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B. Krishnakumar

Please advise about Moser Baer and Lyka Labs. I intend to accumulate these stocks in huge quantity. — S. Venkata Ramanah

Moser Baer (Rs 291.4): Despite the sharp run up in price in the recent months, there still appears to be some upside potential from current levels. The stock is currently in a sideways corrective phase. An uptrend would resume on the completion of the ongoing correction. On the upside, a move to the Rs 350-360 range appears likely. Existing holders may remain invested with a stop loss at Rs 250. Fresh buying may be considered on evidence of support around the Rs 255-260 range. Alternatively, a close above Rs 315 could be used to take limited exposures with a close stop loss in place.

Lyka Labs (Rs 77.2): The overall outlook appears positive. However, the stock appears to be trading in an extremely overbought region. A short-term decline or a sideways correction is likely to materialise. Such price weakness could be used to take fresh exposures in small dosages. A drop below Rs 62 would be a worrying factor and would negate the positive outlook. All long positions would, therefore, warrant a stop loss at Rs 62.

What is the outlook for Foseco and Supreme Industries? — J.K.Bhalla

Foseco (Rs 262.9): The stock appears to be headed towards higher levels of Rs 300-320 in the near term. Technically, there is no compelling reason to sell the stock at current price levels. Owing to relatively low trading volume, the stock may not be suitable for taking short-term trading positions. Long-term investors willing to take delivery and wait for a while may buy the stock once it moves above Rs 282. All long positions would warrant a stop loss at Rs 245.

Supreme Industries (Rs 214.7): Though the long-term trend appears positive, the near-term outlook does not appear too bullish. A drop to the Rs 190-195 range appears likely in the short-term. However, the long-term uptrend is likely to resume after the completion of the expected decline. Risk-averse investors may have a stop loss at Rs 208 while others may have the stop loss at a lower level of Rs 186. A move above Rs 236 could be used to make fresh buying with a stop loss at Rs 209. On the upside, the stock is likely to seek the 260-265 range.

What is the outlook for Century Enka and Siyaram Silk? — M. Dhandapani

Century Enka (Rs 166.6): The stock has been on an uptrend in the recent months. It appears to be headed towards the Rs 200 mark in the near term. This view would be negated only if the share price drops below Rs 150. Existing holders may remain invested with a stop loss at Rs 148. Fresh buying may be considered on a close above Rs 176 with a stop loss at Rs 155.

Siyaram Silk (Rs 108): The stock is in the midst of a bull run. A move to the Rs 145-150 range appears likely. However, the near-term trend appears weak. The stock is currently perched at an overbought range. A short-term weakness may persist which could push the stock to the Rs 88-93 range. Evidence of support at this range could be used to take long positions with a close stop loss in place. Long-term investors could buy this stock on price dips while short-term traders could go long once the stock moves above Rs 115. A drop below Rs 80 would negate the long-term bullish outlook and would result in a prolonged weakness.

I bought Ceat at Rs 50 and IFCI at Rs 17. Should I hold or sell? — K. Murali Mohan

Ceat (Rs 62.6): The stock could move to the Rs 73-75 range. This view would be valid as long as the stock trades above Rs 58. A drop below this range could lead to a slide to the Rs 54-55 range. Fresh buying may be avoided while existing holders may remain invested with a stop loss at Rs 58.

IFCI (Rs 17): After a sharp uptrend, the share price dropped to a low of Rs 12.35 in November and has since recovered ground.

The overall outlook is positive and a move to the Rs 22-24 range appears likely. Fresh buying may be avoided. Existing holders may remain invested with a stop loss at Rs 14. Investors with a high-risk appetite could consider long positions with a close stop loss once the share price moves above Rs 19.

I am holding BOC purchased at Rs 40. I wish to know the medium-term prospects for the stock. — Mohan Lal.

BOC (Rs 50.1): The stock appears to have completed an upmove at Rs 55.4 recently. If this view is valid, the scrip is likely to rule weak in the near term. A drop to the Rs 40 level is not ruled out.

Only a close above Rs 57 would reinstate the positive trend. Risk-averse investors may book profits by selling at least a portion of the portfolio at current levels. Fresh buying may be considered once the stock closes above Rs 57.

Can I hold or buy more of Dr Reddy's Labs (bought at Rs 1250) and Suven Life Science (bought at Rs 510)? — N. Ramabhadran

Dr.Reddy's Labs (Rs 1352): The outlook for the stock appears positive. However, fresh buying may be deferred till the emergence of a strong upward momentum. At the moment, a close above Rs 1500 would impart bullishness in the stock. Existing holders may remain invested with a stop loss at Rs 1200. Fresh buying may be avoided for the time being.

Suven Life (Rs 441.3): The near-term outlook does not appear too positive. Only a move past Rs 540 would reinstate the positive trend. In the near term, a drop to the Rs 380-390 range is not ruled out. Existing holders may remain invested with a stop loss at Rs 410. Risk-averse investors may have a stop loss at a slightly higher level of Rs 420. Fresh buying may be deferred till such time the stock hits Rs 540.

I hold Arvind Mills bought at Rs 60 and Vijaya Bank at Rs 39. Please advise what is the long-term outlook for these stocks?

Arvind Mills (Rs 61): The long-term outlook for the stock is positive. A move to the Rs 80-85 range appears likely. However, the stock could rule weak in the near term. A drop to the Rs 55-57 range appears likely. Long-term investors willing to wait for more than a year may remain invested with a stop loss at Rs 50. Conservative investors may have the stop loss at a slightly higher level of Rs 56. At the moment, only a close above Rs 66 would reinstate the bullish momentum.

Vijaya Bank (Rs 37.8): There is a strong resistance at the Rs 39-41 range. Only a break out of this range would lead to a meaningful uptrend. On the downside, a drop below Rs 34 could lead to a drop to the Rs 28-29 range. Remain invested with a stop loss at Rs 34. Fresh buying may be avoided for the time being. — B. Krishnakumar

Based on the recommendation in Business Line, I bought Bombay Dyeing at 150 and BEML at 218. Please advise my future course of action since both have not moved anywhere. I also bought MRPL based on your advice at Rs 44. Please advise if I have to buy more in this choppy market. — T. Suresh

We wish to reiterate that recommendations and views provided in this page are based entirely on the technical analysis of past price behaviour. There is a risk of loss in trading/investing based on technical analysis.

Money can be made in the long run if the entry, exit and stop loss levels that are provided along with the recommendation are strictly adhered to. It may also be noted that the share price need not always move in line with our recommendation. And there could be instances wherein the stop loss may get triggered resulting in a net loss to the investor. This is the risk an investor must be willing to take while dealing with investment in stock market.

Bombay Dyeing (Rs 143.6): The earlier view of a rally to the Rs 200-210 range remains valid. However, a buy signal should not have been triggered in this stock, as it did not close above the positive trigger price of Rs 167 that was mentioned earlier (edition dated November 16). Now that you have taken a long position, remain invested with a stop loss at Rs 130.

BEML (Rs 214.3): The stock has been confined to a narrow trading range in the recent weeks. The earlier positive view remains valid. Only a drop below Rs 195 would invalidate the earlier view of a rally to the Rs 275-280 range. Remain invested with a stop loss at Rs 195. More conservative investors may reduce exposures at current market price and contemplate re-entry once the stock closes above Rs 240.

MRPL (Rs 50.8): The stock has already moved to the first target zone of Rs 52-55 range that was mentioned in edition dated November 16. The stock appears on course to move to the next target zone of Rs 65-68. range. Remain invested with a stop loss at Rs 45.

(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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