The Hindu Business Line : Query Corner

I have a large quantity of Hindustan Zinc Ltd (bought at average cost of Rs 925). Please give your views on this stock. My holding is for long-term, between one-and-a-half to two years minimum. R. Rajasekaran, S. P. Srinivas

Hindustan Zinc (Rs 831.1): The chart of Hindustan Zinc cannot be studied in isolation without taking in to cognisance the movement of the international zinc prices. Zinc prices saw a sharp run up from September 2005 that has made the prices gain more than 250 per cent. The prices are currently consolidating and seem poised to make yet another upward break-out. If we study the graph of Hindustan Zinc against this backdrop, any dips should be utilised to buy in to this stock as long as the price stays above Rs 750.

The next move up will take the price to Rs 1,022 and then Rs 1,178. Partial profits ought to be booked near the previous high of Rs 1,100.

Could you please advise me about the medium-term prospects of Godrej Consumer Products? Ajith Thottupurkal, Chokkalingam

Godrej Consumer Products (Rs 151.4): This stock is delicately poised on its long-term trend line positioned at Rs 150. The chart is exhibiting great weakness for the short-term. A fall below Rs 150 can drag the price towards the June lows of Rs 122. Fresh buying should be made only if the price closes above Rs 168. We envisage a broad-based sideways move for this stock in the range between Rs 120 and Rs 200 over the next year.

I have recently purchased Amtek Auto at Rs 344. What is the medium- and long-term outlook of this stock? N. Arul

Amtek Auto (Rs 343): The counter rose from a low of Rs 240 in May to its previous all-time high of Rs 373 in December. The stock has weakened from the Rs 370 levels again. The medium-term support for the stock exists in the zone between Rs 290 and Rs 310. Medium-term investors should hold the stock with a stop at Rs 285. If the price reversed from this support zone, it can rally to a new high in the short-term. Long-term support for the stock exists at Rs 240. A range-bound move between Rs 240 and Rs 400 is possible for the next one year. This would be conducive to the stock launching on to its next upward move in the long-term.

I have 300 Garden Silk Mills bought at Rs 64. Should I hold the share, book loss or average? How is the medium-, long-term outlook on the chart? Shyam Bhat

Garden Silk Mills (Rs 54.4): The scrip could recoup only 48 per cent of the loss suffered in May in the subsequent pull-back. The short-term trend has turned weak since the price reversed from a high of Rs 65 in October. If the current slide stops above Rs 48, we can see one more bounce to Rs 65 or Rs 78. Hold your shares with a stop at Rs 47. Book loss if there is a fall below Rs 47 as the price can then head towards Rs 37. Averaging is not recommended in loss making positions.

I am holding Tata Teleservices (Maharashtra). Please advise the short-term and long-term prospects for this company. Narrendra Bhatia, Sushil Negi, Rajesh Gupta

Tata Teleservices (Rs 18.6): In our last review of this stock in September 2006, we had stated that the price movement lacks conviction and that this stock will struggle to rally above Rs 24 over the next few months. The price has since struggled to rise beyond Rs 21. Any short- term rally will face great resistance from the band between Rs 20 and Rs 21. Short- term support exists at Rs 15.4.

The long-term outlook will turn positive only on a close above Rs 24. Long-term investors should contemplate entry only on a weekly close above Rs 24.

Kindly comment on the prospects of Ramco Systems and Geodesic Information Systems. Paulose C.D., D. A. Rama Sarma

Ramco Systems (Rs 189.6): Ramco Systems is languishing in the band between Rs 140 and Rs 220 since June. Since this sideways band comes after a 72 per cent fall from its September 2005 highs, it continues to remain a risky bet at this juncture. A rally above Rs 235 will take the stock to the next resistance that exists at Rs 285.

Exit the stock if it fails to rally above Rs 235 in the next few months. The stop can be kept at Rs 137.

Geodesic Information Systems (Rs 182.7): Geodesic reversed from its long-term support of Rs 130 in August. The price has since risen to Rs 243 and is reacting from there. The short-term outlook for this stock is negative. But short-term support exists at Rs 165. If this support holds over the next few months, we can look forward to another move upwards to Rs 248 and then Rs 296. Hold with a stop at Rs 164.

I have got shares of Bharti purchased at Rs 450 and at Rs 640. May I hold or dispose? I am a short-term holder.S. Sudha Krishna Moorthy

Bharti Airtel (Rs 611.4): Since your outlook is short-term, hold the stock with a stop at Rs 570. The stock can move upwards to Rs 676 or Rs 728 if the short-term support at Rs 582 holds over the next one month. Book partial profits as the stock nears the previous high at Rs 650.

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.

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