The Hindu Business Line : Query Corner

Sundaram Clayton (Rs 1,211.4): This stock has been a strong performer since July, gaining about than 55 per cent from the low in that month. The long-term trend in this stock is bullish.

Though there can be dips in the medium term to Rs 1,100 or even Rs 1,000, long-term investors are advised to hold on to this stock. The price can double from the present level over the long term.

Could you please advise on the prospects of holding/buying Berger Paints? Ivan Massey, Anindita

Berger Paints (Rs 55): The stock has raced to its May high of Rs 58, backed by the announcement of the bonus issue. Though the price has been dipping over the past two weeks, the medium-term trend is still positive.

A consolidation between Rs 52 and Rs 58 over the next few months will pave the way for the next leg up that can take the stock past Rs 80. Hold the stock with a stop at Rs 50.

What are the long- and short-term prospects of IFCI? V.K. Dhawan, Nimitha Thrichandranathan, H. V. Vasavamba, Pramod

IFCI (Rs 12.2): It is hard to imagine the stock at the lofty height of Rs 100. But that is where it was in February 2004.

This stock is currently struggling to rise from a long-term bear phase. The price is in a range between Rs 5 and Rs 20 since 2004. The price of Rs 20 needs to be crossed before the long-term outlook can turn positive.

The price has, however, started zooming upwards last week on the back of strong results. The stock seems headed towards Rs 15 in the short term. As the breakout last week has caused a fresh buy signal for the intermediate term, fresh positions can be initiated with a stop at Rs 11.2.

I am holding shares of Birla VXL bought at Rs 125 nearly a month ago. The stock has been going down since then.

Initially it was rising with upper circuits; however, now it is dropping with lower circuits. This stock has shattered my faith in stock market. I can wait if so advised. Will the averaging be worth at this juncture? Vijay Kapoor

Birla VXL (Rs 63.4): It would be greatly helpful if you make a note in a diary of the ways in which you could have avoided this situation and how the loss could have been minimised. It will come in handy in future.

The point we are trying to make is that this should be taken as a learning experience and you should move on, paying greater attention to risk management (stop losses) in future. The stock is currently weak.

Long-term support exists between Rs 48 and Rs 51. The price can reverse from there. So, hold the stock with a stop at Rs 45.

Exit if the stock falls below Rs 45. Averaging is not advisable, as a bottom is not yet visible.

I am holding RS Software purchased at Rs 82. Can I hold, sell or buy more? Anil Kumar. K

R S Software (Rs 81.8): The intermediate-term trend is up in this stock since the low of Rs 40 made in June. The price is presently consolidating in a band between Rs 64 and Rs 80.

The price can breakout to Rs 90 or Rs 102 over the next 3 months. Hold the stock with a stop at Rs 67. Fresh purchases can also be made with the same stop.

I hold TCS. Can you tell me the targets for this scrip with stop loss level? Pradeep Nayak, Utkal Nayak

TCS (Rs 1,092.0): In our Techtrail dated September 17, we had stated, "The stock is moving in an upward moving channel since July. The upper boundary of this channel is positioned at Rs 1,050.

"As the previous all-time high is also positioned at Rs 1,050, this is the target for the short term. Short-term investors can book partial profit at these levels. A strong breakout beyond Rs 1,050 is required to propel the price to Rs 1,200."

This stock hit a high of Rs 1,175 last week and reacted from there. As this level is also the upper boundary of the channel mentioned above, it is advisable to book profits here.

Fresh position should be contemplated only on a breakout above Rs 1,200. A fall to Rs 1,012 or Rs 950 is possible from these levels, which will provide the right opportunity to take a fresh position again with three- to six-month perspective.

I am holding shares of Unitech. What is the outlook for this company? G. Vivekanandh, B. Raman

Unitech (Rs 394.2): This stock is in an unbridled bull phase. The price seems headed towards Rs 450 in the next one year. Short-term investors can hold the stock with a stop at Rs 340 and long- term investors can keep a deeper stop at Rs 300 and hold this stock.

Fresh entry is not suggested for investors at this level as this stock has the penchant for shifting to the circuit-to-circuit mode often, leaving novice investors in the lurch.

Readers can send in their queries, on not more than two companies, to techtrail@thehindu.co.in

Queries can also be sent by post to: Tech Trail, 859/860 Kasturi Buildings, Anna Salai, Chennai 600002.

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

Lokeshwarri S. K.

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