The Hindu Business Line : Query Corner

Rajesh Exports (Rs 237.3): The stock is reacting after hitting a high of Rs 261 in mid-October. This can be an intermediate-term peak and we can see the price move in a band between Rs 175 and Rs 260 for the medium term. Short-term investors should hold the stock with a stop at Rs 195.

This stock has long-term resistance at Rs 260. We can expect a broad-based trading range between Rs 300 and Rs 150 in this stock over the next two years.

Buy near the lower end of this range and sell as the price nears the upper end.

What are the short- and long-term prospects of GSK Pharma? Bansal

GSK Pharma (Rs 1,153.3): This stock has the short-term support at Rs 1,120 from where it is turning upwards. The support below this level lies at Rs 1,070. Short-term investors should hold the stock with a stop at Rs 1,100.

The stock can rally to Rs 1,225 and then to Rs 1,300 in the short-term.

However, a fall below Rs 1,070 can drag the price all the way down to Rs 920. The price faces long-term resistance at Rs 1,306. This level would continue to act as a hindrance to any upward movement in this share over the next one year.

I have invested in McDowell and Bombay Dyeing for short-to-medium term. What is the outlook for these companies on the charts? Sandeep Dhawan

McDowell (Rs 793.4): This stock has broken out sharply since last month, gaining 31 per cent to the recent peak at Rs 827. The immediate target on the upside is at Rs 894.

Some profit can be booked at Rs 895, as this is also the previous all-time high for this stock. Fresh positions can be built if the price rises past Rs 895. Hold the stock with a stop at Rs 720.

Bombay Dyeing (Rs 716.8): The counter rose from the June low of Rs 396 to a high of Rs 742 in August. The price has been moving in a narrow band between Rs 620 and Rs 770 in what looks like a positive consolidation pattern.

But there is a strong resistance at Rs 760. This level needs to be crossed if the price has to rise to Rs 866 or Rs 998.

Fresh long positions should be initiated only if the price rises above Rs 770. Medium-term investors can hold this stock with a stop at Rs 720.

I am holding the shares of Aban Loyd (now called Aban Offshore). Should I hold these shares or sell them? M. A. Chandra Mohan, Sanjay Kothari, Bhaskar Parab

Aban Offshore (Rs 1027.3): In the issue dated August 6, we had mentioned that the short-term targets for this stock are Rs 1,150 and then Rs 1,230. We had recommended buying on dips with a stop at Rs 840.

The stock has crossed above our second target to hit a high of Rs 1,310 in late August.

The stock is currently reacting from this high in a medium-term correction. The price needs to stay above Rs 1,050 to keep the medium-term outlook positive.

A fall below Rs 1,010 will drag the price to Rs 900 or Rs 853.

Book partial profits now and hold the rest with a stop at Rs 1,000. We envisage a range between Rs 800 and Rs 1,400 for this stock for the next one year.

You can re-enter near the lower end of this trading range.

We have shares of Rain Calcining and Gujarat NRE Coke. Please let us know the short-term view on these shares. C. Sumathi, Ajith Thottupurkal, Sundaresan

Rain Calcining (Rs 43.8): The scrip is reacting after hitting a high of Rs 53 last month. This is the fourth time that this stock is reacting from the Rs 50 to Rs 55 zone since the beginning of 2005. The stock has fallen 34 per cent, 39 per cent and 54 per cent in the previous three instances.

Book profits at this juncture. The stock can take support at Rs 41 or Rs 39.

Swing traders can consider re-entry if the price stabilises above Rs 39, with a stop at Rs 37.

Gujarat NRE Coke (Rs 31.8): The counter has failed to exploit the rally in the markets that took place post June. The price is struggling to rise above the resistance in the zone between Rs 40 and Rs 42.

This zone would have to be breached strongly if the stock has to shake off the bearishness.

The chart pattern suggests weakness along all time frames. Immediate support for the short-term exists at Rs 30.

If this level is breached, the stock can fall to Rs 27. Hold with a stop at Rs 28.

I am holding SRF Ltd shares for the last seven months, which were bought at Rs 356 in April. I am losing money now. Kindly let me know the targets for the stock. Som Dutt

SRF (Rs 252.4): The medium-term outlook for this stock is positive. The next target is at Rs 284. The price might have trouble crossing Rs 284 in the next few months. Exit part of your holding if the price stutters here.

If Rs 284 is crossed strongly, the price can head to Rs 343.

Please give the support, long-term target and the price levels to buy into the following stocks — Divis Lab and HPCL. Sridhar Gopal

Divis Lab (Rs 2,827.2): This stock was moving in a broad channel between Rs 900 and Rs 2,000 since 2004. There was a long-term reversal in this stock in June from the low of Rs 1,110. If we extrapolate this long-term move on an arithmetic scale, we get the targets of Rs 3,003 and then Rs 4,172.

The long-term outlook for this stock will remain positive as long as the price stays above Rs 2,000. Accumulate this stock on dips. Levels where the stock can be bought are at Rs 2,650 or at Rs 2,500.

HPCL (Rs 333.8): Oil marketing companies have a negative correlation with international crude oil prices. This stock has risen sharply from a low of Rs 198 in July, in line with the drop in international crude oil prices from the high of $79 to the present level of $59.

The price has strong short-term resistance in the zone between Rs 340 and Rs 370. This zone will have to be breached strongly to take the price higher to Rs 410. Fresh long positions should be initiated only if the price closes above Rs 370.

What are the prospects of Sun Pharma bought at Rs 815 and HT Media at Rs 640? Vignesh Balaji

Sun Pharma (Rs 909.2): Sun Pharma is consolidating in a narrow band between Rs 890 and Rs 960 since August. The outlook for the stock is positive.

The target on a breakout above Rs 980 is Rs 1,130. Hold it with a stop at Rs 860. Fresh buys can be initiated with the same stop.

HT Media (Rs 670): The trend in this stock is positive. The price is consolidating in a band between Rs 650 and Rs 700 over the last two weeks.

A breakout from this congestion will take the price to its all-time high of Rs 750. Hold the stock with a stop at Rs 640 (your cost price).

What is the outlook of Selan Exploration purchased at 81.50? I am holding 450 shares. Gautam Khanijau

Selan Exploration (Rs 80.6): This scrip is expected to consolidate between Rs 70 and Rs 90 over the next few months. Hold the stock with a stop at Rs 70. A breakout above Rs 85 will take the stock to Rs 105.

I bought Cipla at Rs 264 and Yes Bank at Rs 70. What should I do? Hold or sell? I am a long-term investor. Manoj

Cipla (Rs 255.9): This stock is moving sideways since August in what looks like a rounding top formation. The stock is displaying weakness in the short- as well as the medium-term charts.

The price can test Rs 240 in the short-term. Hold the hold the stock with a stop at Rs 235.