I have Infrastructure Development Finance Company (IDFC) shares bought at Rs 150 and Hindustan Construction at an average price of Rs 29. Please advise the medium- and long- term targets for these stocks.

Nirnimesh Bhansali

IDFC (Rs 121.1): IDFC formed a double-top at Rs 218 in November 2010 and is in a sharp slide lower since then. This slide is finding support in the key medium-term support zone between Rs 100 and Rs 112. Investors can hold the stock as long as it trades above Rs 100. Rebound from this zone will maintain the structural uptrend that began in the first quarter of 2009.

Investors with higher risk-taking ability can consider buying the stock at current levels with stop at Rs 100. It can move up to Rs 148 or Rs 176 in the ensuing months. The stock will continue to face strong hurdle in the band between Rs 220 and Rs 236 and investors can book partial profits when the stock nears this range. However, target on a breach of this band is Rs 274.

Conversely, decline below Rs 100 can pull the stock all the way down to Rs 70.

Hindustan Construction Company (Rs 26.4): This stock faces long-term resistance around Rs 85 and it reversed just under this level in January 2010. The stock went on to breach its medium-term support at Rs 40 in April and it is currently trading well below this level. Both short- and medium-term trends in the stock are currently down. The stock could slip lower towards its January 2009 low of Rs 14 in the days ahead.

Investors who continue to hold the stock can do so as long as it trades above this long-term support at Rs 14. Key short-term resistance is at Rs 40. Medium-term resistances will be at Rs 47 and Rs 61.

Please let me know the short-, medium- and long-term targets for Gujarat NRE Coke.

Bhaskar Parab

Gujarat NRE Coke: (Rs 24.2): In our review of this stock in February, we had written that key support for the stock was at Rs 46 and investors with long-term perspective can hold the stock as long as it trades above this level. We had also written that target on a decline below Rs 46 was Rs 16.8.

The stock crashed below Rs 46 in August this year, and has fallen precipitously since then to the recent trough at Rs 20.6. Next reliable support for the stock is the March 2009 trough at Rs 16.8. Investors holding the stock can continue to do so as long as it holds above this level. Short-term stop loss can be Rs 20.

Short-term resistances are at Rs 30, and then at Rs 36. Investors with short-term perspective can divest their holdings if the stock struggles to get past these levels. Medium-term resistance would be at Rs 49 and then Rs 58. Long-term trend will turn positive only if the stock manages to move past Rs 87.

Kindly inform the long-term prospects of Surya Pharmaceutical and Orient Paper and Industries.

Anil

Surya Pharmaceutical (Rs 15.7): Long-term trend in Surya Pharmaceutical is up since the trough recorded in March 2009. Though the stock is in a medium-term downtrend since last November's peak of Rs 35, it is halting at the key medium-term support band between Rs 15 and Rs 16.5. Investors can hold the stock as long as it trades above this band. The stop-loss can be placed slightly lower at Rs 14.

Recovery from this level can take the stock higher to Rs 23 or Rs 28 over the ensuing months. Long-term target on a break above Rs 35 is Rs 45. Investors should, however, be aware that a crash below Rs 15 can result in the stock declining very sharply to Rs 10 or Rs 8.

Orient Paper and Industries (Rs 59.6): This stock is in a secular uptrend since the trough at Rs 16.9 formed in December 2008. One leg of this up-move was completed at the April 2010 peak of Rs 66, and the stock is moving sideways between Rs 45 and Rs 67 since then. The stock faces long-term resistance in the zone between Rs 60 and Rs 65, and it has made multiple efforts to get past this zone since April 2010. Targets on a break above this zone are Rs 85 and Rs 112.

Medium-term supports for the stock are at Rs 42 and Rs 36. Investors can hold the stock as long as it trades above the second support.

Please let me know the long-term outlook of Moser Baer bought at Rs 23.

Parrivel

Moser Baer India (Rs 27.8): Moser Baer is in a very strong structural downtrend. It had long-term support in the range between Rs 40 and Rs 45, where it formed troughs in 2002 and in 2009. This support zone was penetrated in August, and the stock is currently trading 35 per cent below this band. Immediate support for the stock is at Rs 17, and investors can use that as a stop-loss. However, decline below this level will pull the stock to Rs 5.

Investors should resist the temptation to buy this stock or to add to their current holding since it has not reversed emphatically yet. Risk-averse investors can consider purchasing this stock only on a close above Rs 40. Subsequent resistances are at Rs 100 and Rs 143.

I want to buy Adani Power with 4-5 year perspective. What does your chart suggest?

Chandan Bhurat

Adani Power (Rs 83.7): There is not much that can be gauged from Adani Power's charts regarding the prospects for the next 4-5 years since the stock has only two-year history. The structural trend in the stock is down since it is currently trading close to its life-time low.

The stock can be bought at current level with stop-loss at Rs 70. But this advise is only for investors with a higher degree of risk taking ability. Risk averse investors can wait for the stock to close strongly above Rs 108 before venturing to accumulate it. Subsequent targets would be Rs 110 and Rs 118.

Medium-term view will turn positive only on a close above Rs 118, paving the way for a shy at its previous peak of Rs 144. Investors should, however, keep off this stock if it declines below Rs 70 since it is hard to know where the next halt can be.

Please give your long-term views on Pipavav Defence and Offshore Engineering Company.

Kavita

Pipavav Defence (Rs 85.1): Pipavav Defence was listed only two years ago and hence does not have sufficient history to help us understand its long-term prospects. It has been moving in the band between Rs 62 and Rs 92 since December 2010. Investors can hold the stock with stop at Rs 60. They can also use declines to the area close to Rs 60 to accumulate the stock with stop at Rs 55.

The stock will face resistance in the zone between Rs 90 and Rs 95 in the months ahead. Once this barrier is crossed, the stock can head towards its previous peak of Rs 120.

Readers can send in their queries, on not more than two companies, to >techtrail@thehindu.co.in Queries can also be sent by post to: Tech Trail, 859/860 Kasturi Buildings, Anna Salai, Chennai 600002. We would endeavour to answer as many queries as possible. However, constraints of space will limit the responses featured under this column.

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