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B. Krishnakumar

Arvind Mills (Rs 126): The stock is in a major downward corrective phase since December 2004.

As a result, it has underperformed the market indices, as well as others in the industry. The outlook is bearish, as the corrective phase does not appear complete.

Investors may look to reduce exposures.

A drop to the Rs 95-100 range appears likely.

A close below Rs 125 would confirm the view of a drop to the target zone. Investors willing to take risk may consider short positions in the futures market, with a stop-loss at Rs 135 (based on cash market price).

If this stop-loss is beyond the risk tolerance level, investors may wait for intra-day recovery and take short positions at levels closer to the stop-loss.

Short positions may be enhanced with a suitable stop-loss once the stock closes below Rs 125.

Karnataka Bank (Rs 111): After an uptrend in the past few months, the stock has got into a corrective phase over the last couple of weeks.

The corrective phase is likely to be over shortly and the next leg of the upward move would get underway subsequently.

The long-term positive outlook and the possibility of a move to the Rs 140-145 range would be negated on a close below Rs 105.

Remain invested with a stop-loss at Rs 105. Fresh exposures may be considered on a weakness, with a stop at Rs 105.

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