The Hindu Business Line : Query corner

Manali Petro (Rs 26.5): There is scope for a move to the Rs 32-34 range. The near-term trend is positive and investors may hold with a stop-loss at Rs 20. Short-term traders may consider fresh exposures with a stop-loss at Rs 23. Shareholders need to be cautious, as the stock could get into an "overbought" zone shortly, leading to a correction. Considering that the chart patterns appear overstretched in weekly charts as well, a protracted phase of correction may be just round the corner. Given this scenario, it would be advisable to take at least partial profits once the stock moves past the target zone.

Lloyd Steel (Rs 21): Thought the stock is in a long-term uptrend, there is an intermediate resistance at the Rs 23-24 range. The share price could take a breather around this range and continue its uptrend after a short-term correction. Investors who have entered at lower levels may remain invested with a stop-loss at Rs 17. Partial profit booking may be considered on a move to Rs 24. Considering that the long-term trend is bullish, investors may consider fresh exposures on declines, with a stop-loss at Rs 17.

Kindly advise whether to sell or hold Siemens and Chemplast Sanmar. — M. Rajagopalan

Siemens (Rs 2,287): The recent uptrend does not appear complete as yet. The stock is likely to resume the uptrend on the completion of the corrective phase that it is at present confined to. A move to the Rs 2,550-2,600 range appears likely. The positive outlook would be negated if the stock closes below the stop-loss level of Rs 2,030. A close below this level would warrant reduction of holdings.

Chemplast (Rs 98): Hold with a stop-loss at Rs 84 as the stock has the potential to move to the Rs 115-117 range. The positive view would be negated if the price drops below Rs 84. Fresh exposures may be considered on price weakness, with a stop-loss at Rs 84. Exposures may be enhanced on a close above the immediate resistance level at Rs 104.

I bought Hindustan Dorr Oliver at Rs 90 and IVRCL Infrastructure at prevailing levels. Should I hold or exit from these stocks? — R.C. Babu

Hindustan Dorr Oliver (Rs 347): Considering your entry price and positive outlook, there is no reason to sell this stock now. Investors, however, need to be cautious as the recent upward move has pushed the price indicators to their upper extreme. Though this does not imply that the stock would crash in a hurry, a dose of caution and resorting to partial profit booking on signs of weakness would be in order. A close below Rs 310 would be an early sign of weakness. Hold with a stop-loss at this level and use a trailing stop-loss if the stock moves up.

IVRCL (Rs 791): Though the long-term outlook is positive, there are signs of weakness in the shorter time frame. The stock could get into a corrective phase in the near term. Investors who have entered at lower levels may sell a portion of their holdings. Long-term holders may settle for a stop-loss at Rs 700. As the long-term trend is positive, investors may consider fresh exposures either on price weakness or on a close above Rs 825. Investors willing to hold for a while may get opportunity to exit at about the Rs 1000 mark.

What are the prospects for Orient Paper that has moved past your target price mentioned a couple of weeks ago? What is the outlook for Pfizer bought at Rs 790? — Arundhati Samant

Orient Paper (Rs 216): The recent upward move is not complete. The stock could move to the Rs 245-250 range. Hold with a stop-loss at Rs 180. Fresh exposures may be taken on declines, with a stop-loss at Rs 180. Partial profit booking may be considered on a move to the target zone.

Pfizer (Rs 817): The price movement has lacked momentum in either direction. The stock has been oscillating in a trading band. It would be better to sell a portion of the holdings now and have a stop-loss at Rs 770 for the balance. Fresh exposures may be considered when the stock closes above the positive trigger level of Rs 870.

