The Hindu Business Line : Query Corner: Exit from Vishal Info and Austral Coke

The stock reversed higher from the first support twice over the past four months. Investors with a medium-term perspective can therefore hold the stock with a stop at Rs 290.

Once the third leg of the up-move from November low takes off the stock can move on to Rs 514 or Rs 550 over the medium-term. NMDC faces strong long-term resistance in the zone between Rs 520 and Rs 550.

Inability to surpass this zone will result in the stock moving in the band between Rs 300 and Rs 500 for a few more months. Long-term target on a break-out above Rs 550 is Rs 657.

I am holding shares of Reliance Natural Resources Ltd (RNRL) purchased at Rs 95. I want to know the short-term target for this stock. R. Kailash

RNRL (Rs 72.3): The post-election surge in RNRL stopped at the peak of Rs 112 in June and the stock has been in a medium-term correction since then.

The stock faces key medium-term resistance at Rs 116 and this level needs to be surpassed to signal that the stock is free from the bear’s grip and could move on to the next long-term targets of Rs 142 or Rs 167.

However investors ought to stay cautious as long as the stock trades below Rs 116. Inability to penetrate this level would denote that a long-drawn sideways move between Rs 50 and Rs 100 is possible over the ensuing months.Short-term traders should divest the stock on a decline below Rs 60. Short-term targets for the stock are Rs 80 and then Rs 92.

I am holding Asian Electronics purchased at Rs 276 and Omaxe at Rs 375. Please let me know whether to hold or sell these stocks. Mohanan

Asian Electronics (Rs 34.6): Asian Electronics was decimated in the crash of 2008 when the stock fell from Rs 590 to Rs 21 in just eleven months. The recovery since March is very tentative and the stock is yet to reverse its medium-term down-trend.

The stock could struggle to move above the resistance at Rs 50 in the near term. If this level is surpassed, subsequent targets are Rs 73 and Rs 107. The long-term view will turn positive only on a weekly close above Rs 107.

Since the stock is ruling well below your cost price, you can consider switching out of this stock at current levels and re-entering on a firm close above Rs 107.

The other alternative would be to hold with a stop at Rs 30 and wait for a rally to exit the stock.

Omaxe (Rs 99.3): Omaxe too is trading well below your cost price but the stock is relatively more steady and the medium-term chart pattern indicates that the stock could move higher.

Investors can therefore hold the stock with a stop at Rs 76. Upper targets for the next 12 months are Rs 173 and Rs 260.

I am holding shares of Ambuja Cements and Austral Coke and Projects. Please let me know the medium-term outlook of these shares. Jagdish Kumar Gillon

Ambuja Cements (Rs 85.8): The rebound from the October trough of Rs 43 in Ambuja Cements has halted close to the key intermediate-term resistance of Rs 116. The stock is currently correcting the move from the low of Rs 43 to Rs 112 recorded this year.

This correction can halt around Rs 85 or Rs 70. If the decline halts at the first target, a sideways move between Rs 85 and Rs 115 can ensue for a few more weeks that will be followed by another break-out higher to Rs 129 and then Rs 161.

Investors with a short to medium-term perspective should therefore hold the stock with a stop at Rs 81. Long-term investors can however hold with a deeper stop at Rs 69.

Austral Coke and Projects (Rs 10.4): The long as well as medium-term trend in Austral Coke is down. This stock has been spiralling downward in a horrendous manner, from one lower circuit to another. There is no sign of reversal in the charts yet and a move lower to the former trough of Rs 6.2 can not be ruled out. Investors are advised to switch out of this stock at the first opportunity.

Please give your outlook on Amtek India and Prism Cement. Suresh Pai

Amtek India (Rs 49.6): The intermediate-term up-trend that began from the December low of Rs 17 continues to be in force in Amtek India. But the stock faces key resistance at Rs 78 in the near-term. The current up-trend could struggle to move beyond this resistance over the next three months. If it does so, subsequent targets are Rs 90 and Rs 112.

Investors with a short-term perspective can hold the stock with a stop at Rs 41 while medium-term investors can hold with a deeper stop at Rs 31.

Prism Cement (Rs 39.8): The decline that began from the June peak of Rs 60 halted at Rs 36 after the stock retraced exactly half of the gains made in the rally from the March lows.

Key short-term support for the stock is at Rs 31 and investors can hold the stock as long as it trades above this level. The stock can move higher to Rs 46 or Rs 51 in the near-term. Failure to move beyond these levels will imply that the down-trend will continue in the stock to drag it towards Rs 31 again.

I have bought Reliance Capital at Rs 900. What is the future outlook for this stock? Viresh

Reliance Capital (Rs 822.7): In our review of Reliance Capital in April this year we had indicated that a long-term trough had been formed at the low of Rs 274 in March. We had also expected the ceiling for the ensuing three months between Rs 800 and Rs 850.

The stock shot past this target in the rally of May and June to record the peak of Rs 1,066. But there has been no further headway over the last four months and the stock has been moving sideways in the band between Rs 700 and Rs 1,000 since then.

This sideways movement will be construed as a halt in stock’s intermediate-term up-move before it resumes to take the stock price higher to Rs 1,300 or Rs 1,460 over the medium-term. Ceiling for the next 12 months is likely to be Rs 1,925. Short-term investors can hold with stop at Rs 670. Long term investors can hold as long as the stock trades above Rs 500.

I am holding Vishal Information Technologies purchased at Rs 15. Please give your opinion about this stock. John Paul

Vishal InformationTechnologies (Rs 12.5): This stock continues to be in a short and medium term down-trend. The fact that this stock has been declining steadily since this June while most of the other mid and small-cap stocks have been soaring skyward implies that the short-term outlook is extremely bleak and a decline to its all-time low of Rs 9 can not be ruled out. Investors are advised to switch out of this stock at this juncture.

— Lokeshwarri S.K.

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