The Hindu Business Line : Query corner

IFCI (Rs 12.9): The near-term outlook appears positive. The stock faces immediate resistance at the Rs 14-14.5 range. A close above Rs 14.7 would impart further strength and the share could move to the next resistance at the Rs 17.5-18 range subsequently. Taking into account the positive outlook, hold with a stop-loss at Rs 11.2. Use a trailing stop-loss in the event of a moveup in prices. A close below Rs 11.1 would impart weakness and may push the stock down to Rs 6-6.5.

Shall I hold or sell MphasiS BFL bought at Rs 265 and Jaiprakash Associates at Rs 220? — S. Srinivas, Vikas Rathi

MphasiS BFL (Rs 264.2): The share price has been consolidating in a narrow range over the past few months. A breakout from this range would push the stock into a trending phase.

A close above Rs 295 would impart bullishness that could push the stock to the Rs 340-350 range. On the other hand, a close below Rs 234 would impart weakness. Hold with a stop-loss at Rs 233.

Jaiprakash Associates (Rs 183.1): The outlook does not appear positive. A bearish "head and shoulder" appears to have been completed in daily price charts. The pattern would be valid as long as the stock rules below the "neckline" at Rs 198. A drop below Rs 170 would validate the pattern and the stock could drop to the Rs 130-135 range subsequently. Hold with a stop-loss at Rs 169. Fresh exposures may be avoided. Look to reduce exposures or employ a trailing stop-loss if the stock moves closer to the Rs 195-198 range.

I purchased Prism Cement at Rs 24.7. Please advise whether to hold or sell. — H.M.Seth

Prism Cement (Rs 19.7): The earlier positive outlook for the stock is valid. Though the share price could seek lower levels in the near term, there is no reason sell the stock as the long-term trend is bullish. The share price could revert to the Rs 28-29 range on the completion of the present corrective phase. The positive outlook would be under threat if the stock closes below Rs 14. Investors with a short-term trading profile may switch to stocks that are in upward trending phase. Long-term holders may remain invested with a stop-loss at Rs 14.

What is the outlook for Glenmark Pharma bought at Rs 254? — A. Anantharaj

Glenmark Pharma (Rs 236.5): After a sharp upward move, the stock has been in a corrective phase since March. The stock is ruling close to the major support range at the Rs 220-230 range. Remain invested with a stop-loss at Rs 219. Only a close above Rs 260 would impart strength. Look to reduce exposures on rally and use a trailing stop-loss to lock-in unrealised gains.

Your advice on my holdings in SBI Home Fin please. — G.S. Uppal

SBI Home Finance (Rs 13.8): The share price has been confined to a trading range in the recent weeks.

A weekly close above Rs 15 would help the stock seek higher levels. Till such time, the share price would either rule weak or be confined to a narrow trading range.

The trend would turn bearish if the stock closes below Rs 11.2. Stop-loss for long positions may be placed at Rs 11.2.

I need your advice about my holdings in Hindustan Lever bought at average rate of Rs 165 and a Tata Power at Rs 417. — P.T.Haridasan

Hindustan Lever (Rs 130.1): There are no signs of the completion of the downward trend that commenced in February 2000. The long-term price patterns indicate the possibility of a drop to the Rs 95-100 range. A close below Rs 128 would be an early sign of weakness while a drop below Rs 124 would confirm the possibility of a drop to the Rs 95-100 band. From a long-term perspective, the stock would get into a bullish phase on the completion of the present downward trend. Long-term investors may sell a portion of the holdings now and consider fresh exposures on evidence of support at the Rs 95-100 range.

Tata Power (Rs 366.7): Though the long-term trend appears positive, the stock is unlikely to get back to your entry level in the next few months. From a long-term perspective, only a weekly close above Rs 385 would reinstate bullishness. A drop below Rs 334 would result in the completion of a bearish "head and shoulder" pattern that could push the stock down to the Rs 260-270 band.

Taking into account these factors, it would be advisable to sell a portion of the holdings now and have as stop-loss at Rs 330 for the balance. Fresh exposures may be considered if the stock closes above Rs 396.

What is your view on Denso India? — M. Rajagopalan

Denso India (Rs 93): The near-term trend is bullish and the stock could move to the Rs 118-120 range.

Hold with a stop-loss at Rs 80 and a trailing stop-loss may be used in the event of a run-up in price.

Partial profit booking may be considered on the evidence of resistance at around the target zone of Rs 118-120.

What are the prospects for Narmada Chematur? — S.S. Vernekar

Narmada Chematur (Rs 46.1): The stock could seek higher levels of Rs 58-60. Shareholders may remain invested with a stop-loss at Rs 40. Though the near-term trend is positive, the stock appears to be heading into overbought region. A consolidation or a correction may be just round the corner. It would, therefore, be a safer ploy to use a trailing stop-loss if the share price moves up beyond Rs 60.

What is the outlook for Orchid Chemicals bought at Rs 340? — Sheila Bhatia, J. L. Gerard

Orchid Chemicals (Rs 300.2): The long-term trend is bullish. The stock could, however, rule weak in the near term. A close below Rs 293 could push the stock down to the Rs 265-270 range. There is, however, a fair chance that the share price would resume the long-term bullish trend from the target level of Rs 265-270. Hold with a stop-loss at Rs 293 for a portion of the holding. Fresh exposures may be considered either on the evidence of support at around the Rs 265-270 range or on a close above Rs 318.

The Engineers India stock has moved to the target price mentioned by you earlier. Should I hold or sell? Kindly let me have your views on Sesa Goa. — Satish Naik, J.Prabhakaran

Engineers India (Rs 423.3): The stock has stalled at a crucial resistance level at the Rs 460-465 range. Though the long-term trend does appear positive, it would be advisable to remain cautious. Sell a portion of the holdings now and have a stop-loss at Rs 400 for the balance. Fresh exposures may be considered on a close above Rs 450.

Sesa Goa (Rs 662): The share price appears to have the potential to move to the Rs 725-750 range.

The stock could move to this level on the completion of the corrective phase that is at present confined to.

Investors may hold with a stop-loss at Rs 600. A close above Rs 690 would indicate the resumption of the bullish trend.

What is the outlook for Cipla bought at Rs 313? — B. Harish

Cipla (Rs 273.3): Though the short-term trend appears weak, the stock is likely to recover ground after the completion of the present bearish phase.

Hold with a stop-loss at Rs 260 for a portion of the holding. Fresh exposures may be considered on evidence of support around the Rs 258-260 range.

A close above Rs 282 would help the stock move to the target price of Rs 315-320.

Please advise about my holdings in BEML at Rs 600 and Hindustan Oil Exploration at Rs 156. — P. Sreekumar, Sandipta Nath, Suresh

BEML (Rs 681): The share price has seen a sharp surge in the recent weeks. There appears to be still some room to be covered on the upside. The stock could move to the Rs 750-770 range. There is no reason to sell the stock now. Hold with a stop-loss at Rs 640. Long-term investors willing to wait for at least six months may find opportunities to exit at the Rs 950-1000 range. The positive view would be negated if the stock closes below Rs 580.

Hindustan Oil (Rs 158.4): The stock is in a long-term uptrend and a move to the Rs 175-180 range appears likely. Hold with a stop-loss at Rs 140. A close below Rs 140 would warrant dilution of holdings. Fresh buying may be deferred.

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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