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I have bought shares of Larsen & Toubro (L&T) at ₹1,342. What is the outlook for this stock? Should I hold it or book profits?
Subramani
L&T (₹2,154.3): The stock of Larsen & Toubro (L&T) is in a strong uptrend. Strong support is in the ₹2,050-2,000 region. A fall below ₹2,000 looks unlikely. As long as L&T sustains above ₹2,000, the uptrend will remain intact. So, definitely this is not the time to exit this stock. But at the same time, it is also important to protect your profits at this point of time.
L&T has potential to target ₹2,600-2,700 over the next two to four quarters. Keep a stop-loss at ₹1,960 and hold the stock. Move the stop-loss up to ₹2,120, when L&T rallies to ₹2,350. Revise the stop-loss further up to ₹2,380 when the stock touches ₹2,450. Exit the stock at ₹2,550. The outlook will turn negative only if L&T breaks below ₹2,000. In that case, a test of ₹1,900-1,800 is possible thereafter. However, a break below ₹2,000 might not be very easy.
I have shares of Marico. My average purchase price is ₹505. What is the short-term outlook for this stock?
A Shiek Peer, Madurai
Marico (₹523.6): The stock has gone nowhere in the last one year. Marico has been oscillating sideways between ₹450 and ₹560 since December last year. Within this range, the stock made a low of ₹481.80 by the end of November and has been moving up. The chances are high for the stock of Marico to move up towards ₹550-560 — the upper end of the range over the next one month. Structurally, the stock has been in an uptrend. So, the chances are high for Marico to break the range above ₹560. Such a break will take the stock up to ₹600 initially and ₹700 eventually over the long term. But will that breakout above ₹560 happen immediately or after spending some time within the ₹450-560 range is not very clear.
For now, you can wait and see if a break above ₹560 happens immediately. If Marico turns down from around ₹550 again, then exit 30 per cent of your holding. Wait for a fall and buy more at ₹480. Keep a stop-loss at ₹440. Trail the stop-loss up to ₹540 as soon as Marico moves up to ₹580. Revise the stop-loss higher to ₹610, when the stock touches ₹650. Exit at ₹680. If the stock breaks the range below ₹450, it can fall to ₹430-400 and even lower.
I have shares of Khaitan Chemicals & Fertilizers. My average purchase price is ₹90. Should I hold the stock or exit with a loss? What is the outlook?
Puneet Sharma
Khaitan Chemicals & Fertilizers (₹76.10): The stock has been in a strong downtrend since April this year. The price action on the weekly chart indicates that the stock could be forming a base between ₹70 and ₹80 since the last week of September. But the monthly chart is still looking weak. If the stock manages to breach ₹80 decisively, it will give an initial sign of a trend reversal. In that case a rise to ₹90-95 is possible. A strong follow-through rise above ₹95 will confirm a trend reversal and can take the stock up to ₹120 and even higher.
But in case the stock breaks below ₹70, there will be room to see a steeper fall to ₹60-55. If you can withstand the loss, then keep a stop-loss at ₹67 and hold it. Consider exiting 40 per cent of your holding at ₹93. Move the stop-loss up to ₹88 for the rest of the holding then. Exit the balance holdings at ₹115. On the other hand, if you cannot withstand more loss, then exit at current levels.
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