The Hindu Business Line : Query Corner

Orient Abrasive (Rs 31): The near-term outlook appears positive and the stock could move to Rs 35-36. Remain invested with a stop-loss at Rs 25. A close above Rs 36 would impart strength and could help the stock touch Rs 39-40. The short-term positive outlook would be negated on a close below Rs 25.

Finolex Industries (Rs 70): The price movement over the past few months does not enthuse much confidence. The stock appears to be headed towards the support zone at Rs 66-67. Sell a portion of the holdings at the prevailing level and have a stop-loss at Rs 65 for the balance.

Please let me have your views on Praj Industries bought at Rs 110 and Su-Raj Diamond at Rs 67. Sujoy Chakraborty

Praj Industries (Rs 102.8): The share price is ruling close to its support zone at Rs 97-100. A close below Rs 96 would have bearish implications while a close above Rs 109 would impart positive momentum. Shareholders may remain invested with stop-loss at Rs 96. Fresh exposures may be avoided.

Su-Raj Diamond (Rs 61): The price action does not portray a positive outlook from a short-term perspective. The stock could drop to Rs 50-52 shortly. A close below Rs 58 would confirm this possibility. Hold with a stop-loss at Rs 58 and reduce exposures on a close below Rs 58. Fresh long positions may be avoided.

Kindly let me know the outlook for ITC bought at Rs 160. Dinesh

ITC (Rs 178): Taking into account your entry price and the positive outlook, it would be advisable to hold with a stop-loss at Rs 169. Fresh exposures may also be considered at prevailing levels as well as on declines, with the stop-loss at Rs 169. Partial profit-booking may be considered if the stock faces resistance at Rs 195-200. Long-term holders may find opportunities to exit at Rs 220-225.

Shall I hold or exit from Malabar Building and Simbhaoli Sugar bought at Rs 140 and Rs 116 respectively? Amit A.Rao

Malabar Building (Rs 128): The short-term outlook is positive and a move to Rs 145-150 appears likely. Hold with a stop-loss at Rs 114. Fresh exposures may be considered on weakness, with the same stop-loss. Reduce exposures on the evidence of weakness at Rs 145-150.

Simbhaoli Sugar (Rs 140): Reduce exposures, as the short-term outlook is not positive. The stock could drop to Rs 122-125 in the near-term.

The bearish outlook would be in force as long as the stock trades below Rs 150. Only a close past this level would reinstate positive momentum.

Could you please let me know whether to hold or book loss in Nava Bharat Ferro Alloys? Rao

Nava Bharat Ferro (Rs 62): The stock has moved up sharply in the recent weeks. There appears to be upside extending up to Rs 72-74 in the near term.

Considering the positive outlook, there is no reason to sell the stock now. Investors may have a stop-loss at Rs 57 for a portion of the holding and at Rs 52 for the balance. Use a trailing stop-loss in the event of a move past the target zone.

Please let me know your view on ABB and MRF. D.V. Rangarajan

ABB (Rs 3,020): This stock has been amongst the top gainers in the last couple of years. Despite the sharp run-up in price, there appears to be still some steam left.

A move to Rs 3,450-3,500 appears likely in the near-term. Investors may hold with a stop-loss at Rs 2840.

Fresh exposures may also be considered at prevailing levels and on weakness with the same stop-loss.

As there is a strong support at Rs 2,935-2,950, a drop to this zone may be used to enhance holdings.

MRF (Rs 3,117): This is one of our favourite picks from the automotive tyre industry.

Both from technical and fundamental analysis, MRF scores high in relation to peers.

The stock is in a major upward trend and a move to Rs 3,550-3,600 appears likely in the near term.

Long-term investors can expect to see the share price soar past the Rs 4,000-mark. The positive outlook would be invalidated on a close below Rs 2,900.

Stop-loss for all long positions may be placed at Rs 2,900. Fresh exposures may also be considered on weakness with the same stop-loss.

What is your view on Narmada Chematur bought at Rs 40? Umashankar Sharma

Narmada Chematur (Rs 38): The stock has been on a downward trend since September 2005.

There are no signs of the reversal of this downward move. Hold with a stop-loss at Rs 35 and look to reduce exposures on upward trend.

Signs of resistance at Rs 42-43 would warrant dilution of exposures. Only a close above Rs 44 would reverse the negative trend.

Is it advisable to buy Nagarjuna Construction at prevailing levels? Sripada Vasu

Nagarjuna Construction (Rs 365): Fresh long positions may be considered at prevailing levels as well as on declines as the outlook is positive.

A move to Rs 425-430 appears likely. The positive outlook would be negated on a close below Rs 340.

Have a stop-loss at Rs 340 for existing holdings as well as for fresh exposures.

What is the outlook for Andhra Bank? Amit.N.Agarwal, Shankar Mandavali, Sriram

Andhra Bank (Rs 86): The stock is in a major corrective phase since March 2005 and there are no signs of the completion of this correction. The stock is unlikely to drop below the crucial support level at Rs 80-82.

A close below Rs 80 would indicate that the stock is headed to further lows. Remain invested with a stop-loss at Rs 79. A weekly close above Rs 95 would indicate that the stock has resumed the next leg of the upward move towards the target zone at Rs 115-120.

I am holding Petronet LNG bought at Rs 66 and Carborundum Universal at Rs 165. What is the outlook of these two companies? C. Damodaran

Petronet LNG (Rs 59): The short-term trend is bearish and a drop to Rs 52-53 appears likely. It would take quite an effort for the stock to get back to your entry levels. It will be safer to reduce exposures at prevailing levels. Have a stop-loss at Rs 56 for the balance holding.

Carborundum Universal (Rs 150): There is a strong support at Rs 145-147.

A close below Rs 144 would have negative implications and the stock could drop subsequently to Rs 122-125. Stop-loss for long positions may be placed at Rs 144. Avoid taking fresh exposures for the moment.

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