The Hindu Business Line : Query corner

The price has moved closer to the resistance zone of Rs 63-Rs 66. The momentum and the rise in the volume over the past few days indicate that the price could move past this resistance zone and seek higher levels of Rs 72-Rs 75. Remain invested with a stop loss at Rs 52. A trailing stop loss may be employed on a sustained upward move beyond Rs 70. Partial profit taking may be considered if the stock faces resistance at Rs 72-Rs 75 range.

What is your outlook on Nalco? — Subur Basha Shaikh

Nalco (Rs 147.4): The price has been confined to narrow trading range over the past few weeks. The outlook does not appear positive; the stock is likely to drop to Rs 118-Rs 120 range in the near-term. Shareholders may remain invested with a stop loss at Rs 138. Fresh buying may be avoided.

What is the near-term outlook for Cipla and Indian Hotels? — Girish

Cipla (Rs 240.2): The stock has to move beyond the Rs 260 level before a positive trend can be in place. Fresh buying may be avoided for the moment while stakeholders may have a stop loss at Rs 228. Short-term traders may take long positions on a move past Rs 250 with a stop loss at Rs 236.

Indian Hotels (Rs 356.7): A high degree of intra-day volatility is evident in the daily charts. This makes it difficult to arrive at a meaningful outlook for the near-term as there are too many spikes at price extremes. From a longer-term perspective, the stock appears to have upside potential. A move to Rs 385-Rs 390 appears likely. Holders may place the stop loss at Rs 320 for a portion of the holdings and at Rs 340 for the rest. Fresh buying may be avoided.

What is your view on Tata Teleservices?

Tata Teleservices (Rs 18.1): The stock has been confined to a narrow trading range for several weeks now. The earlier view of a drop to Rs 14-Rs 16 range is still valid. A drop below Rs 17.25 would confirm this view. Remain invested with a stop loss at Rs 17.25 and use a trailing stop loss in the event of an uptrend. Fresh buying may be avoided till there is evidence of an established uptrend.

May I have your views on near and long-term prospects of IVRCL (Rs 193) and VisualSoft (Rs 133)? — Sadiq Pasha

IVRCL (Rs 190.2): There is a possibility of a drop to Rs 145-Rs 150 range. The stock then is likely to resume the uptrend. Hold with a stop loss at Rs 180 for a portion of the holding. If the stop loss gets triggered, fresh buying may be considered on evidence of support at around Rs 145-Rs 150 range. Fresh buying may also be considered if the stock moves above Rs 205 after hitting the stop loss at Rs 180. After the completion of the expected downward move, the stock is likely to recover to Rs 230-Rs 235 range.

VisualSoft (Rs 127.3): There are no signs of an uptrend in the near term. The stock has witnessed sideways price action, which indicates indecision. A move above Rs 160 would impart bullish momentum. Till such time, it would be safer to stay away from the stock. Shareholders may have a stop loss at Rs 119.

Is Kesoram Industries a good buy at current levels? Also what is your suggestion on Polaris Software? — Arunimma

Kesoram Industries (Rs 92.8): Though the stock is technically on an uptrend, the overlap between successive upward swings is not a sign of a healthy rally. Those interested in short-term trading may take positions in this stock with a suitable stop loss in place. This stock is, however, not recommended as an option for long-term investors.

Polaris Software (Rs 146.6): The stock has not seen any significant movement over the past several weeks. A drop below Rs 130 would have negative implications while a move above Rs 170 would impart bullishness. It may be better to wait for a breakout from the trading range before initiating any position.

Is it advisable to buy MphasiS BFL and iGate Global? — Roma

MphasiS BFL (Rs 265.6): Though there appears to be marginal downside risk, it would be better to wait for buy triggers before committing funds. A move above Rs 280 would trigger a buy signal. The stop loss may be placed at Rs 255.

The potential target price may be Rs 315-Rs 320. A drop below Rs 250 would be a negative or sell trigger. This would warrant dilution of holdings by shareholders.

iGate (Rs 241.7): The recent price chart does not throw up any significant clue about the price trend likely in the near-term. We are unable to offer any recommendation on this stock from a technical perspective.

