The Hindu Business Line : Query Corner

TVS Motor (Rs 63.50): In our previous review of this stock in December 2006, we had expected the slide to halt at the long-term support band that exists between Rs 75 and Rs 90. But the stock has fallen below this band, which is extrem ely negative from a long-term perspective. The immediate support for the stock exists at Rs 58. But the pathetic attempts at rallying signal that the stock can move below Rs 54 over the next one year towards Rs 38. You can exit the stock at current levels and consider re-entry on a firm close above Rs 75.

Dish TV (Rs 96.35): Dish TV does not have sufficient history to enable us to do a comprehensive analysis. The stock has currently moved below its all-time low of Rs 97. If your investment horizon is short-term, you can exit at current levels and re-enter as the stock price moves above Rs 110.

I am holding Jindal Saw at Rs 160 and Webel SL Energy purchased in the IPO. Should I book profit in these shares or hold them for the long-term? J. Suryanarayana

Jindal Saw (Rs 684): Jindal Saw has recorded a spectacular run from July 2006, almost tripling from this trough of Rs 236. The long-term and medium-term trend in this stock continues to be up. Though a short-term reaction has commenced last week, the short-term outlook will not be under threat until the stock trades above Rs 612. Since you are a long-term investor, we suggest that you hold the stock with a stop at Rs 540.

Webel SL Energy (Rs 539.80): This stock has witnessed a high degree of volatility since it’s listing, oscillating in a wide band between Rs 250 and Rs 550. The stock price is presently near the upper boundary of the trend channel that is encasing the stock since 2005. Two weekly closes above Rs 550 are required to indicate that the stock has moved out of this channel and can head towards the band between Rs 650 and Rs 700. You can book partial profits at these levels and hold the rest with a stop at Rs 440.

Please give the short-term and long-term outlook for Reliance Energy bought at an average of Rs 462 per share and Moser Baer bought at an average of Rs 370 per share. M. Ratnakar Shet

Reliance Energy (Rs 676.40): Reliance Energy has been in a long-term bear market since April 2004. An A-B-C flat correction was completed between the April 2004 peak and June 2006 trough of Rs 362. The tentative fashion in which the st ock moved in the second half of 2006 suggests that it is a bear market pull back. A strong long-term resistance exists at Rs 650 for the stock. Reliance Energy has made three unsuccessful attempts to rally above this level between 2004 and 2006.

Immediate target beyond Rs 650 would be Rs 705. Since your investment horizon is short-term, book some profits at current levels and hold the rest with a stop at Rs 580.

Moser Baer (Rs 501.90): Moser Baer has recorded a significant long-term low at Rs 165 in June 2006. This up trend will stay in place until the stock trades above Rs 420. Short-term investors can hold the stock with a stop at Rs 420. In vestors intending to hold for more than a year can keep the stop loss at Rs 370. The stock can rise to Rs 590 over the medium term.

I have purchased 100 shares of Cambridge Technologies Enterprises at Rs 112. Can I hold the stock or purchase some more to average. Mohammed Hussain

Cambridge Technologies Enterprises (Rs 48.95): Cambridge Technologies has performed very poorly since listing and is currently trading 50 per cent below its record peak of Rs 119.9. The stock is floundering between Rs 50 and Rs 65 over the past two months. Recent moves made by the stock do not inspire any confidence and averaging is a definite no-no since it can only help to multiply your loss. You can exit from this stock at current levels. Consider re-entry if the stock moves firmly past Rs 76.

I have been watching Asian Electronics since it was quoting at Rs 175. I think this is an interesting chart. Am I correct? Y. Rajesh

Asian Electronics (Rs 1,069.30): If you prefer stocks that zoom vertically in to the stratosphere then this is certainly an interesting chart. Asian Electronics broke out from the consolidation zone between Rs 250 and Rs 600 in June 20 07. The stock has since gained more than Rs 600. The current move is the third wave from the 2005 low of Rs 61. The targets on extrapolating the first wave fall at Rs 963 and then Rs 1,283. Since the stock has already surpassed the first target, it would now head towards the second target. Use dips to buy the stock with a stop at Rs 950.

I have purchased MTNL at Rs 160. What is your view on this stock? Sadhna Jaiswal

Mahanagar Telephone Nigam (Rs 162.80): This stock has been an under performer in the post-June 2006 recovery. MTNL could retrace only 50 per cent of the fall from the peak of Rs 225 in this period. The intermediate-term resistance for the stock exists at Rs 175 and then at Rs 187. Reversal from these levels will drag the stock towards the long-term trend line present at Rs 130 again.

A fledgling rally is currently underway that can take the stock higher in the short-term. Hold with a stop at Rs 147.

I have purchased 500 shares of SAIL at Rs 149. Should I hold this stock or exit at these levels? Tushar Kanti Ghosh

Steel Authority of India (Rs 159.55): A long-term bull market is in place for Steel Authority of India since 2003. As per Elliott Wave counts, we are still in the third wave of this bull market. The third sub-minor of the third wave is currently on. This bull phase is expected to extend for a few more years during which the stock would move in a broad range between Rs 120 and Rs 200.

For the near term, hold with a stop at Rs 120. The near term target on the up side is Rs 161. The outer target in the short term would be Rs 177.

I hold shares of Mahindra Gesco at Rs 582, what is the outlook for this company. Ravi Sharma

Mahindra Gesco (Rs 563.50): Investors had a harrowing time since March 2006 as the stock moved vertically from Rs 350 to Rs 1,300 in two months, then plummeted 1,000 points in the following month. The recovery after August 2006 that to ok the stock past Rs 1,000 was also short-lived and the crash in the early part of 2007 has dragged the stock below Rs 500 again.

Turnover in this stock has cooled considerably. That indicates the exit of active traders from this stock. The stock is halting at the long-term support level of Rs 500. Investors can hold the stock with a stop at Rs 450. We expect the stock to move between Rs 450 and Rs 700 for a few more months. Book profits and exit the stock if it struggles to move above Rs 700. A move past Rs 700 will take the stock to Rs 850.

Lokeshwarri S.K.

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