Query Corner

Is this is the right time to enter into the stock of Crompton Greaves? Please advise.

Achintya Basu

Crompton Greaves (Rs 124.6): Crompton Greaves continues to be in a long-term downtrend that started from the December 2010 peak of Rs 349. However, the stock has been on a medium-term uptrend since August trough at Rs 75. It needs to break above the significant long-term resistance at Rs 140 to show some signs of bullishness. Therefore, investors with a medium-term perspective can consider buying the stock once it moves above this resistance level. Subsequent targets are Rs 160 and Rs 180. Important long-tem hurdle is at Rs 210.

Inability to rally above Rs 140 will result in the stock moving sideways in the band between Rs 100 and Rs 140. But, a decisive fall below Rs 100 will reinforce the long-term downtrend and pull the stock down to Rs 75.

I am holding Bharti Airtel bought at Rs 331 and Coal India at Rs 292. What are the short-term prospects of these stocks?

Sanjeev

Bharti Airtel (Rs 328.8): Bharti Airtel is a vacillating stock and its short-term trend keeps changing frequently. After encountering significant long-term resistance at Rs 370 in early November 2013, the stock started declining. Since then, the stock has been on a short-term downtrend. Last week, key resistance at Rs 340 restricted the stock from climbing higher. Continuation of the short-term downtrend can test the support at Rs 315 in the ensuing weeks.

A further decline below Rs 315 will strengthen the downtrend and pull the stock down to Rs 300 or even to Rs 280 levels in the coming months. Conversely, the stock needs to break the resistance at Rs 340 for an up move to Rs 355 and Rs 370.

Coal India (Rs 277.7): Since September 2012, Coal India has been on an intermediate-term downtrend, forming lower peaks and troughs. But, in the short-term, the stock has been in a sideways consolidation trend. It has been broadly moving in the range between Rs 265 and Rs 300 from September 2013.

Short-term investors can consider holding the stock with a stop-loss at Rs 265. A strong break above Rs 300 can pave way for a rally to Rs 320 and then to Rs 340. Nevertheless, a decisive fall below Rs 265 can take the stock lower to Rs 250. Failure to hold above Rs 250 can drag the stock to a new low.

I am holding India Glycols bought at Rs 164. How will the stock perform in medium- to long-term?

Gopinath

India Glycols (Rs 103.9): The stock has been on a long-term downtrend since its October 2012 peak of Rs 226. Within this downtrend, the stock found support at Rs 85 in August 2013 and started to move sideways in the band between Rs 85 and Rs 110. Since then, the support at Rs 85 has been providing base for the stock. However, it will be pre-mature to say that the stock has formed a medium-term trough.

The stock needs to clear the immediate resistance at Rs 110 initially and then at Rs 125. Inability to move above Rs 110 can extend the stock’s sideways movement in the medium-term. Significant resistances above Rs 125 are pegged at Rs 140 and Rs 160. To alter the downtrend, the stock needs to emphatically rally above its key long-term resistance at Rs 160. The stock can then move up to Rs 180 and Rs 200.

On the other hand, a conclusive decline below Rs 85 will strengthen the downtrend and pull the stock down to Rs 70 or even to Rs 55 in the long-term.

Please give me the short-, medium- and long-term view on Globus Spirits and Tube Investments of India.

Praveen

Globus Spirits (Rs 84.8): The stock is in downtrend across all time frames — short, medium and long. After encountering resistance at Rs 105 in early November 2013, the stock resumed its long-term downtrend. Since then, the short-term trend has been down. A decisive fall below the immediate support at Rs 80 can drag the stock lower to Rs 70 in the short- to medium-term. Further decline below Rs 70 can see the stock register new lows.

Immediate key resistances are at Rs 95 and Rs 105. The stock needs to move above Rs 105 to alter the medium-term downtrend. Next important resistances are at Rs 120 and Rs 130. For long-term downtrend to reverse, the stock has to move above Rs 150.

Tube Investments of India (Rs 153.8): Long-term trend in the stock is up, whereas medium- and short-term trends are down. As long as the stock trades above Rs 120, its long-term uptrend will remain in place. Targets are Rs 175 and Rs 200. However, a fall below Rs 120 will mitigate the uptrend and drag the stock down to Rs 100.

A fall below the immediate support at Rs 150 will pull the stock down to Rs 140 and then Rs 130. Important resistances are at Rs 165 and Rs 180.

Is it the right time to buy City Union Bank? What is the medium-term target?

CH. Viswanath

City Union Bank (Rs 50.7): City Union Bank has given good returns in the long-term. Since early 2009 low of Rs 8.2, the stock has been on a long-term uptrend. It is also in a short-term uptrend. Intermediate corrections can be used to buy the stock with a stop-loss at Rs 42. As long as the stock trades above Rs 42, it has the possibility to move to Rs 55 and then Rs 60 in the medium-term.

But, a strong fall below Rs 42 will pave way for a decline to Rs 38 or to Rs 33 in the medium-term. The stock has significant long-term support band in the range between Rs 30 and Rs 33. Long-term target is Rs 66.

Yoganand D.

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