The Hindu Business Line : Query Corner

Please update on your outlook for Saw Pipes in the short and medium term. Please also advise whether to invest at present prices in pharma scrips such as Ranbaxy, Divi's Laboratories. — Gauri Shankar

The outlook for Saw Pipes (Rs 167.5) is positive. A move towards the Rs 195-200 range appears likely. Only a drop below Rs 150 would negate the bullish outlook. Existing holders could remain invested with a stop at Rs 150. Fresh buying may be considered on a move past Rs 180.

The outlook for Ranbaxy Laboratories (Rs 831) also appears bullish. However, the stock could see a sideways correction in the near term. Fresh buying may, therefore, be considered once the stock moves past Rs 880. A drop below Rs 740 would warrant liquidation of holdings in the company.

As far as Divi's Laboratories is concerned, the price history is inadequate to come to any sort of conclusion of the overall trend. The stock appears to be in the midst of a correction to the earlier uptrend. Only a move past Rs.610 would reinstate positive momentum in the stock.

I am holding Mastek, Aftek Infosys and J&K Bank. Can I hold them? — S.A.R. Krishnan

Mastek (Rs 325.15): The stock appears to have potential to seek slightly higher levels in the near term. A move to the 375-380 range appears likely in the next few weeks. Existing holders could remain invested with a stop loss at Rs 290. A move past Rs 340 could be used to take fresh exposures with a stop loss at Rs 305.

Aftek Infosys (Rs 289.45): The share price of this company too could scale higher levels in the near term. A move past Rs 310 would impart bullish trend and could pave the way for the Rs 330-340 range. A drop below Rs 266 would negate the bullish trend and could push the scrip to lower levels. A stop loss could be placed at Rs 266 for long positions.

J&K Bank (Rs 232.45): The overall trend for the stock appears positive. However, the stock could seek lower levels if it drops below to Rs 225. A break below Rs 225 could pave the way for a drop to the Rs 200-205 range. Remain invested with a stop loss at Rs 225. A move past Rs 255 could be used to take fresh long positions.

I hold shares in Sail, Reliance Industries and Ballarpur Industries. Please give your recommendation. — Praavin S. Warad

The outlook for Sail was covered last week (Edition dated July 6). That view remains unchanged. A move towards the Rs 23-25 range appears likely.

Reliance Industries (Rs 329.8): There appears to be limited upside potential for the stock from current levels. Existing holders could remain invested with a stop loss at Rs 315. Price upmoves could be used to dilute holdings. In the event of an upmove, trailing stop loss could be employed to protect unrealised gains.

The near-term outlook for Ballarpur Industries does not appear too positive. A drop to the Rs 40-43 range appears likely. Existing holders could dilute exposures. Technically, there is no compelling reason to take fresh exposures at the moment.

What is the outlook for Eicher Motors and Amaraja Batteries from investment perspective? — Sandhya

Eicher Motors (Rs 160.15): The overall outlook appears positive. A move towards the Rs 180-185 range appears likely. Existing holders could remain invested with a stop loss at Rs 138. A move past Rs 166 could be used to take fresh long positions.

Amara Raja Batteries (Rs 68.45): The overall outlook for the stock is positive. Existing holders could remain invested while a move past Rs 74 could be used to take fresh long positions. A move past Rs 80 could impart positive trend and could push the stock to the target zone of Rs 95-100.

I have shares of Zee. Shall I book profit or hold? I also have stake in Polaris. Shall I buy now and average the price? — Selva Kumar

Zee Telefilms (Rs 104.3): The stock appears to have some upside potential from current levels. A move towards the Rs 115-120 range appears likely. Existing holders could remain invested with a stop loss at Rs 98. Trailing stop loss could be employed to protect unrealised gains. Partial profit-booking may be considered on a move past Rs 120. There is no need to sell the holding in a distress.

The outlook for Polaris appears a bit hazy at the moment. There is no reason to take fresh long positions at current levels. It would be better to wait awhile before committing fresh funds in Polaris.

Please let me know the near-term outlook and prospects of Lyka Labs. — Aditya Samantaray

The overall outlook for Lyka Labs does not appear too positive at the moment. The scrip is in the midst of a downward correction, which does not appear complete as yet. A drop to the Rs 25-28 range appears likely. Fresh buying may be considered once the stock moves past Rs 38. For the moment, it would be better to stay away from the stock.

Please update your outlook on Hindalco that was covered earlier in edition dated May 18, 2003. — R.B. Saboo

The price movement in Hindalco has been in line with earlier recommendation. The outlook for the stock continues to remain positive. A move towards the Rs 850-900 range appears likely. Existing holders could remain invested with a stop loss at Rs 700. Fresh buying may also be considered by high-risk traders with a stop loss at Rs 700.

Please advise whether I can buy United Phosphorus and Sesa Goa at the current rate. — A.Ramachandran

The outlook for United Phosphorous appears positive. A move to Rs 330-340 levels appears likely. The stock is currently in a corrective phase. Fresh buying may be considered once the stock breaks out of the ongoing trading range. Rise above Rs 290 could be used to take equity exposure in the stock with a close stop loss in place.

Similar to United Phosphorous, Sesa Goa too is currently confined to a trading range. Though the outlook appears positive, equity exposures may be considered after the stock moves above Rs 200. A move towards the Rs 230-240 range appears likely. Only a move below Rs 160 would negate the positive view.

I bought Dr.Reddy's and J.K. Industries a couple of years ago. Please advise the future strategy and target price in short term. — Abhinandan Kumar

Dr.Reddy's Laboratories (Rs 1,177.05): The waning momentum in the stock over the past few weeks is a major cause of concern. The earlier bullish view hinges on the price movement in the next few weeks. A move past Rs 1,210 would have positive implications and would reinforce the earlier positive outlook. A drop below Rs 1,000 would negate the bullish view and could push the stock into a bearish orbit. Remain invested with a stop loss at Rs 1,000.

In the case of J.K.Industries, the overall outlook does not appear bullish. It would be safer to look for opportunities to reduce exposure. Only a move past Rs 28 would impart some sort of positive trend.

What the projection for Orchid's performance in 2003-04 and how it will reflect in the share price? With one year in view, I have acquired the stock at Rs 140. Please advise, whether can I accumulate more at the current rate or shall I switch to any other pharma company. — A. Ramachandran & Suresh

We would like to emphasise that the view provided in this column is based entirely on the historical price movement. Not too much attention is devoted to company fundamentals. Based on the past price action, we continue to maintain the earlier view that the stock could seek Rs 200 levels in the near term. Only a drop below Rs 145 would negate this view. Having bought the stock at Rs 140, there is no compelling reason to sell the stake at current levels. Profit booking may be considered on a move past Rs 200. Fresh buying may be considered on a move past Rs 180.

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