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B. Krishnakumar

What are the prospects of Neyveli Lignite (purchased at Rs 55.7)? — M. Nair, Sheikh Subur Basha

Neyveli Lignite (60.5): The stock appears to have completed the downward move at the low of Rs 39 recorded in June 2004. The near-term trend has turned positive and a move to Rs 72-Rs 75 range appears likely. There is no reason to sell the stock now. Hold with a stop loss at Rs 50.

I want to know the outlook of IPCL bought at Rs 161.5 and GAIL at Rs 185.2. — P. Singh, S.K. Srivastava

IPCL (Rs 211.7): The outlook appears positive and the price appears to be headed towards the Rs 238-Rs 240 range. The positive view would be in force as long as the stock trades above the stop loss level of Rs 193. Hold with a stop loss at Rs 190. Short-term traders could take long positions on a move past Rs 214, with a stop loss at Rs 201.

GAIL (Rs 194.7): There stock has been devoid of momentum in either direction. It has been stuck in a narrow range for several weeks now.

If it moves from this narrow band, it would trigger a strong move in the direction of the breakout. Taking into account your entry price and long-term positive outlook, it would be better to stay invested with a stop loss at Rs 175.

I bought Corporation Bank at Rs 235 and Ingersoll Rand at Rs 194. What is the long- term out look for these stocks? — Nagarajan

Corporation Bank (Rs 277.1): The stock could seek higher levels of Rs 295-Rs 300 in the near-term. From a long-term perspective, a move to Rs 375-Rs 380 appears likely. There is no reason to sell the stock. Hold with a stop loss at Rs 250. Partial profit-booking may be considered if the stock faces resistance at around Rs 295-Rs 300 range. Subsequent price dips may be used to take fresh exposures.

Ingersoll Rand (Rs 227.9): The outlook would be bullish as long as the price remains above Rs 188. A decline below Rs 188 would result in the completion of a bearish "head and shoulder" pattern. Investors who have entered at lower levels may hold with a stop loss at Rs 188. Risk-averse investors may have a tighter stop loss and liquidate holdings if the price drops below Rs 200.

I have shares in CESC purchased at an average price of Rs 125. The company has come out with a rights offer. Will it be advisable to accumulate the shares through the rights offer? — Sathianarayanan

CESC (Rs 120): The outlook for the stock appears bullish. A move to Rs 145-Rs 150 range may materialize. Fresh buying may also be considered with a stop loss at Rs 107. Investors who are entitled to participate in the rights offer may take their entitlement as the technical outlook is positive. We, however, wish to emphasise that the recommendation is based only on historical price behaviour and has got nothing to do with fundamental outlook. The recommendation based on fundamentals, pertaining to rights offering, would be covered in the edition dated October 10.

What is the outlook for Ashok Leyland? — . Janakiraman, A. Junis Thanasekar, Altaf Hussain, M.L. Prabhavathi, Adhish Singhal, V. Chandraseker Reddy

Ashok Leyland (Rs 18.7): Though there are no indications of the onset of a bullish trend, the downside appears limited. The next leg of an upward move would start once the ongoing decline is complete. Shareholders may remain invested with a stop loss at Rs 16. Only a close above Rs 20 would impart strength. Buying may be avoided for the moment.

Shall I hold or sell Great Eastern Shipping bought at Rs 160? — Adil Nabi

G.E. Shipping (Rs 163.4): The share price could move to Rs 175-Rs 178 range in the near-term. Hold with a stop loss at Rs 139. Short-term traders may take long positions on a break above Rs 166, with a stop loss at Rs 152. A drop below Rs 152 would be the first sign of weakness and a decline below Rs 139 would confirm that the stock is in a bearish trend.

How do Bayer ABS and McDowell appear on the charts? — Sunita Agarwal and Udai Kumar Agarwal

Bayer ABS (Rs 97.8): There appears to marginal downside risk from prevailing price levels. A move to Rs 112-Rs 115 range appears likely in the near-term. This view would be valid as long as the stock rules above Rs 90. Hold with a stop loss at Rs 90. Fresh buying may be considered on a break above Rs 100, with a stop loss at Rs 95.

McDowell (Rs 70.9): The stock could move to the immediate target price of Rs 78-Rs 81. Fresh buying may be avoided while shareholders may hold with a stop loss at Rs 65. Aggressive traders may go long on a break above Rs 75 while conservative investors may wait for the stock to close above the resistance level of Rs 81.

What is the outlook for Karur Vysya Bank bought at Rs 338? — R. Nagarajan

Karur Vysya Bank (Rs 321.3): The downward trend that commenced at the high of Rs 415 in July appears to be complete at the recent low of Rs 235. The outlook for the stock is bullish and a move to Rs 390-Rs 400 range appears likely. A drop below Rs 280 would negate positive outlook. Hold with a stop loss at Rs 280; Risk-averse investors may have r a tighter stop at Rs 300.

