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B. Krishnakumar

Is there scope for Godrej Industries to seek higher levels? I bought the stock at Rs 87.3 a couple of months ago. What is the outlook for J.B.Chemicals bought at Rs 382.3? — Nirmala Kumari

J.B.Chemicals (Rs 453.1): The next upward move appears to be getting underway. The share price is likely to move past the Rs 500-mark. Taking into account the entry price and bullish outlook, it is advisable to remain invested with a stop-loss at Rs 430. A move above Rs 485 would confirm the positive outlook. Investors willing to take risk may consider fresh exposures on a move past Rs 485, with a stop-loss at Rs 450.

Godrej Industries (Rs 108): The stock was covered recently in the "focus of the week" column. The share price dropped below the stop-loss level and negated the earlier bullish view. The drop from the recent high of Rs 142 appears complete. A close above Rs 118 would indicate that the stock is in the next leg of the rally that could take it past the recent high of Rs 142. A drop below Rs 97 would negate the positive view and would impart weakness. Hold with a stop-loss at Rs 97. Long positions may be considered on a move past Rs 118, with a stop-loss at Rs 97.

Kindly advise me on Banco Products and Ahmednagar Forgings. — C.Sapna

Banco Products (Rs 135.5): After moving to a high of Rs 150, the share price turned weak. This has resulted in the completion of a potential "double top" pattern. The subsequent price movement has not confirmed the completion of this pattern. A drop below Rs 115 would be an early indication that the stock is headed towards further lows. At this juncture, the sideways price movement witnessed over the past few weeks appears to be a consolidation and the stock could resume the upward move shortly. Hold with a stop-loss at Rs 125. Long positions may also be considered on a close above Rs 152, with a suitable stop-loss in place.

Ahmednagar Forgings (Rs 166): The next upward move appears underway. The stock could move to the Rs 200-mark. The share price appears to have broken out of a "bull flag" pattern. The bullish view would be valid as long as the stock holds above the stop-loss level of Rs 130. Long positions may be considered on declines with a stop-loss at Rs 130.

What are the prospects for Polyplex Corporation bought at Rs 247.25? — S. Shyam Sundar

Polyplex Corporation (Rs 217): The outlook appears positive and the stock could move to the Rs 290-300 range shortly. The positive view would be negated if the stock declines below the stop-loss level of Rs 190. Hold with a stop-loss at Rs 190. A close above Rs 238 would confirm the bullish outlook. Fresh buying may be contemplated on a close above Rs 238, with a price target of Rs 290. A drop below Rs 190 would impart weakness and the stock could drop to the Rs 145-150 range.

Is it advisable to hold Lakshmi Machine bought at Rs 7000? — N. Sharad

Lakshmi Machine (Rs 8402.6): The long-term outlook is positive. A move past Rs 8900 would confirm the positive view. On the contrary, a drop below Rs 8100 would result in the completion of a bearish "head and shoulder" pattern. This could push the stock down to sub-Rs 7000 levels. Hold with a stop-loss at Rs 8100. Partial profit booking may be considered on a move to the Rs 9300-9400 range.

Should I hold or sell my holding in PNB Gilts bought at Rs 27.5? — C.S.C. Prakash, D.V. Deshpande

PNB Gilts (Rs 19.9): The outlook for the stock appears positive. The earlier downward move appears complete and the stock could seek higher levels. The positive view would be in force till such time the share price holds above Rs 16. A close below Rs 16 would result in the continuation of the earlier downward move. Remain invested with a stop-loss at Rs 16.

What is the outlook for Ashok Leyland? — N. Chandrasekar, D.S. Rawat

Ashok Leyland (Rs 22.8): After a peaking at Rs 31.2 in January 2004, the stock has been in a major corrective phase. The correction appears complete and the stock could seek higher levels of Rs 28-30 in the near term. The positive view would be negated if the stock declines below Rs 19. Shareholders may remain invested with a stop-loss at Rs 19. Investors willing to take risk may consider long positions on a move past Rs 25, with a stop-loss at Rs 21.

Should I hold or sell TV Today and KEC international? — Akbar

TV Today (Rs 88.3): The stock has been on a downtrend since it got listed last year. There are no signs of the completion of this downtrend. It would be advisable to reduce exposures in this stock as there are no evidence to suggest that the stock could seek higher levels. There is no point locking up funds in a downward trending stock. It may instead be invested in stocks that have upside potential.

KEC International (Rs 121.2): A weekly close above Rs 124 would impart bullishness. The long-term trend remains bullish. The share price could move to the Rs 145-150 range on the completion of the corrective phase that the stock is currently in. Hold with a stop-loss at Rs 97 for a portion of the holding and at Rs 108 for the balance.

Is it advisable to buy Shanthi Gears and Neyveli Lignite Corporation at the current levels? — Anand

Shanthi Gears (Rs 39): The stock is in a major uptrend and there are no signs of completion of this trend. The volatility in the stock has been dropping to lower levels. Typically, a shrink in volatility is normally followed by a sharp splurge in volatility. A move past Rs 44 would help the stock seek higher levels of Rs 52-55. A drop below Rs 33 would have bearish implications. The stock is in a non-trending mode in the shorter time frame. Long positions may be considered once the stock gets into a trending mode. This would happen on a move past Rs 44. Buy on a break above Rs 44, with a stop-loss at Rs 36.

Neyveli Lignite (Rs 68.2): The trend is bullish and a move to the Rs 79-80 range appears likely. Investors may buy the stock on a move above Rs 70, with a stop-loss at Rs 63. A drop below Rs 63 would be a sign of weakness and a close below Rs 59 would negate the positive view. Shareholders may remain invested with a stop-loss at Rs 59.

What is the outlook for Sesa Goa and Gujarat NRE Coke? — A. Ramchandran.

Sesa Goa (Rs 1254): Our earlier bullish view has been validated by the steady uptrend in share price. The recent price pattern indicates that the stock has upside potential despite the recent upward spike. The stock appears to be in "Wave 3" of some degree in Elliott Wave parlance. The positive view would be in force as long as the price trades above Rs 1140. The immediate target for the stock is placed at the Rs 1400-1500 range. Shareholders may remain invested with a stop-loss at Rs 1140. Fresh buying may be deferred as the stock could reach overbought levels and a correction or a sideways price action may not be just round the corner.

Gujarat NRE Coke (Rs 187.6): After a brief consolidation, the stock appears to have resumed the earlier uptrend. The outlook is bullish and a move to Rs 205-210 range appears likely. Hold with a stop-loss at Rs 160. Buying may also be considered on price weakness, with a stop-loss at Rs 155.

I bought Satyam Computers at an average price of Rs 371 and Tata Motors at Rs 431. What is the short-term outlook for these shares and what should be my stop-loss? — S. Muralidharan

Satyam Computers (Rs 400): The stock has recovered from a crucial support level at the Rs 350-355 range. The stock appears to be headed towards higher levels of Rs 445-450. A break below Rs 348 would result in the completion of a bearish "head and shoulder" pattern. The bullish view would prevail till such time the Rs 348 level is not tested. Hold with a stop-loss at Rs 375 for a portion of the holding and at Rs 348 for the balance. Fresh purchases may also be considered on price weakness, with a stop-loss at Rs 375.

Tata Motors (Rs 492.2): The short-term outlook is bullish. The stock appears to have the potential to move to the recent high of Rs 526. Hold with a stop-loss Rs 475. Fresh buying may be deferred.

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

techtrail@thehindu.co.in

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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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