The Hindu Business Line : Query corner

SBI (Rs 911): Taking into account the positive outlook and your entry price, there is no reason to sell the stock now. Hold with a stop-loss at Rs 860. Risk-averse investors who prefer a tighter stop-loss may settle for Rs 880. The share price could move to the immediate target zone of Rs 955-960. Investors may consider partial profit booking on evidence of resistance at this zone. Alternatively, a trailing stop-loss may also be used in the event of a rally beyond Rs 960.

I am original allottee of Reliance Energy shares. It has not participated in the recent stock market rally. Please advise whether to hold or switch? — K. Ravichandran

Reliance Energy (Rs 575): The stock has been in a major side-ways corrective phase for over a year now. Though there is a case for the stock to have completed the corrective phase at Rs 474 in May, there are no convincing signs to this effect in the subsequent price action. A close above Rs 595 would be a sign of strength and would help the stock move to the target zone of Rs 640-650. Hold with a stop-loss at Rs 535. Fresh exposures may be considered on weakness, with a stop-loss at Rs 535.

Please let me know the long-term prospects of TIL and Malwa Cotton. — Krishna Parameshwar

TIL (Rs 142): The outlook is bullish and a move to Rs 170-175 appears likely. The positive view is subject to the stock holding above the stop-loss level of Rs 125. Fresh exposures may also be considered with a stop-loss at Rs 125. A close above Rs 153 would confirm the positive outlook and would help the stock seek the target zone. Long positions may be enhanced on a close past Rs 153, with a stop-loss at Rs 135.

Malwa Cotton (Rs 157): A close above Rs 167 would impart a positive trend. On the downside, the stock has support at the Rs 135-140 range. Investors may hold with a stop-loss at Rs 134.

Fresh exposures may be considered on evidence of support at the Rs 135-140 range, with a stop-loss at Rs 129.

A close above Rs 167 would help the stock move to the target band of the Rs 185-190 range.

What is your view on Hindalco? — P.V. Ramakrishnan, K.C. Antony, Tarun K. Gupta

Hindalco (Rs 137): The outlook is positive and a move to the Rs 155-160 range appears likely.

Short-term price weakness may be used to pick up exposures, with a stop-loss at Rs 125. A move past the immediate resistance level at Rs 143 would confirm the positive outlook. It would require a close below Rs 110 to negate the positive outlook.

Long-term holders may settle for a stop-loss at Rs 110. The rest may fix at Rs 125.

Shall I hold or exit from SAIL? — Brian Joseph, S.N. Ammal, Sadak Thamby

SAIL (Rs 52): We would be bullish on the stock as long as it holds above the crucial support level at Rs 47.

A breach of this level could push the stock to the Rs 33-35 range. Investors may hold with a stop-loss at Rs 46. There are also minor support levels at the Rs 50-51 range as well.

The stock is likely to seek support at this range and try to move towards the Rs 62-65 band. Long positions may be considered on weakness, with a stop-loss at Rs 46.

I would like to know for how many days your recommendation will be valid. Can the recommendation given today be applicable and acted upon even after a month or it is valid only for the corresponding week? — Ram

The recommendation featured in this page would be valid as long as the stop-loss level, given along with it, is not breached. There is no "expiry period" for the recommendation featured in this page.

As highlighted elsewhere in this page, investors need to bear in mind the risk-reward ratio before entering into a trade.

If the price has moved substantially from the recommended level, there is no point taking that investment, as the risk-reward ratio would not be favourable.

(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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We would endeavour to answer as many queries as possible. However, constraints of space will limit the responses featured under this column.

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