Could you please discuss the outlook on Mangalam Cement and Mysore Cement, given the buoyancy in the cement sector? Is it advisable to enter at current levels? — J. Vikram

Mangalam Cement (Rs 52.7): The stock could move up to Rs 65-Rs 67 range in the near-term. Only a drop below Rs 44 would negate this view. Hold on with a stop loss at Rs 44. Fresh buying may be considered with a stop loss at Rs 44, if the stock moves above Rs 55.

Mysore Cement (Rs 15.7): The near-term trend appears weak. A drop to Rs 12-Rs 13 range appears likely. Fresh buying may be avoided for the time being. Evidence of support around Rs 12-Rs 13 range may be used to take long positions in limited quantity with a suitable stop loss in place. Alternatively, a move above Rs 17 would trigger a buy signal and may be used to take long positions with a stop loss at Rs 14.

Is it advisable to hold IOC (Rs 193) and Cummins India (Rs 111)? — P. Sivaram

IOC (Rs 408.4): The near-term outlook is positive and a move to Rs 435-Rs 440 range appears likely. Given the positive outlook and taking into account your purchase price, it is better to hold. There is no reason to sell the stock at prevailing market price. Hold with a stop loss at Rs 374.

Cummins India (Rs 102.9): The stock has been confined to a narrow trading band. A drop below Rs 88 would impart weakness. Alternatively, a move past Rs 113 would result in a bullish phase. Hold with a stop loss at Rs 88. Investors uncomfortable with such a wide stop loss may place the stop loss at Rs 95. Fresh buying may be avoided at the moment.

Please let me know the outlook for Shipping Corporation of India (Rs 127) and Andhra Bank (Rs 47). — S.K.Kapur & Suja

Shipping Corp (Rs 116.2): The stock appears to be headed towards Rs 125-Rs 130 range in the near term. Hold with a stop loss at Rs 106. Shareholders may either book partial profit on a move to Rs 125-Rs 130 range or employ a trailing stop loss to protect unrealized gains. Short-term traders willing to take risk may go long on a move above Rs 120, with a stop loss at Rs 112.

Andhra Bank (Rs 42.6): The share price could move towards your purchase price shortly. A drop below Rs 39 would have negative implications. It is better to look for opportunities to reduce exposures in the stock. Holders may have the stop loss at Rs 39.

I bought Bongaigaon Refineries at Rs 68. What is the outlook for the stock? — Suja

Bongaigaon Refineries (Rs 66.6): The stock could seek higher levels in the near-term. A move to Rs 74-Rs 75 range appears likely. A drop below Rs 57 would have negative implications. Hold with a stop loss at Rs 57 and take partial profits once the stock moves closer to the target zone of Rs 74-Rs 75.

Should I hold or sell FDC (purchased at an average rate of Rs 58) and Ranbaxy (Rs 800)? — R. Bhatia

FDC (Rs 46.6): The stock has recorded a sharp bounce off the lows at Rs 33.6. The recent recovery appears to be the start of the next phase of the earlier bullish trend. There is no reason to sell this stock now as it appears to be headed towards Rs 65-Rs 70 range. A drop below Rs 36 would negate the positive outlook. Shareholders, comfortable with a higher level of risk, may hold with a stop loss at Rs 35. The rest may have the stop loss at a tighter level of Rs 41. Short-term traders may consider long positions on a move above Rs 48, with a stop loss at Rs 41.

Ranbaxy Labs (Rs 947.8): There is a risk of a decline of to Rs 750-Rs 780 range. The stock is, however, likely to resume the long-term uptrend after the completion of the expected drop to Rs 750-Rs 780 range. Remain invested with a stop loss at Rs 900. A trailing stop loss may be used in the event of a sustained rally. Fresh buying may be considered if the stop loss at Rs 900 gets triggered and the stock seeks support at Rs 750-Rs 780 range. The near-term bearish outlook of a drop to Rs 750-Rs 780 range would be negated if the stock closes above Rs 1,090.

(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, Chennai 600002.

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. 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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