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I purchased Jindal Poly Films at Rs 278 and Smartlink Network at Rs 70. What is the future of these stocks?
Mohan Guruvayoor
Jindal Poly Films (Rs 217.4): Jindal Poly Films has been on an intermediate-term downtrend forming lower peaks and lower troughs, since peaking out at Rs 700 in October 2010. However, the stock is trading just above its long-term support band between Rs 195 and Rs 205.
A reversal from this key support band can push the stock higher to Rs 245 and then to Rs 285 in the ensuing months. Next resistances are at Rs 330 and Rs 400. Only a strong move above Rs 400 will mitigate the downtrend and take the stock higher to Rs 500 and Rs 550 range.
Both medium- and short-term trends are also down for the stock. Investors with medium- and short-term perspective should exit the stock on an emphatic fall below Rs 195. The stock will then reinforce its downtrend and decline to Rs 160 and then to Rs 120 in the medium-term.
Smartlink Network Systems (Rs 40): After encountering long-term resistance at around Rs 100 in late May this year, the stock nosedived steeply resuming its longer-term downtrend, which has been in place since 2004 peak of Rs 235.
Nevertheless, the stock is now testing its long-term base at around Rs 40. If this support holds, the stock can move higher to the resistances at Rs 50 and then Rs 60. Failure to move above the first resistance or a decisive fall below the current support level will be cue for long-term investors to exit the stock.
The stock can prolong its decline to Rs 30 and then to Rs 26. A tumble below these supports will pave the way for a decline below Rs 10 in the medium term. The stock has key resistances at Rs 70, Rs 80 and then Rs 90.
Please let me know short- and long-term prospectus of Genus Power and Hindustan Zinc.
N.P. Ghamande
Genus Power Infrastructures (Rs 13.8): Long-term trend is down from the stock from its life-time high of Rs 82 recorded in January 2008. The stock's significant long-term resistance — June 2009 peak at Rs 28 — halted it from moving beyond this level in November 2010. Since then, it has been on an intermediate-term downtrend.
In mid-June this year, the stock encountered resistance at Rs 20 and resumed its downtrend. However, the stock is currently testing its long-term support at around Rs 13.2. Emphatic dive below this support will pull the stock down to Rs 10, and then to Rs 6, in the upcoming months.
On the other hand, a rebound from the aforementioned support can be short-lived. It will encounter resistance initially at Rs 16, and then at Rs 20. Only a strong jump above Rs 20 can lift the stock higher to Rs 24 and then to Rs 27.
Hindustan Zinc (Rs 123.9): Hindustan Zinc has been on a structural bull-run, after bottoming out in October 2008 low of Rs 21.5. As long as the stock trades above its long-term support band between Rs 100 and Rs 105, its long-term outlook remains bullish.
It can trend higher to Rs 140 and Rs 155 in the long-term. Nevertheless, a conclusive weekly close below this support band will take the stock down to Rs 88 initially, and then to Rs 70-73 range.
Medium-term trend is down from its all-time high of Rs 155 registered this April. The stock recently penetrated its key support at Rs 130, which had consistently provided support between May and July.
Nonetheless, its short-term decline appears to have found support at Rs 120. Fall below this level will test its long-term support band between Rs 100 and Rs 105. Only a forceful break through of Rs 130 will take the stock higher to Rs 140 in the medium-term.
I am trying to accumulate Unitech over the last two months. Please let me know its prospects.
Y.K. Prakash
Unitech (Rs 26.5): Unitech has been on a longer-term downtrend since its life-time high of Rs 546 marked in January 2008. In September 2009, it encountered resistance at around Rs 118 and resumed its long-term downtrend. In all time frames, the stock is in a downtrend.
However, it is trading just above its long-term support range between Rs 22 and Rs 24, from which it had bottomed out in March 2008. Also, we notice the formation of a falling wedge pattern spanning since this March. This could act as a bullish reversal pattern in this scenario.
A reversal from the aforementioned support range will take the stock higher to Rs 36-38 band and then to Rs 50 in the intermediate-term. Strong move above Rs 50 can take the stock higher to Rs 60 and then to Rs 70 in the long-term. But inability to rally beyond the band will arrest the stock between Rs 22-Rs 38. Fall below Rs 22 can drive the stock down to Rs 15 and Rs 10 in the long-term.
Kindly give short-term outlook on JVL Agro and Lloyds Steel.
Ladikramani P.U.
JVL Agro Industries (Rs 15.3): The stock moved up from one circuit to another during its 2010 rally from around Rs 10 in March until it encountered resistance at Rs 45 in October 2010. In the same fashion, the stock started to decline.
Since last October, the stock has been on an intermediate-term downtrend. From the May peak of Rs 31, the stock has been on a medium-term downtrend.
Last week, the stock plunged 15 per cent, conclusively breaking through its long-term base at Rs 17. This decline has strengthened the stock's downtrend and it can decline to Rs 10-12 band in the months ahead.
Decisive fall below this band will drag the stock down to Rs 7.5 or Rs 5 in the long-term. Investors should exit this stock in rallies. It can encounter resistances at Rs 17, Rs 20 and Rs 24.
Lloyds Steel Industries (Rs 13.7): After bottoming out at around Rs 4 in first quarter of 2009, the stock trended higher until it met with a key resistance at around Rs 22.5 in January. Testing this resistance in April, the stock changed its direction.
It has been on a medium-term downtrend since then. The stock emphatically penetrated its twin support, uptrend line and key support at around Rs 15 by declining nine per cent last week.
Its downtrend will prolong until it finds support at Rs 12-12.5 band in the short- to medium-term.
Strong breakthrough of this support band will drag the stock down to Rs 10 or even to Rs 7.5 levels in the long-term. Key resistances are positioned at Rs 15, Rs 17.5 and Rs 20.
I purchased Kernex Microsystems at Rs 186. Now, it is trading between Rs 90 and Rs 100. Should I hold it for long term or otherwise?
M. Muthu
Kernex Microsystems India (Rs 93): The stock has been on a long-term downtrend from its August 2007 peak of Rs 339.
In January this year, the stock met with resistance at around Rs 170 and resumed its downtrend. Since then it has been on intermediate-term downtrend.
Long-term outlook is negative for the stock. A breakthrough of its immediate support at Rs 87 can pull it down to Rs 75, and then to Rs 50 in the long-term.
An up move from its immediate resistance will be a corrective up move and will encounter resistances at Rs 103 and then at Rs 118. Decisive rally above Rs 125 is required to mitigate the stock's intermediate-term downtrend and to lift it to Rs 140 and to Rs 160. Exit from the stock.
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