The Hindu Business Line : Upside potential in ITC

ITC (Rs 694.15): Contrary to expectations, the scrip managed to stay firm. The overall outlook for ITC continues to remain positive with a move to the Rs 745-750 range being a distinct possibility. A move past Rs 705 would have positive implications while a drop below Rs 672 would negate positive outlook. Existing holders could remain invested while a move above Rs 705 could be used to take long positions.

Hindustan Lever (Rs 157.4): As anticipated, the share price of the company ruled firm and managed to move to the target zone of Rs 155-158 that was mentioned last week. The near-term outlook appears weak. Only a close above Rs 160 would impart bullish trend. Existing holders could book profit while fresh buying may be considered on a close above Rs 160.

Satyam Computers (Rs 167.5): The overall outlook remains bearish. A drop below Rs 154 would have negative implications and could pave the way for a drop towards Rs 100. Only a close above Rs 180 would warrant a reassessment of the bearish outlook. Existing holders could reduce exposures while a drop below Rs 154 could be used to take short positions.

Reliance Industries (Rs 298.95): As expected earlier (refer edition dated March 16), the share price of the company dropped to Rs 260-265 and reversed direction thereafter. The near-term outlook now appears positive. A move towards the Rs 345-350 range appears to be on the cards. Existing holders could remain invested with a stop loss at Rs 280. A move above Rs 307 could be used to take fresh long positions. Drop below Rs 280 would blunt the positive outlook and would warrant dilution of long positions.

Tata Steel (Rs 157.8): As observed earlier (refer edition dated March 16), the share price of the company dropped to the then mentioned target zone of Rs 120-125. After touching a low of Rs 125.65, the scrip has staged a sharp recovery in the past couple of weeks. The overall outlook remains bullish with a test of the Rs 180-185 range on the cards. Existing holders could remain invested with a stop loss at Rs 140. Price dips could be used to take exposures with a stop loss at Rs 140.

Focus: The outlook for a few small and mid-cap stocks appears positive. The likes of Apollo Tyres, Bongaigaon Refineries, Hindustan Motors, India Cements, Amara Raja Batteries, Orchid Chemicals and Indian Rayon appear to have an upside potential of at least 25-30 per cent from current levels. Investors willing to take delivery could take exposure in these companies.

Hindustan Motors (Rs 12.25): The share price of the company could comfortably sail past Rs 20 in the near term. Existing holders could remain invested with a stop loss at Rs 8.4. Fresh buying may also be considered by investors willing to take additional risk. A drop below Rs 8.4 would warrant reduction of exposures.

Recommendation follow-up

Siltap Chemicals (Rs 57.05): After a mid-week decline, the scrip managed to stage a sharp comeback in the last couple of days. The scrip appears to be on course to move towards the price target of Rs 64-66 mentioned last week. Existing holders could remain invested while fresh buying may be considered with a stop loss at Rs 52.

Mahindra & Mahindra (Rs 129.2): The stock was confined to a narrow trading range last week. Last week's view that the scrip could head towards the Rs 150 mark continues to remain valid. Existing holders could remain invested with a stop loss at Rs 120. A move above Rs 134 could be used to take fresh exposures with a stop loss at Rs 126.

(Note: The analysis and opinion expressed in these columns are based on the technical analysis of the past price behaviour. Analysis and price targets are based on the Elliott Wave Analysis. There is a risk of loss in trading)

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