The Hindu Business Line : Query Corner

Titan Industries (Rs 1,400.5): Titan has resumed its long-term up trend from the trough at Rs 1,025 formed in August. Since you have bought the stock close to this low, you can hold the stock as long as it stays above this level. The move since the August low has been strong and unmarred by any corrections. Medium-term investors can hold the stock with a stop at Rs 1,270. The stock has the target of Rs 1,673 over the next one year.

I have purchased Alchemist at Rs 115. Kindly give your outlook on this stock. Munish Bhatheja

Alchemist ( Rs 90.1): Alchemist is in a vicious down trend, having lost 70 per cent since the peak formed in October 2006. The rally in August is only a bear market pull back. The speed with which the stock collapsed from the medium-term resistance at Rs 130 confirms this fact. The stock can return to its near-term support at Rs 80.

We recommend switching from this stock at current levels as it is expected to struggle to move past the resistance band between Rs 120 and Rs 130 over the next six months.

I have purchased Tech Mahindra at Rs 1,797 six months ago. The stock has fallen drastically since then. Kindly advise me whether to hold it or to sell it. S. Balakumar

Tech Mahindra (Rs 1,294.5): Tech Mahindra has been in a long-drawn corrective phase since January. This move is retracing the up-move recorded from the trough at Rs 534. The intermediate-term support for the stock exists at Rs 1,100. Investors should hold on to the stock as long as it trades above this level.

Since a three-wave move has already been completed from the Rs 2,050 peak, a bounce back is expected soon. Any short-term up move will face stiff resistance from the zone around Rs 1,500. Short-term investors can book profits around this level. However, we expect the stock to move higher towards Rs 1,720 over the next one year.

I have Kirloskar Oil Engine bought at Rs 370 and Global Vectra Helicorp bought at Rs 235. Kindly let me know the prospects of this stock. K. Kanagraj

Kirloskar Oil Engine (Rs 319.4): The May 2006 correction made Kirloskar Oil Engines shave off 50 per cent from its peak. But the stock recovered smartly from these depths and went on to make a new all-time high at Rs 400 in July.

Though the stock is in a medium-term down trend since this peak, it is halting at the crucial support at Rs 320. Fall below this level will take the stock to the next support band between Rs 280 and Rs 290. Investors with a long-term perspective can hold the stock with a stop at Rs 275. We expect the stock to rise higher towards Rs 400 and then Rs 470 over the next one year.

Global Vectra Helicorp (Rs 186.8): Global Vectra Helicorp was unable to sustain the recovery that took place between March and June this year, and the stock is back near the lower end of its trading range at Rs 155. The stock is currently charting a fledgling recovery from this support.

You can hold the stock with a stop at Rs 150. Immediate resistance will be encountered at Rs 207 and then Rs 230. Short-term investors can consider booking partial profits around Rs 200.

I have bought Kirloskar Electric at Rs 239. Please let me have your outlook on this share. Keyur Shah

Kirloskar Electric Company (Rs 270.2): Kirloskar Electric vacillated in a range between Rs 70 and Rs 110 from July 2006 to July 2007.The stock moved out of this range in July and has gained over 150 per cent since then. The up trend continues to be strong and seems ready to take the stock higher to Rs 301 or Rs 343 over the next one year. Hold the stock with a stop at Rs 220. Investors with a longer-term perspective can hold the stock with a stop at Rs 180.

I have Lanxess ABS at Rs 175 and Cranes software at Rs 105. Please advise on the prospects of these two shares. J. Joseph

Lanxess ABS (Rs 196): The entire move made by Lanxess ABS since the 2001 low of Rs 19 can be enclosed within an upward moving trend channel. The upper boundary of this channel has been effective in arresting the rallies in this stock. It is once again reversing after testing the upper boundary at Rs 211.

But the movement in the narrow range between Rs 185 and Rs 200 since July displays resilience and hence is a positive for the near term. Hold the stock with a stop at Rs 185. Though it will continue to encounter resistance in the band between Rs 200 and Rs 220, the stock has the potential to move higher to Rs 242 over the medium term.

Cranes Software (Rs 113.7): Cranes Software has been in a long-term correction since November 2005. This move made the stock move between Rs 85 and Rs 135. The rally in May made the stock test the upper boundary of this range at Rs 135. But it was unable to move past the upper boundary and the stock is now back near the intermediate-term support at Rs 113. A fall below this level will take it to the long-term demand zone between Rs 90 and Rs 100.

Hold the stock with a stop at Rs 90. This protracted consolidation phase is positive for the stock from a long-term perspective. We expect the stock to give multi-fold returns once this consolidation phase ends.

I purchased KPIT Cummins at Rs 120. Kindly let me know the prospects of this stock. Alok Ghosh

KPIT Cummins Infosystems (Rs 133.1): In our previous review of this stock, we had forecast a movement between Rs 110 and Rs 155 for a year. KPIT Cummins reversed from Rs 154 in June to fall to the lower end of the band by August.

A very strong up-move was witnessed last Thursday that has made the stock gain 17 per cent in a day and close above the long-term moving averages. The stock is now expected to move towards the intermediate term resistance at Rs 155. A strong break-out beyond this level will take the stock towards its record high at Rs 181.

However, another reversal from the Rs 155 hurdle is a strong possibility. Book some profits at current levels and hold the rest of your shares with a stop at Rs 130.

I have purchased DCW at Rs 16 and Selan Exploration at Rs 136. Please let me have the technical outlook for these shares. T. Kamal Kumar

DCW (Rs 14.6): DCW has been stuck within a range between Rs 10 and Rs 16 since early 2006. The stock has turned volatile after reaching the upper band on September 4. We recommend an exit at current levels as the stock could return to its long-term base over the medium term.

Selan Exploration Technology (Rs 140.3): Though Selan Exploration has experienced intense volatility between September 2005 and March 2007, the movement since the second quarter of this year suggests the beginning of a structural bull phase.

The stock is turning a little wobbly around the previous peak at Rs 136. But the near-term support at Rs 130 should cushion the stock in minor corrections. Hold the stock with a stop at Rs 128. The next support is available at Rs 128. The stock has the potential to move to Rs 168 over the medium term.

— Lokeshwarri S.K.

(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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