The Hindu Business Line : Query Corner

Nava Bharat Ferro (Rs 366.5): Sell at least a portion of the holdings as there are no signs of recovery. A drop to the Rs 335-340 range appears likely. Fresh exposures may be considered either on the evidence of support around the Rs 335-340 range or on a close above Rs 410.

Should I hold or sell Allahabad Bank bought at Rs 78 and SAIL at Rs 65? — Laxmi Devi

Allahabad Bank (Rs 86.2): The recent upward move stalled at the crucial resistance level at the Rs 91-92 zone. Only a close above Rs 93 would impart strength. Shareholders may remain invested with a stop-loss at Rs 80. A close below Rs 80 would push the stock down to the Rs 64-65 range.7

SAIL (Rs 51.4): The stock has been stuck in a narrow range in recent weeks. A move above Rs 58 would impart strength while a close below Rs 47 would have negative implications. Hold with a stop-loss at Rs 47 and use price rally to reduce exposures. A close below Rs 47 would result in a drop to the Rs 38-39 range.

I seek your opinion on my holdings in Infotech Enterprises and Visual Software bought at Rs 280 and Rs 122 respectively. — Abhaya Kumar Shah

Infotech Enterprises (Rs 292.5): It is advisable to sell a portion of the holding now and have a stop-loss at Rs 261 for the rest. A close above Rs 320 would impart bullishness that could take the stock to the Rs 350-360 band. Till such time, the stock is either likely to rule weak or remain confined to a narrow trading zone. Fresh exposures may be considered on a close past Rs 320.

Visual Soft (Rs 151.4): The stock has staged a sharp recovery in the past couple of weeks. The recent momentum is likely to sustain and the stock could move to the Rs 168-170 range. Taking into account your entry price and positive short-term outlook, it would be advisable to hold with a stop-loss at Rs 133 and a trailing stop-loss may be used if the stock moves past the target zone.

Is it advisable to buy Rajasthan Spinning at prevailing levels? — Akanksha

Rajasthan Spinning (Rs 123.6): The stock has seen a sharp upward move in the recent months. It appears to have hit the overbought zone and the stock is likely to rule weak in the near term. Fresh exposures may be avoided at these levels. Evidence of support around the Rs 105-109 range may be used as an opportunity to buy.

What is the outlook for Bank of Rajasthan purchased at Rs 57? — K.Guha

Bank of Rajasthan (Rs 55.4): Stop-loss for long positions may be placed at Rs 50. A close above Rs 60 would impart strength and could push the stock to the Rs 68-70 band. A close below Rs 50 would result in a drop to the Rs 40-42 band. Look to reduce exposures, as the outlook does not appear promising.

Please provide your views on Ashok Leyland bought at Rs 21. — Ravindra Singh, Selvaraj Sreenivasan

Ashok Leyland (Rs 25.2): Hold with a stop-loss at Rs 22, as there is a possibility of a rally to the Rs 28-30 range. Though the recent recovery does not appear convincing in terms of the underlying momentum and follow-up buying, a laboured approach towards the target zone may be on the cards. Profit booking may be considered on a move towards the target zone.

I am holding Clutch Auto bought at Rs 105 and IDBI at Rs 121. Should I hold or exit from a long-term perspective? — Suresh Kumar, Selvaraj Sreenivasan

Clutch Auto (Rs 107.2): The short-term outlook appears bearish and the stock could drop to the Rs 85-87 range. A close below Rs 100 would confirm this possibility. Remain invested with a stop-loss at Rs 100. Risk-averse investors may sell a portion of the holdings now and hold the balance with a stop-loss at Rs 100. Only a close above Rs 118 would reinstate a bullish trend.

IDBI (Rs 100.3): The recent price patterns indicate that there is the likelihood of exiting at levels higher than your entry price. Remain invested with a stop-loss at Rs 85. The stock is likely to resume the long-term upward trend on the completion of the downward corrective phase that it is confined to at present.

I had invested in Monsanto India at Rs 1450. What would be the stop-loss if you suggest holding the stock? — Sandeep Dhawan

Monsanto India (Rs 1568.3): Considering that you are holding a profitable position and taking into account the possibility of a further drop in share price, it would advisable to sell at least a portion of the holdings now. The stock is likely to drop to the Rs 1300-1325 range. Though the long-term trend is bullish, it would take quite a while for the stock to complete the present downward corrective phase. Fresh exposures may be avoided.

Kindly advise about my holdings in Amtek Auto at Rs 164 and HEG at Rs 99. — Nitin

Amtek Auto (Rs 171.1): The long-term outlook appears bullish and the stock could move to the Rs 195-200 range.

Hold with a stop-loss at Rs 145 and fresh exposures may be considered on a close above Rs 183.

Partial profit booking may be contemplated when the stock moves to the target zone at Rs 195-200. Alternatively, a trailing stop-loss may be employed, as the stock is likely to move to higher levels over a longer time frame.

HEG (Rs 148.3): After a sharp rally, the stock has been in a corrective phase in the recent months.

This corrective phase appears to have been completed a couple of weeks ago and the next leg of the rally is underway.

The stock could move to the Rs 185-190 range in the near term.

A close above Rs 155 would confirm the possibility of a rally to this target zone.

The positive view would be negated if the share price closes below the stop-loss level of Rs 120.

Taking into account your entry level and positive outlook, it would be advisable to stay invested with a stop-loss at Rs 119.

I bought Finolex Industries at Rs 82. Considering its recent fall, what would be your advice.. Could you also advise on Gujarat NRE Coke bought at Rs 115? — Amit Bararia, Kamal Riyaz

Finolex Industries (Rs 78.5): Risk-averse investors may sell a portion of the holdings now and have stop-loss for the balance at Rs 72. Others may hold with a stop-loss at Rs 72 for the entire holding.

The stock is likely to dart back to the Rs 88-90 range shortly. This view would be subject to the stock holding above Rs 72.

Gujarat NRE (Rs 111.5): The share price is likely to resume the earlier uptrend once the present corrective phase gets completed.

Though the price pattern in the past few days indicates the possibility of a completion of the correction, only a close above Rs 132 would provide confirmation of the resumption of the bullish trend.

Hold with a stop-loss at Rs 99. The stock is likely to get back to the Rs 135-140 range shortly.

I have a short position in Tata Tea in the futures market at Rs 561. What is the outlook and should I keep my position open? — Sanjay Kamalpurkar

Tata Tea (Rs 582.8): There is the possibility that the stock could drop to levels at which you had gone short.

The near-term outlook is weak and would remain so as long as the stock holds below Rs 599.

Fresh short positions may be considered with a stop-loss at Rs 599 with a price target of Rs 555-560.

What is the outlook for IndusInd Bank and SAIL? I bought these shares at Rs 63 and Rs 54 respectively. — Sumit Pratap Singh, D.K.Mahapatra

IndusInd Bank (Rs 68.1): After a prolonged corrective phase, the stock appears to have commenced the next leg of the rally recently. A move to the Rs 78-80 range appears likely in the near term. The positive view would be in force as long as the stock holds above Rs 62. Hold with a stop-loss at Rs 62 and take partial profits on the evidence of resistance around the Rs 78-80 range.

SAIL (Rs 51.4): The stock dropped sharply after hitting a high of Rs 70.4 a couple of months ago. Though there are no signs of the completion of this downward move, the stock could see a pullback or a corrective upward move to the Rs 58-60 range. A drop below Rs 47 would result in the continuation of the earlier downtrend. On the contrary, a close above Rs 62 would impart positive trend. Taking into account your entry level and the near-term outlook, it would be advisable to hold with the stop-loss at Rs 47.

(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)