The Hindu Business Line : Query Corner

I have purchased Reliance Industrial Infrastructure at Rs 3,030. Should I hold the stock or book loss at current levels? What are the prospects of this scrip in the short and medium-term? Prabhakar Kesani

Reliance Industrial Infrastructure (Rs 2,084.5): This stock has been among the multi-baggers of 2007 yielding over six-fold returns in the period between August and October. However, you seem to have purchased the stock close to its all-time high of Rs 3,175. The stock has since then given up almost 50 per cent of the gain recorded from the August trough.

We do not recommend a sell in the stock at these levels as the stock is trying to stabilise around the support at Rs 1,800. In spite of repeated attempts, the stock has been unable to breach this buttress over the last one month. You can hold the stock as long as it stays above Rs 1,500. There could be rallies to Rs 2,350 or Rs 2,650 in the near-term where you can consider exiting part of your holding, if your investment horizon is short. The stock can attain its former peak at Rs 3,175 in the medium-term.

I hold few shares of Crompton Greaves purchased at Rs 439. What is the future prospect for this stock? Rajesh Pandhare

Crompton Greaves (Rs 392.9): The long-term structural trend in Crompton Greaves is up. Though the stock is in a short-term down trend since November 20, short-term investors can hold the stock with a stop at Rs 345. If the stock bounces off this support, it can move higher towards Rs 500 over the next one year. However, some sideways move between Rs 350 and Rs 450 would be conducive to the long-term up trend in the company.

Investors with a long-term perspective can hold the stock as long as it remains above Rs 280.

I have purchased State Trading Corporation at Rs 1,130. Can you please let me know the prospects for this stock? Bhaskar Parab

State Trading Corporation (Rs 1,053.10): STC spiraled upwards in a dizzy manner between September and November, yielding over nine-fold returns in this period. The fall in the stock following its reversal from the peak at Rs 1,736 has been equally dramatic. The immediate supports for the stock exist at Rs 950 and then at Rs 760. The stock is currently trying to reverse upwards. This rally can make the stock rally to Rs 1,180 or Rs 1,400. Failure to move above the first resistance will be a signal that the stock can fall below Rs 760. The stock is not expected to move above Rs 1,400 over the next three months. Investors can exit the stock at the targets mentioned above. Stop-loss level ought to be at Rs 750.

I have shares of Foursoft bought at Rs 93 and Datamatic Technologies purchased at Rs 120 two years ago. What is your view on both the stocks? Shahab

Four Soft (Rs 52.60): Four Soft has not gone anywhere in the last two years and has been oscillating in a sideways band between Rs 40 and Rs 100. The stock reversed from the lower boundary of this band in November and is currently trying to move higher. But this rally will face resistance at Rs 57 and then at Rs 70 in the near-term. Four Soft would need to move above Rs 75 before the medium-term outlook turns positive.

If you intend holding the stock for the long-term, you can do so with a stop at Rs 40. The stock has the potential to rally up to your purchase price over the next two years. Medium-term investors can book profits in the zone between Rs 68 and Rs 72.

Datamatic Technologies (Rs 55): The outlook for Datamatic Technologies is extremely weak from a medium and long-term perspective. The stock is currently moving up from its all-time low of Rs 34. Though this rally can take the stock to Rs 67 or Rs 87 in the near-term, the stock could face selling pressure as it moves higher. Investors can switch from this stock at the levels mentioned above.

I am holding have 1000 shares of Moschip Semiconductors purchased at Rs 50 for the last two years. Please let me know what to do? Virendra Kumar Agarwal

Moschip Semiconductors (Rs 35.30): This stock has been meandering sideways over the last six years in the band between Rs 20 and Rs 70. The trading band got narrower over the last one year as the upper boundary has moved lower to Rs 40. The stock faces strong resistance around Rs 40 and this level needs to be surpassed before it can move higher to Rs 45 or Rs 50.

Moschip Semiconductors is once again reversing down from the resistance at Rs 40. You can hold the stock with a stop at Rs 31 and try to book some profits the next time it moves close to Rs 40.

I have purchased 50 shares each of BL Kashyap and Inox Leisure at Rs 1,700 and Rs 165 respectively. Please advice whether to hold or sell. Rajesh M. Shah

BL Kashyap and Sons (Rs 1,861): The short-term and medium-term outlook for BL Kashyap and Sons is positive. The correction that commenced on December 6 appears to be a minor one. You can hold the stock with a stop at Rs 1,680. Investors with a longer investment horizon can hold the stock with a deeper stop at Rs 1,520. The near-term target for the stock is Rs 1,990 while it can rally to Rs 2,200 in the medium-term.

Inox Leisure (Rs 216.90): This stock is on fire since late November; recording more than 100 per cent gains from the trough at Rs 110. The stock has moved past the strong intermediate-term resistance at Rs 200 in the process. The next target for the stock is Rs 252, which happens to be its lifetime high recorded in April 2006. Investors can hold the stock with a stop at Rs 200. Some profit can be booked if it struggles to get past Rs 252.

I have shares of Ultratech Cement purchased at Rs 1,120 and Jammu and Kashmir Bank at Rs 580. Please let me know the future prospects of both the companies. Abhishek Maurya

Ultratech Cement (Rs 977.80): Ultratech Cement is in a strong secular bull market. This phase will end only when the stock falls below Rs 800. But the stock is in a sideways corrective phase since January and this phase can extend for a few more months making the stock oscillate between Rs 800 and Rs 1,200. Investors with a long-term perspective can buy the stock as it moves towards the lower boundary of this zone.

The near-term outlook for the stock is a trifle shaky and it could move lower to Rs 900 in the near future. Short-term investors can hold the stock with a stop at Rs 900.

Jammu & Kashmir Bank (Rs 827.10): J&K Bank has been moving within an upward sloping trend channel since January 2007. The stock is currently struggling to breakout of this trend channel. Short-term investors can hold the stock with a stop at Rs 750. A fall below this level can drag the stock lower to Rs 670.

I have purchased Solvay Pharma at Rs 765. Please let me know the future of this stock. Paresh Maru

Solvay Pharma (Rs 685.90): Solvay Pharma was in a long-drawn corrective phase between January 2006 and November 2007. It broke out in December to move past its previous peak at Rs 660. However, the stock has turned very volatile after recording a recent high at Rs 790. The near-term outlook will stay positive as long as the stock holds above Rs 615. Fall below this level will drag the stock towards Rs 570 again. Short-term investors can hold the stock with a stop at Rs 610. Our long-term view for this stock is positive.

— Lokeshwari S.K.

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