The Hindu Business Line : Query Corner

Allahabad Bank (Rs 76.1): Allahabad Bank has been moving southward since it hit a high of Rs 99 in November 2006. The immediate support for the stock lies at Rs 71. A reversal from here will take the stock price higher to Rs 83 and then Rs 89. A firm close above Rs 89 is required to make the long-term outlook in this stock positive. Exit the stock if it falls below Rs 70 and re-enter between Rs 50 and Rs 55.

I have Transport Corporation of India purchased at Rs 86. Now it is trading at Rs 67. Is it advisable to hold on to it for long-term appreciation and if so, how long will it take to reach the cost price? J.R. Kamath

Transport Corporation of India (Rs 64): The stock has made a double top around Rs 90. Your cost price is near this peak. The level to watch out for in the immediate future is Rs 63. A fall below this level will drag the price lower towards its August 2006 low of Rs 41. Hold the stock with a stop at Rs 58. If the stock price sustains above Rs 60, we can see the stock price making a new high over the next three to six months.

I would be grateful if you can let me know the technical outlook of Premier Explosives purchased at Rs 50. Azad Gahlot

Premier Explosives (Rs 41): Premier Explosives had a meteoric rise in 2005 that made it rally from Rs 30 to Rs 211 in seven months. The entire gains were wiped out in the next 12 months and the stock was back at Rs 31 in June 2006. A narrow range bound movement between Rs 30 and Rs 60 has been observed since then. The long-term trend in this stock is extremely weak and the stock is not likely to rally above Rs 100 in the next one year. It would be prudent to exit this stock as it nears your cost price. Hold till then with a stop at Rs 30.

I have bought 500 shares of Srei Infrastructure Finance. Can I hold it for long-term? Rakesh Agarwal

Srei Infrastructure Finance (Rs 51.4): The long-term outlook for this stock continues to be up. Though the stock has been sliding since the beginning of February 2007, the outlook stays positive as long as the price sustains above Rs 45.

A reversal from this support can take the stock price higher to Rs 70 or Rs 85 over the next one year. Hold the stock with a stop at Rs 42.

I hold 300 shares of Su-raj Diamonds at Rs 67. Please let me know the future prospects for this share. Nityanand Bhat

Su-raj Diamond (Rs 53.3): Su-raj Diamond is currently halting near important long-term support that exists in the band between Rs 50 and Rs 55.

You can hold the stock if it sustains above Rs 50. It could then reverse and move higher to Rs 66 or Rs 79 over the next six months.

I bought Raymond at Rs 485. I am a long-term investor. Should I hold this stock for the next one year? N. K. Rajagopalan

Raymond (Rs 347.8): Long-term investors need not have second thoughts about holding this stock as long as the stock price rules above Rs 290. The stock is moving in a broad-based long-term range between Rs 300 and Rs 450. A breakout beyond the upper boundary will take the stock price towards its previous all-time high of Rs 625.

I am a long-term investor. Please let me know the prospects of Ceekay Daikin and Paramount Communications. C. S. Loganathan

Ceekay Daikin (Rs 73.6): This stock is in a vicious down trend. The stock never recovered from the sharp fall that it witnessed in the middle of 2006.

The stock price has currently slipped below the lows that it made in July 2006. But the long-term support for this stock exists at Rs 69.

Long-term investors can continue to hold this stock till it sustains above this support. Exit if the price falls below Rs 69. The resistance that the stock will face on its way up will be at Rs 90 and then at Rs 105. A firm close above Rs 105 is required to signal that the worst is behind this stock.

Paramount Communication (Rs 40): This stock is sliding down after getting near its April 2006 peak of Rs 61. It is currently halting near its intermediate term support at Rs 37. Hold the stock with a stop at Rs 35. A bounce from here can take the stock price higher to Rs 45 or Rs 50. A rally beyond Rs 50 is needed to make the long-term outlook positive again.

What are the prospects of Titan Industries bought at Rs 1,033? Muthukumar

Titan Industries (Rs 862.3): Currently, Titan Industries is correcting the upward move that extended from June 2006 to February 2007. The important support for the intermediate term lies at Rs 840.

A recovery above this level will make the stock consolidate in a band between Rs 850 and Rs 1,050 for a few months before the up trend resumes.

But a fall below Rs 850 will take the stock price lower towards the next target that exists at Rs 770 and then Rs 700. Exit the stock if it closes below Rs 850 and try to re-enter around Rs 700.

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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