I bought L.G. Balakrishnan & Brothers at Rs 24 and SAIL at Rs 46. Shall I hold or sell these stocks? — J. Sumathi & R.K.Suman

L.G.B. Brothers (Rs 22.3): After a short-term downtrend, the stock is expected to resume the upward move. Only a close below Rs 17 would negate the positive outlook. On the completion of the ongoing downward trend, the stock is expected to move to Rs 28-Rs 30 range. Hold with a stop loss at Rs 17.

SAIL (Rs 47.3): The price could move to the immediate resistance zone at Rs 52-Rs 55 range. There is no reason to sell the stock now. Hold with a stop loss at Rs 42. Long positions may also be considered on a move past Rs 48, with a stop loss at Rs 42. A close below Rs 42 would blunt the positive outlook and would warrant dilution of holdings.

I am holding a huge chunk of Syndicate Bank shares bought at Rs 40.2. What is the outlook and should I hold or exit? — M. Sundararajan

Syndicate Bank (Rs 39.3): The stock could seek higher levels in the short-term. It could move to Rs 44-Rs 45 range. Only a drop below Rs 35 would invalidate the positive outlook. Hold with a stop loss at Rs 35 for a portion of the holding and at Rs 37 for the rest. Partial profit booking may consider on a move to Rs 44-Rs 45 band. Risk-seeking investors may employ a trailing stop-loss, which is quite close to the market price, in order to capitalise on price rally.

Shall I hold on to Hindalco bought at Rs 980? — Krishnakumar

Hindalco (Rs 1,382.6): Though the stock has appreciated from your purchase price, it would not be advisable to sell now as the outlook is still positive. The stock has scope to move up. A move to Rs 1,475-Rs 1,500 appears likely in the near-term. Hold with a stop loss at Rs 1,250. Partial profit-taking may be contemplated once the stock moves to Rs 1,475-Rs 1,500 zone.

I have purchased Bharti Tele at Rs 150 and ICICI Bank at Rs 280. Please advice whether to sell or hold. — Sachin Ranaji, K. Raghunathan

Bharti Tele-Ventures (Rs 143): The trend appears positive and the price could move to Rs 165-Rs 170 range. A drop below Rs 130 would be a negative signal and would impart weakness. Hold with a stop loss at Rs 130. A move past Rs 148 would trigger a buy signal. Traders willing to take risk may go long on a move above Rs 148, with a stop loss at Rs 138.

ICICI Bank (Rs 289.5): On the completion of the ongoing consolidation, the stock is expected to resume the upward trend. A move above Rs 300 would impart bullish momentum. Hold with a stop loss at Rs 270. Risk-seeking investors may go long on a move past Rs 298, with a stop loss at Rs 284.

The stock appears to have the potential to at least re-test the recent high of Rs 350.

What is the outlook for Welspun Gujarat? — Dhananjayan, Naveen Thomas, Roma

Welspun Gujarat (Rs 39): A move above Rs 43 would impart bullishness in the stock. On the other hand, a drop below Rs 36 would trigger selling pressure. Remain invested and place a stop loss at Rs 36. Fresh buying may be considered on a move past Rs 41, with a stop loss at Rs 37.

I invested in Mahavir Spinning at Rs 213. I recently read an article in your paper captioned "Textile Outsourcing, US bugbears" and turned panicky. Please advise whether to hold the shares or liquidate them? — V.K. Renganarayanan

Mahavir Spinning (Rs 215): Our positive view of the stock is unchanged. We continue to remain bullish and the target for the stock is Rs 238-Rs 240. Only a drop below Rs 185 would negate this view. Hold with a stop loss at Rs 185. Investors uncomfortable with such a wide stop-loss may have the stop loss at Rs 200 for a portion of their holdings and at Rs 185 for the rest.

We would like to reiterate that it is generally not advisable to confuse technical outlook and fundamental strength and growth prospects of a company concerned. The recommendations featured in this page are based only on the basis of the technical analysis of the historic price behaviour and patterns. The view or recommendation furnished would remain valid as long as the stop-loss level is not breached. The intervening fundamental developments would not alter the outlook, recommendation or the price target as long as the stock loss levels are not breached.

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, Chennai 600002.

We would endeavour to answer as many queries as possible. However, constraints of space will 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. Opinion and price targets are based on the Elliott Wave Analysis. The stop-loss level provided with the recommendation is important. The original view would stand negated if the stop loss level is breached. There is a risk of loss in trading.)

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