The Hindu Business Line : Query corner

The earlier bearish view was negated on two counts. The stock failed to drop below the negative trigger level of Rs 434-440 and also moved past the positive trigger level of Rs 505.

Just to reiterate, we would like to highlight that the opinion or view pertaining to a stock would be invalidated on the breach of the stop-loss or the trigger level mentioned along with the recommendation.

As is normally the case, the break past the trigger level or the stop-loss level would impart a strong move in the direction of the breakout.

The outlook for Tata Motors remains bullish and a move to the Rs 670-680 range appears likely. Remain invested with a stop-loss at Rs 570.

I purchased Nucleus Software at Rs 397 and Opto Circuits at Rs 224. Shall I hold or exit from these stocks? — M. Ramabatran

Nucleus Software (Rs 392): The short-term outlook would remain bullish as long as the price holds above the stop-loss level of Rs 360. The stock could move to the immediate target zone at Rs 420-430.

Investors may hold with a stop-loss at Rs 360. Fresh exposures may also be considered on weakness, with a stop-loss at Rs 360. A trailing stop-loss may be used in the event of a move past the target zone.

Opto Circuits (Rs 237.4): The stock has been on an uptrend since March, which does not appear complete as yet. A move to the Rs 270-275 range appears likely.

This view would be valid as long as the share price holds above Rs 210. Hold with a stop-loss at Rs 210. Exposures may enhanced on a close above Rs 245.

What is the outlook for Pricol and Jaiprakash Hydro at the existing price levels? — Anandanarayanan

Pricol (Rs 45.8): After a sharp uptrend since 2003, the stock has been in a corrective phase in the past few months. This corrective phase appears complete and a fresh leg of an upward move could get underway shortly.

The stock could move to the Rs 58-60 range.

This view would be negated on a close below Rs 40. Stop-loss for long positions may be placed at this level.

Fresh long positions may be considered with a stop-loss at Rs 40. Exposures may also be enhanced on a weekly close above Rs 48.

Jaiprakash Hydro (Rs 34): The historic price data is insufficient to arrive at an outlook for the stock.

Is it worthwhile to invest in Archies at prevailing levels? What is the outlook for Su-Raj Diamond? — Prateek

Archies (Rs 153): Fresh exposures may be avoided for the moment, as there appears to be limited upside potential.

The share price could move to the target zone of Rs 175-180.

Shareholders may hold with a stop-loss at Rs 140.

Short-term traders willing to take risk may consider long positions with a stop-loss at Rs 140 and a target price of Rs 180.

Su-Raj Diamond (Rs 61.5): The stock appears to be headed towards the Rs 72-75 range. The positive outlook would warrant a reassessment on a close below Rs 55.

Investors may hold with a stop-loss at Rs 55. Long positions may be also be considered afresh with a stop-loss at Rs 55. Investors may take partial profits on the evidence of resistance at the target zone of Rs 72-75.

I would like to know the prospects of Mercator Lines and Amtek India. Shall I buy these stocks at prevailing levels? — N.G. Durai Rajan

Mercator Lines (Rs 148): The share price has seen a steady upward move in the past couple of years.

The long-term uptrend does not appear complete. A move to the Rs 195-200 range appears likely.

Though this target is unlikely to be achieved in a jiffy, a steady move towards it appears likely.

Long-term investors may include the stock in their portfolio. Stop-loss for long positions may be placed at Rs 130. Investors may also consider fresh exposures with the same stop-loss.

Amtek India (Rs 116): The near-term outlook is positive. The share price could move to Rs 128-130 shortly.

The positive view would lose validity on a close above Rs 103. Investors willing to settle for a return of about 12-15 per cent may consider long positions at prevailing levels.

Stop-loss for long positions may be placed at Rs 103.

What is the outlook for SAIL? — S.N. Bandaru, R. Raghuram, D.V. Deshpande,

SAIL (Rs 56): The long-term outlook is positive and the stock could move to Rs 72-75. Investors may hold with a stop-loss at Rs 48.

Fresh exposures may also be considered on weakness, with a stop-loss at Rs 48.

A close below Rs 52 would be an early sign of weakness and a close below Rs 48 would push the stock into a bearish phase.

Please advise whether to hold or sell Kajaria Ceramics purchased at Rs 44.50. — Shyamala P. Kamath

Kajaria Ceramics (Rs 43): Taking into account the bullish outlook and the possibility of a rally to Rs 62-65, there is no reason to sell the stock now.

The positive outlook would be negated on a close below Rs 38. This level may be used as stop-loss.

Fresh exposures may also be considered on declines, with a stop-loss at Rs 38.

What is the outlook for Zicom Electronics bought at Rs 125 and Titan Industries at Rs 167? — Kannan

Zicom Electronics (Rs 153): The stock is in a long-term uptrend. A fresh leg of the upward move appears to have commenced at the recent low of Rs 109.

If this assessment is correct, the share price is likely to move to Rs 195-200 shortly. Given the positive outlook, investors may hold with a stop-loss at Rs 129.

Titan Industries (Rs 791): The share price has seen a sharp upward spike in the recent months. This move can be categorised as the explosive "third wave" in Elliott Wave parlance.

The implication is that the stock is likely to move up further after a brief correction. The stock has reached the overbought zone in weekly charts; a correction may be just round the corner.

Such price dips ought to be viewed as opportunities to buy the stock, as it could move to the long-term target zone of Rs 950-1000.

Stop-loss for long positions may be placed at Rs 670.

Please let me have your views on Infosys and ITC? Every now and then you mark-up your target for Infosys. What does one do when the stock reaches the target mentioned by you? Should we book profit or continue to hold? — Sudhin Bathija

The outlook and recommendation pertaining to key pivotals (featured elsewhere in this page) would be applicable for the short-term traders.

The stop-loss level that is mentioned may be used as a benchmark by long-term investors. They can continue to hold as long as the stop-loss level is not breached. Besides, we also mention medium-term targets for the stocks from time to time. In the case of Infosys, we had first mentioned a target zone of Rs 2,650-2,700 when the stock was trading at Rs 2,200-2,300. Then, we revised it to Rs 2,950-2,960 and we have done so again this week. Similarly, we have also given medium-term targets for other stocks such as Reliance and the SBI.

These targets are not applicable for short-term traders. We normally mention the time zone in which the target is likely to be achieved.

Once a target zone is achieved, conservative investors may sell a portion of their holding or push up the stop loss to protect unrealised gains. It would always be a safe strategy to take partial profits and consider re-entry at lower levels, provided the long-term uptrend is intact.

Infosys (Rs 2,989): The long-term outlook is positive and the stock has the potential to move to Rs 3,500-3,600 range from a long-term perspective.

Investors willing to wait for at least six months may hold with a stop-loss of Rs 2,640.

Fresh exposures may also be considered by long-term investors with a stop-loss at Rs 2,640.

ITC (Rs 141): The stock appears to be moving towards Rs 170-175. The stock is in a long-term uptrend and shareholders may remain invested with a stop-loss at Rs 123.

Long positions may also be considered on price weakness, with a stop-loss at Rs 123. A close below Rs 123 would delay the progress to the target zone and would not negate the positive outlook.

(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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