The Hindu Business Line : Query Corner

Jaiprakash Associates (Rs 321.1): Jaiprakash Associates has put up quite a resilient show in the latest correction. The stock is halting just above the long-term support at Rs 320 (though there was a dip below this level on the day when the Sensex hit the 10 per cent circuit breaker).

A consolidation in the range between Rs 300 and Rs 500 would be conducive to the continuation of the long-term up trend in the stock.

However, a fall below Rs 300 would bring the next long-term support at Rs 250 into play.

Long-term investors should hold the stock with a stop at Rs 240.

JP Associates is attempting to move higher in the immediate term, but these attempts can get arrested at Rs 420. Short-term investors should exit JP Associates if the stock fails to move above this level. Supports for the near-term are at Rs 300 and then Rs 275.

I hold shares of KEC Infrastructure bought at Rs 43.

Kindly suggest your technical view on this stock. Mithun. R

KEC Infrastructure (Rs 31.2): This stock went through a very volatile phase between November 2007 and January 2008, when it moved up from Rs 28 to Rs 57 and then crashed all the way back to Rs 29.

The steep fall witnessed in the second week of January implies that KEC Infrastructure might not get back to its recent highs of Rs 57 any time within the next one year.

The stock is currently halting at its long-term 200-day moving average line at Rs 31. But the stock can move lower towards Rs 27 or Rs 25 in the near-term.

Any rally in the stock would face resistance at Rs 40 or Rs 42.

Short-term investors should exit the stock if it slides below Rs 27.

I want to know the future prospects of Mysore Cement purchased at Rs 62 and Saurashtra Cement purchased at Rs 72. Please mention your targets for the short- and long-term for these stocks. P. Ramulu

Mysore Cement (Rs 41.5): Mysore Cements is in a long-term consolidation phase that is making the stock move in a broad band between Rs 40 and Rs 70 since June 2006. The stock is currently close to the lower boundary of this sideways range.

The immediate long-term support for the stock is present at Rs 37 and the next support is at Rs 30.

Long-term investors can hold the stock with a stop at Rs 29.

Strong resistance is present in the zone between Rs 65 and Rs 70, which will provide the ceiling over the next one-year.

The near-term support for the stock is present at Rs 37. However, we do not envisage a rally beyond Rs 53 in Mysore Cement over the next three months.

Saurashtra Cement (Rs 45.6): This stock has been moving southwards since May 2006. Since this period, it has been charting a descending triangle pattern that has bearish implications.

Saurashtra Cement is currently hovering just above its long-term support at Rs 43. Two or more weekly closes below this support can, however, pull the stock lower towards the next long-term target at Rs 25.

The near-term outlook for the stock is bleak. Saurashtra Cement may vacillate in the band between Rs 40 and Rs 45 for a few more months.

Any move beyond this will take the stock to Rs 55 or Rs 58. Short-term investors can offload their holdings if the stock fails to move beyond these resistances.

I purchased Unitech at Rs 500 and Vikas WSP at an average price of Rs 60. Please let me have your view on these stocks. J. Srinivasa Rao

Unitech (Rs 351): The long-term bull market in Unitech that began towards the end of 2005 continues to be in full force.

Though the stock is currently in an intermediate-term correction, it is halting above the key support at Rs 340. A reversal from this area would re-affirm the positive long-term outlook for the stock. However, stop loss for long-term investors ought to be way lower at Rs 260.

The stock, however, appears weak over the near-term. It could slide lower to the support area between Rs 330 and Rs 340 in this period, where short-term investors will have the option to cherry pick.

Vikas WSP (Rs 41.7): The controversial stock, Vikas WSP was re-listed on the bourses at Rs 38 in August 2007.

The stock has since then been fluctuating in a trading band between Rs 40 and Rs 75. The immediate-support for the stock is the re-listing price. Fall below this level would drag the stock lower to Rs 32.

Short-term investors can exit the stock if it dips below Rs 38. Near-term resistances are at Rs 54 and then at Rs 60.

Please let me know the short- and long-term targets of Reliance Petroleum. Giriprasad Chandraguthi

Reliance Petroleum (Rs 163): Reliance Petroleum has been on a long-term down trend since the peak at Rs 295, which was recorded in November 2007. The third leg of this down-move unfolded in January and dragged the stock price to a low of Rs 108. However, the fall to this trough on January 22 can be considered an aberration since the stock recovered the same day to close at Rs 146.

The long-term outlook for Reliance Petroleum will stay positive as long as it remains above Rs 145.

There is a confluence of supports in the band between Rs 145 and Rs 150, due to the presence of both the long-term trend line as well as the long-term 200-day moving average in this band.

Reliance Petroleum can consolidate in the band between Rs 150 and Rs 210 for a few months before resuming its upward trajectory. However, a close below Rs 145 would mean that the stock price is heading down towards Rs 100.

Short-term resistances would be experienced at Rs 180 and then Rs 210. Investors with a short horizon can exit the stock at either of these levels.

The stock needs to move beyond the second resistance to clear the way for a surge to its previous life high.

Please tell me the future prospects of Cipla bought at Rs 208. Can I hold it for six months? M. Ramesh Chandra

Cipla (Rs 195.3): Cipla has been in a long-term bear market since April 2006. The stock charted a three-phased fall between this peak and August 2007 that has retraced more than 50 per cent of the gains recorded since 2003. Cipla is currently trying to form a base in the zone between Rs 150 and Rs 180 that is a long-term support band for this stock.

Long-term investors can accumulate the stock in this band.

The medium-term outlook for the stock is neutral. It can vacillate in the range between Rs 160 and Rs 220 for a few months before any definitive move in either direction. Traders can use this range to trade the stock. Short-term investors can divest their holdings near the upper band of this trading range.

The stock price needs to move past Rs 250 to indicate that it is heading towards a new high again.

— Lokeshwarri S.K.

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