The Hindu Business Line : Query Corner

Mercator Lines (Rs 123.3): This stock has been one of the multi-baggers of 2007, with a three-fold increase from the April trough. However, a medium-term downtrend has commenced from the November peak at Rs 159.

This correction can drag the stock to the long-term support zone between Rs 100 and Rs 110. Since you have bought the share with a one-year horizon, hold it with a stop at Rs 95.

Recovery from this level can make the stock rally to a new high over the next one year.

I bought shares of Teledata Informatics last week. Now I am unable to sell the share. Can you explain what is going on? Thiru Kumaran. M

Teledata Infomatics (Rs 66): The trading in the shares of Teledata Informatics has been temporarily suspended from November 16 due to a scheme of arrangement that the company is putting through. Wait for the shares to re-list before putting in your order.

The stock is moving between Rs 50 and Rs 70 over the last six months. If you are holding the shares from a short-term perspective, you can exit the share close to Rs 70.

I have purchased Jindal Drilling and Industries at Rs 1,070 and Mindtree Consulting at Rs 750. Please advise the future prospects of these companies. Ramarao Y. S.

Jindal Drilling and Industries (Rs 1,147.9): Jindal Drilling has been experiencing intense volatility since the record high made on October 15; moving in a wide band between Rs 900 and Rs 1,250.

This sideways move is correcting the up-move recorded since March this year. The stock is likely to move within this range for a few more months. Short-term investors can exit close to the upper boundary.

However, the medium-to-long term outlooks for the stock are positive.

The stock can record one more surge towards Rs 1,500 after the completion of this corrective phase. Investors with a long-term perspective can hold the stock with a stop at Rs 700.

Mindtree Consulting (Rs 417.7): The chart of Mindtree Consulting does not present a pretty picture. The stock has been in a relentless slide since the peak formed at Rs 1,023.

The limited trading history makes it difficult for us to identify psychological supports where buying interest can emerge. The bottom is not in sight yet.

We suggest that you exit the stock at this juncture and re-enter once it closes above Rs 550. A sustainable uptrend would be possible only if the resistance around Rs 500 is overcome.

I am holding Bartronics at an average price of Rs 240. What is the future outlook for the stock? Can you also comment on Aban offshore bought at Rs 5,170? Manjunath P

Bartronics (Rs 232.4): Bartronics has been in a corrective phase since it recorded the record high at Rs 287 on September 19. This sideways move has already retraced 50 per cent of the rally witnessed from the August trough of Rs 108.

The stock could move sideways between Rs 200 and Rs 300 for a few more weeks before the upward move resumes.

Investors are advised to hold the stock with a stop at Rs 190. A move below this level can drag the stock to Rs 165.

The short-term outlook for the stock is weak and move down to Rs 200 is possible in the near-term.

Investors with a short-term perspective can watch out for buying opportunity in this band.

Aban Offshore (Rs 4,684.1): Aban Offshore has been one of the most sought after stocks of 2007, yielding manifold returns this year.

In fact, the stock has doubled from the price of Rs 2,525 in the three months following August.

The stock is currently taking a much-needed breather. The immediate support for the stock is present at Rs 4,300. Since you have bought the stock at higher levels, you can hold with a stop at Rs 4,200.

A reversal above this level would mean that the bullish momentum would be maintained in this stock and the stock would continue to rally to astounding heights.

However, if the stock falls below Rs 4,300, investors should be ready to face further down-move that can drag the stock lower to Rs 3,600.

Long-term investors can hold the stock as long as it holds above this level.

Can you please express your views on Kajaria Ceramics purchased at Rs 27 and Tata Teleservices (Maharashtra) purchased at Rs 45. Should I hold these stocks or book loss? Sudheer

Kajaria Ceramics (Rs 24.8): Kajaria Ceramics has been in a vicious down trend since September 2006 that dragged it down from Rs 64 to Rs 20.

However, the stock is currently halting around the long-term support band between Rs 20 and Rs 25. Though the stock could spend a few more months moving in the band between Rs 20 and Rs 40, investors with a long-term perspective can hold the stock with a stop at Rs 18. Fresh investments should be considered only when the stock moves above Rs 40.

Tata Teleservices (Maharashtra) (Rs 48.3): Tata Teleservices is moving in an upward-moving trend channel since September. This is a bullish pattern and portends an upward breakout to Rs 60.

You can hold the stock with a stop at Rs 41. The positive medium-term outlook will be negated only if the stock closes below Rs 40.

I hold 400 shares of Indian Overseas Bank bought during IPO. Please tell me whether I should continue holding the shares or book partial profits. Jeyaprakash

Indian Overseas Bank (Rs 141.9): Indian Overseas Bank recorded a significant long-term trough at Rs 65 in June 2006 and has been moving up steadily since then. This move can be enclosed within an upward-moving trend channel. The stock hit the upper boundary of this channel at Rs 160 and reversed last week. The speed and the strength of the down-move suggest that the correction could be long-term in nature.

Since you have been holding the stock since its initial public offer, we recommend holding the stock with a stop at Rs 115. It would be best to exit the stock once this support is breached since the next support is at Rs 90.

Please advice on Vijaya Bank bought at Rs 73. Sunil K. Jha

Vijaya Bank (Rs 75.3): Vijaya Bank faces strong long-term resistance at Rs 75. The stock reversed from this level in April 2005, July 2005 and again in November 2005. Though market participants would have cheered as the stock shattered this ceiling and moved to a record high (Rs 88) in November, the subsequent crash makes a sustained rally past Rs 80 highly doubtful.

You can hold the stock with a stop at Rs 66 and exit in short-term bounces to Rs 79 or Rs 81. Investors with a long-term perspective should consider buying this stock only if it records three-weekly closes above Rs 75.

— Lokeswarri S. K.

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