The Hindu Business Line : Query corner

Lloyd Electric (Rs 160.2): Though the long-term trend is bullish, the stock could seek lower levels, as it is still in a short-term corrective phase. A drop to the immediate support range at Rs 135-140 appears likely.

Investors holding profitable positions may sell a portion of their holdings at prevailing levels and place the stop-loss at Rs 138 for the balance.

A close above Rs 170 would be an early indicator of the resumption of the long-term uptrend.

Glenmark Pharma (Rs 323.8): The outlook for the stock was featured a few weeks ago (edition dated July 24).

The price action subsequent to this recommendation has forced us to take a closer look at the earlier short-term bullish view.

The lack of follow-up buying, waning momentum and higher volatile price movement warrants a cautious approach.

While the earlier long-term outlook continues to be positive, there are no conclusive signs of the completion of the short-term decline.

A close below Rs 290 would strengthen the case for a drop to the Rs 235-240 range; a close above Rs 370 would be a sign of strength.

Investors may sell a portion of the holdings at prevailing rates and retain the balance with a stop-loss at Rs 289.

Please let me know the outlook for Assam Company bought at Rs 281 and Silktex at Rs 56. — C. Sumathi

Assam Company (Rs 239.3): Remain invested with a stop-loss at Rs 225. A sharp price move appears to be just round the corner. The drop in volatility and the price movement being confined to a narrow trading range are indicators that the stock could see a violent breakout shortly. A close below Rs 225 would result in a slide to the Rs 190-200 range; a close above Rs 290 would push the stock into a bull orbit.

Silktex (Rs 52.1): The near-term trend is bearish and a drop below Rs 42 would result in the acceleration of the drop in price.

The long-term uptrend would resume on the completion of the short-term bearish trend that the stock is confined to. Hold with a stop-loss at Rs 42.

Fresh exposures may be avoided. Investors who have entered at lower levels may consider at least partial profit booking.

The share price of D.S.Kulkarni has achieved your price target. You have also mentioned that the stock would enter a major corrective mode subsequently. I have a huge position in the stock and need your advice regarding the near-term outlook and whether to hold or reduce my exposures. — Mahesh Wadhwa

D.S.Kulkarni (Rs 147.9): The trend would turn bearish on a close below Rs 129. Till such time the stock holds above this level, there would be a fair chance of the continuation of the bullish trend.

As you hold a sizable position, it would be advisable to sell at least a small portion of your holding at prevailing rates.

This would always provide an extra degree of comfort in the event of a price drop.

Besides, you would have the leeway to place the stop-loss for remaining position at a more logical level, even if it is slightly farther from prevailing market levels.

Sell a portion of the holdings now, and have a stop-loss at Rs 128 for the balance.

In the event of the resumption of the uptrend, the stock could run up to the Rs 195-200 range. A close above Rs 170 would be an early indicator of the resumption of the uptrend.

Suppose if the price of a stock falls below the negative trigger level owing to a bonus or stock split, will it result in a valid breach of the trigger level or should there be any adjustment in the negative trigger price. Let me also have your views on Ind-Swift purchased at Rs 82.

All relevant price levels, including stop-loss and targets, would warrant an adjustment when the stock turns ex-bonus or goes ex-split.

The adjustment to these levels would be in the proportion to the stock split or bonus ratio.

As far as Ind-Swift is concerned, the recent downward move does not appear complete. It could drop to the Rs 50-55 range from the prevailing price of Rs 68.8.

As the chances of the price moving past your entry level appears relatively remote, it would be better to reduce exposures.

A couple of weeks ago, you had mentioned that India Glycols in a corrective phase and a drop to the Rs 220-225 range appears likely. Should I buy at prevailing levels or wait for further correction? — Tushar Ambre

India Glycols (Rs 222.6): The stock dropped way below the anticipated support level at the Rs 220-225 range.

After hitting a low of Rs 208.5, it recovered ground on Friday to close at Rs 222.6.

The long-term trend remains bullish and the stock is likely to at least re-test its recent high at the Rs 275-280 range.

The positive view would be negated on a weekly close below the crucial negative trigger level of Rs 201.

Fresh exposures may be considered on price weakness, with a stop-loss at Rs 201. Exposures may be enhanced on a close above Rs 242.

Shall I hold GNFC bought at Rs 106 and Reliance Industrial Infrastructure at Rs 320? — Narendera Kumar

GNFC (Rs 90.55): Hold with a stop-loss at Rs 87. A breach of this level could result in a drop to the Rs 78-80 range.

A trailing stop-loss may be employed in the event of an upward move.

The trend would turn positive on a close above Rs 105. Till such time, it would be advisable to look for exit opportunities.

What is the outlook for ITC? — Hari Kishan

ITC (Rs 137.8): As the share price is in a major uptrend, investors may use price weakness to include the stock in their portfolio.

A move to the long-term target of the Rs 190-200 range appears likely. The positive view would be valid as long as the stop-loss level of Rs 105 is not breached.

Hold with a stop-loss at Rs 105. Fresh exposures may be considered on declines, with the same stop-loss.

Should I hold or sell Vindya Telelink bought at Rs 190? — Rajandra Rana, M. Elango

Vindya Telelink (Rs 184): There is no reason to exit now as the stock has significant upside potential from the prevailing levels.

The stock could move to the Rs 235-240 range shortly. Remain invested with a stop-loss at Rs 150. Fresh exposures may also be considered on weakness, with a stop-loss at Rs 150.

Please advise about my holdings in Excel Crop Care. — S. Subur Basha

Excel Crop (Rs 228): The stock is ruling just above an upward sloping trendline. A close below this line would impart weakness. The line has an inclination of Re.0.5 per day and its prevailing value is Rs 214.8. The recent price pattern does not portray a bullish picture.

Though there is no case for a fall either, it would be better to turn cautious.

A close below the trendline on two days in succession would push the stock into a bear orbit. On the upside, there is resistance at the Rs 255-260 range.

Please let me know whether to hold or sell Opto Circuit bought at Rs 225 and CESC at Rs 246. — Krishna Parameshwar

Opto Circuits (Rs 194.6): Similar to a few recommendations made in the recent past, the stock has seen a sharper retracement than our expectations. As a result, the stop-loss level would have been trigger in a few of our recent recommendations. This does not, however, rule out of the possibility of a move to the target zone; it would only result in a delay in the process. As far as this stock is concerned, the first stop-loss level of Rs 200 has been breached.

As observed a couple of weeks ago, the long-term uptrend would be negated only a close below Rs 155. Investors may have this level as their stop-loss. Exposures may also be considered on weakness, with a stop-loss at Rs 155. The stock appears on course to move to our earlier mentioned target zone of Rs 290-300.

CESC (Rs 219): Hold with a stop-loss at Rs 210 for a portion of the holding and at Rs 198 for the balance. There is a possibility of recovery towards your purchase price. Use a trailing stop-loss in the event of an upward move. Fresh exposures may be avoided. A close below Rs 198 would warrant liquidation of long positions.

(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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