The Hindu Business Line : Query Corner: What the charts say

This trend however turned negative in October when it penetrated the key long-term support at Rs 246. The worrying factor is that the stock has declined below its October low at Rs 134 thus establishing a weak short as well as medium-term trend.

Next long-term support band on the charts is between Rs 100 and Rs 120. The long-term trend-line at Rs 80 will be the next support.

The possibility of a decline to Rs 80 remains open unless Rolta records a weekly close above Rs 160.

Next resistance is at Rs 207. Investors can hold with a stop at Rs 100 and try to divest their holdings in rallies.

Tata Teleservices Maharashtra (Rs 20.45): TTML formed a trough at Rs 12.5 on October 27 and is up 60 per cent from there.

The short-term trend in the stock is currently up and the current move can extend to take it higher up to Rs 26 or Rs 28 in the near future. Investors with a short-term perspective can hold the stock with a stop at Rs 17.5.

The long-term trend in the stock could also have reversed since TTML is moving up from significant support level. Long-term investors can hold the stock as long as it holds above Rs 12. A rally to Rs 32 is possible over the next couple of years.

I am holding Nava Bharat Ventures purchased around Rs 240 and Chennai Petro purchased at Rs 300. Should I hold or book loss? Subur Basha

Nava Bharat Ventures (Rs117.05):

This stock declined to the long-term support at Rs 115 towards the end of October. But the long-term trend-line currently positioned at Rs 100 has not been penetrated yet.

The area around Rs 100 will also be a psychological support for the stock. Investors can hold the stock with a stop below the recent trough at Rs 90.

A short-term uptrend is currently in progress in the stock that can take it higher to Rs 150 or Rs 173.

Short-term investors can hold the stock with a higher stop at Rs 104. Key resistance level for the year ahead would be at Rs 190. Investors should divest part of their holdings on a failure to surpass this level.

Chennai Petroleum (Rs 117.05): In our previous review of this stock in September, we had expected it to recover from the support at Rs 250 and to move higher towards Rs 330 again.

Chennai Petroleum breached this support in the October crash and is currently attempting a recovery from the area around Rs 100. Hold the stock with a stop at Rs 98. There can be a rally to Rs 142 or Rs 185 next year where part of the holdings can be divested. Medium-term outlook for the stock will turn positive only on a weekly close above Rs 195.

I am holding MIC Electronics bought at Rs 39. When should I book profit in this stock? Ajith Bokdia

MIC Electronics (Rs 35.30): This stock has witnessed a very severe correction in September and October when the price tumbled from Rs 147 to Rs 33. MIC Electronics is trying to form a base around Rs 35; moving in a sideways range between Rs 32 and Rs 50 since late October.

Short-term resistances are at Rs 45 and then Rs 53. Investors with a short investment horizon can book profit at either of these levels. The stock can however move to Rs 76 over the next year.

Medium-term view for the stock will turn positive only when this level is penetrated emphatically. Stop loss for both short as well as medium term investors can be at Rs 30.

I am holding shares of Micro Inks purchased at Rs 245. Kindly tell me the outlook for this stock. Sunil

Micro Inks (Rs 99.50): The structural up-trend that began in 1998 in Micro Inks ended this year when the stock declined below Rs 200 this September.

There has been a steep erosion in the stock price since then and it finally bottomed at Rs 87 towards the end of October.

The recovery since this trough is not strong enough to signal that the worst is over for the stock. The decline can resume to take the stock lower towards the next support at Rs 60.

Investors can hold the stock with a stop at Rs 85 and try to exit in rallies to 150 or Rs 180 over the next year.

An alternate strategy would be to sell the stock at current levels and re-invest once it records a weekly close above Rs 200.

I have purchased shares of EIH at Rs 135 per share. Please let me know the prospects of this share and at what rate I can exit it. Mantha Rama Devi

EIH (Rs 125): In early November, the stock found support at the long-term support band between Rs 68 and Rs 74 and commenced to trend up. EIH has been on a medium-term up-trend since then.

This up-trend can prolong higher to the key resistance level at Rs 160.

A weekly close above Rs 160 can take the stock to Rs 240 in the long-term. Conversely, failure to surpass Rs 160 can drag the stock down to Rs 115.

Investors with long-term perspective can hold the stock as long as it trades above the long-term support range with stop-loss at Rs 65.

Medium-term investors can book profit on part of their holdings at around Rs 160 and hold the rest with stop loss at Rs 112.

Please tell me the technical outlook of Nicolas Piramal (listed as Piramal Healthcare) and Madhucon Projects. Would it be wise to enter these stocks at the current price from a 1-3 month trading perspective? Jagjit Singh

Piramal Healthcare (Rs 232.95):

The stock was on a long-term bull market from its June 2006 low of Rs 150 to its June 2008 high of Rs 388.

After encountering resistance in June 2008, the stock reversed direction.

It has been on an intermediate-term down-trend, forming lower troughs and lower peaks since then. We believe that the stock is currently on a corrective up move from the support level at Rs 200.

A significant long-term resistance is present at Rs 280. As there is a possibility of the stock resuming its intermediate-term down-trend anywhere between Rs 260 and 280, we advise investors not to enter at current price level.

The stock can touch its June 2006 low, if it tumbles below Rs 200 on weekly basis.

Madhucon Projects (Rs 74.05): This stock has been on a long-term downward-trend from its life-time high of Rs 869 recorded in January. In September this down-trend accelerated after penetrating the support level at Rs 200.

The decline finally halted at Rs 41 that coincides with the consolidation band recorded in September 2004. The stock appears to have bottomed out from a medium-term perspective.

The stock has surged 77 per cent from its recent low. Medium-term forecast for the stock is bullish.

Immediate resistance is at Rs 140 and then Rs 170. Both long and medium-term investors can enter the stock with stop-loss at Rs 38 and 56 respectively.

Lokeshwarri S.K.
Yoganand D.

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