Please advise me on my holdings in Kirloskar Brothers at Rs 475 (after the split) and Swaraj Engines at Rs 173.5 (after the split). — Sunil Kumar, Bidyut

Kirloskar Brothers (Rs 518.3): The stock has seen a spectacular upward move over the last couple of years. This upward move does not appear complete as yet. A move to the Rs 595-600 range appears likely in the near term. Remain invested with a stop-loss at Rs 460. Investors who prefer a closer stop-loss may settle for Rs 500. The problem is the stock could turn volatile and may breach the stop-loss level and turn bullish subsequently. It is, therefore, better to settle for a relatively lengthier stop-loss though it may appear wide in normal scheme of things.

Swaraj Engines (Rs 200.2): The near-term outlook appears bearish. Investors may sell at least a portion of their holdings at prevailing levels and have a stop-loss at Rs 180 for the balance. Considering that the long-term trend is bullish, fresh exposures may be considered at lower levels, with a stop-loss at Rs 180. Only a close above Rs 220 would reinstate the positive trend and would help the stock seek the long-term target zone of Rs 265-270.

What is your view on Gujarat NRE Coke bought at Rs 165 and Uttam Galva bought at Rs 73? — Mohit Jain

Gujarat NRE (Rs 141.1): There is a fair chance that the stock would move past your entry price. A move to the Rs 185-190 range is not ruled out. The positive view would be invalidated if the stock closes below the stop-loss level of Rs 125. Fresh exposures may also be considered on price weakness, with a stop-loss at Rs 125. Exposures may be enhanced when the stock closes above Rs 150.

Uttam Galva (Rs 53): The stock has been on a sharp correction since hitting a high of Rs 75 in March. It appears to have completed the first segment of the fall at the recent low of Rs 39.5 in June. The subsequent recovery appears to be a correction to the earlier fall. The stock is likely to reverse direction at the resistance level at the Rs 58-60 range. The possibility of the stock getting past your entry price does not appear bright. It is better to look for opportunities to exit at higher levels. A convincing uptrend would emerge only if the stock closes above Rs 62.

Please let me know the prospects of Himachal Futuristic bought at Rs 22.5 and Nicholas Piramal bought at Rs 321. — Madavan Viswanathan & Prakash

Himachal Futuristic (Rs 25.7): The outlook is positive and a move to the Rs 35-38 range appears likely. There is no reason to sell the stock now. Remain invested with a stop-loss at Rs 21. Fresh exposures may also be considered on price declines, with a stop-loss at Rs 21. Investors may also enhance their exposures on a close above Rs 29.

Nicholas Piramal (Rs 276): A move to the initial target price of the Rs 310-315 range appears likely. There would be opportunities to exit at levels beyond your entry price of Rs 321, provided you are willing to hold for a while. Taking into account the overall market condition and the price patterns in the stock, it would be advisable to sell at least a portion of the holdings on a move towards the target zone. Alternatively, a trailing stop-loss may be employed.

What is the long-term view on Hindustan Lever? — Ashish Kaldhone

Hindustan Lever (Rs 167.6): The stock appears to be in a long-term uptrend. A move to the Rs 200-205 range appears likely.

The move towards this target zone would commence only after the short-term correction to the Rs 155-158 range.

Fresh exposures may be considered on the evidence of support at the Rs 155-158 band. The positive view would be in force as long as the stock holds above Rs 140.

What is the outlook for Syndicate Bank purchased at Rs 50 and Allahabad Bank at Rs 82? If I want to sell one of these stocks and consolidate my holdings in the other, which would be the one to be retained? — T.V. Gopalakrishnan, R Sathiyanarayanan, Ashish Kaldhone

Syndicate Bank (Rs 72.8): The share price is expected to resume the upward move on the completion of the short-term corrective phase that the stock is at present in. A close above Rs 78 would confirm the resumption of the uptrend. The stock could subsequently move to the Rs 88-90 range. Hold with a stop-loss at Rs 66.

Between Allahabad Bank and Syndicate Bank, we would prefer the latter. The chart patterns in Syndicate Bank are more promising in comparison with Allahabad Bank. A portion of the holdings in Allahabad Bank may be converted into Syndicate Bank.

(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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