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What is the outlook for Larsen & Toubro that I bought at Rs 285 long time ago? Also provide your views on BEML bought at Rs 100 and Tata Power at Rs 157. — T. Suresh, Saurab Jain.

Larsen & Toubro (Rs 273.9): The stock has been on a major uptrend in the recent months. However, it has been stuck in a narrow range in the past few days. The stock is currently perched close to the critical Fibonacci price target of Rs 280. Only a move above Rs 290 could pave the way for a further rise to the Rs 337-340 range. Considering your entry price and having held on to the stock for a long time, there is no technically compelling reason to liquidate holdings at current levels. Remain invested with a stop loss at Rs 250.

BEML (Rs 84.4): The overall outlook for the stock appears positive. Only a move below Rs 78 would have negative implications. Hold on with a stop loss at Rs 78. Fresh buying may be avoided as long as long as the stock is traded below Rs 100. A move past Rs 102 may be used to take fresh exposures.

Tata Power (Rs 148.3): The near-term outlook for the stock does not appear negative. A drop to the Rs 132-135 range appears likely. There is a possibility of a short-term uptrend thereafter. Having held on to the stock for a long period of time, it would be better to remain invested and try to dilute exposures at or just above the entry price. Very conservative investors could sell at current levels and contemplate re-entry on a break above Rs 157.

I wish to know the future prospects of MRPL and Tata Steel. — Thomas Jose

MRPL (Rs 20.8): The short-term trend is bearish. A head & shoulder reversal pattern has been completed and a drop to the Rs 17-17.5 range appears likely. There is no compelling reason to take fresh long positions at current levels. A close above Rs 25 could be used to take fresh exposures. Existing holders could remain invested with a stop loss at Rs 16.9. Risk-averse investors could sell at current levels and wait for the onset for a confirmed bullish trend before taking fresh exposures.

Tata Steel (Rs 197.2): The overall outlook for the stock appears extremely bullish. Only a close below Rs 180 would negate the bullish outlook for the stock. Ideally, the scrip is likely to yield returns in excess of 25 per cent from current levels for investors willing to hold for a 5 to 6 months. Existing holders could remain invested with a close-only stop loss at Rs 180.

What are the prospects for i-flex solutions? — C. Dayakar

i-flex Solutions (Rs 1,198.2): The price history is inadequate to come to any firm conclusion about the future direction of price movement. Only trading calls can be made with the limited price history. At this point in time, a drop below Rs 1,080 would impart bearish trend. Existing holders could remain invested with a stop loss at Rs 1,080.

Please suggest me whether I can purchase shares of Welspun Gujarat, Elgi Equipment and Tudor? — Deepak Shanbhag & Shankar

Welspun Gujarat (Rs 22.4): A drop to the Rs 20.15 range appears likely. Only a close above Rs 30 would trigger positive sentiment. There is no reason to buy the shares at current levels.

Elgi Equipment (Rs 35.5): The overall trend appears positive. The stock has already been covered a few weeks ago and the share price has moved past the then mentioned price target. A move to the Rs 48-50 range appears likely. Existing investors can remain invested with a stop loss at Rs 30. Only a close below Rs 30 would negate the positive outlook. A close above Rs 40 could be used to take fresh long positions.

Tudor India (Rs 19.2): The relatively low trading activity in the stock makes it difficult to arrive at any decision about the price action. We are unable to come up with any recommendation for this stock.

Please inform me whether it is worth holding shares of Prism Cement, Hindustan Motors and Indo Count. — S K Shanbhag, P.N. Kumar & Viswanath Sindagi

Prism Cement (Rs 6.5): The earlier view that the stock could move towards Rs 10 continues to remain valid. The stock is currently in a corrective phase and only a drop below Rs 5.8 would negate the bullish view. A close above Rs 7.25 would be an early indicator of a move towards the price target. Remain invested with a close-only stop loss of Rs 5.8.

Hindustan Motors (Rs 13.8): The stock was covered in an earlier issue of Business Line. The earlier view of a rally to Rs 20 is still valid. The stock could, however, seek lower levels in the range of Rs 11.5-12 in the near term. The expected uptrend could resume thereafter. Existing holders could remain invested with a close-only stop loss at Rs 11.4

Indo Count (Rs 7): The near-term trend does not appear too positive. A drop to Rs 6 appears likely. Only a move past Rs 10 would impart positive trend.

Please let me know the prospects of Ajanta Pharma, Gujarat Industries Power and Neyveli Lignite. — Mythili

Ajanta Pharma (Rs 37.7): There appears to be limited upside potential for the stock from current levels. A short-term uptrend to the Rs 42-43 range may materialise. This, however, would be a corrective rally in the context of an overall bearish trend. Look for opportunities to exit from the stock. Fresh buying may be considered after the stock moves past Rs 52.

Gujarat Industries Power (Rs 25.5): The stock is currently positioned very close to the critical support level of Rs 25.15. A close below Rs 25 would complete a bearish head & shoulder pattern. The stock would then be vulnerable to a drop to the Rs 20-21 range. Remain invested with a stop loss at Rs 24.8. Only a move past Rs 30 would impart a positive trend.

Neyveli Lignite (Rs 36.8): The near-term outlook is bearish. A drop to the Rs 30-32 level appears likely. Reduce exposures and contemplate re-entry at a later date. For now, only a close above Rs 42 would impart some bullishness.

Can the shares of Ranbaxy, Corporation Bank, SBI, and Bank of Baroda be bought at the current price levels or should I wait for some time later to pick them up. — Arunachalam Krishnamurthy & V. Sundararaj

Ranbaxy (Rs 833.7): The overall outlook for the stock is bullish. Only a close below Rs 775 would negate the positive outlook. Fresh buying may be considered after the share price closes above Rs 870. If the bullish view is validated, the stock could move up to touch Rs 1,000 mark. Existing holders could remain invested with a stop loss at Rs 775. Long-term investors could accumulate the stock on declines. Risk averse investors could wait for a close past Rs 870.

SBI (Rs 414.15): The overall trend for the stock is extremely bullish. A move towards the Rs 550-600 range could materialise over a longer time frame of about 6 to 9 months. In the near term, there is a risk of a drop to Rs 378-380 levels. A drop below Rs 395 would pave the way for a decline to the Rs 378-380 range. Existing holders could remain invested with a close-only stop loss at Rs 378. Fresh buying may be considered on a close above Rs 440.

Bank of Baroda (Rs 134.3): There appears to be limited upside potential for the stock from current levels. Though an upside move from the current price is not ruled out, the negative divergence between share price and indicators such as the 14-day RSI and MACD rules out recommending fresh exposures.

Orchid Chemicals (Rs 154.7): The long-term outlook for the stock is bullish. Only a close below Rs 134 would negate the positive outlook. Investors willing to take additional risk could remain invested with a stop loss at Rs 134. Risk-averse investors could place a stop loss at a slightly higher level of Rs 149. Fresh buying may be considered on a close above Rs 175.

Readers can send in their queries, on not more than two companies, to

techtrail@thehindu.co.in

Queries can also be sent by post to:

Tech Trail, 859/860 Kasturi Buildings, Anna Salai, Chennnai 600 002

We would endeavour to answer as many queries as possible. However, constraints of space may limit the responses featured under this column.

(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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