may hold with a stop-loss at Rs 31.

TVS Motor (Rs 73.5): As anticipated earlier (edition dated June 30), the stock dropped to the Rs 55-58 range before staging a recovery. The downward move, however, does not appear to be complete. At least a test of the Rs 52-55 range appears likely before a sustainable upward trend materialises. Investors who have entered the stock at lower levels may hold with a stop-loss at Rs 68. Short-term investors may place the stop-loss at Rs 70.5.

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.

(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 stop-loss 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)

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