The Hindu Business Line : Query Corner

Bharti Tele (Rs 157.1): The price action has been devoid of any meaningful trend in the past few weeks. Only a close above Rs 175 would impart strength. A drop below Rs 129 would impart weakness. The recent price pattern indicates that the stock is likely to oscillate in a narrow range and subsequent upside breakout is likely. Taking into account your entry price, it would be advisable to hold with a stop-loss at Rs 145.

What is the outlook for Satyam Computer and Gujarat Ambuja Cements? — Sekhar

Satyam Computer (Rs 374.1): There is a strong resistance at the Rs 410-420 range. A convincing uptrend would take shape only if the stock moves above this resistance zone. The recent price pattern indicates that the stock is likely to rule weak in the near term. Those who are holding profitable positions may book partial profits by selling at market rates; for the balance, a stop-loss may be placed at Rs 354.

Gujarat Ambuja Cement (Rs 342): The short-term outlook appears positive. A move to the Rs 365-370 range appears likely. The positive outlook would be negated if the stock drops below Rs 325. This would result in the completion of a bearish "head and shoulder" pattern and may push the stock to the Rs 295-300 range. Hold with a stop-loss at Rs 325.

What is the outlook for Tasc Pharma bought at Rs 138 and Gujarat NRE Coke at Rs 89? — Srinagesh

Tasc Pharma (Rs 153.8): The outlook appears positive and a move to the Rs 175-180 range appears likely. Taking into account your purchase price and positive outlook, hold with a stop-loss at Rs 140. Investors willing to take risk may take long positions on a move above Rs 166, with a stop-loss at Rs 148. A drop below Rs 140 would blunt the positive outlook and a close below Rs 120 would negate the bullish view.

Gujarat NRE (Rs 112.7): The share price has moved up sharply in the recent weeks. The upward move, however, does not appear complete as yet. A move to the Rs 132-135 range appears likely. Based on the latest price patterns, there is no reason to sell this stock in a hurry. Hold with a stop-loss at Rs 95. A move past Rs 117 may be used to take fresh long positions with a stop-loss at Rs 104.

I have exposures in Deepak Fertilisers and Dhampur Sugar. What is the technical outlook for these shares? — Alok Varshney

Deepak Fertilisers (Rs 41): The stock faces resistance at the Rs 45-50 range. A move past this zone would impart strength. A drop below Rs 37 would impart weakness and could push the stock down to the Rs 30-32 range. Hold with a stop-loss at Rs 37 and use price rally to either reduce exposures or tighten stop-loss.

Dhampur Sugar (Rs 46): A move past Rs 48 would impart momentum to the upward move and a close above Rs 52 would impart further strength. Hold with a stop-loss at Rs 42.

What is the outlook for Rain Calcining bought at Rs 18.2 and Chambal Fertilisers at Rs 23? — M. Nair

Rain Calcining (Rs 16.5): The drop from the high of Rs 19.3 recorded in early October is not yet complete. The stock is likely to drop to the Rs 12-13 level after a short-term bounce. Look to reduce exposures. A drop to Rs 15.5 would confirm the negative outlook for the stock. Hold with a stop-loss at Rs 15.5.

Chambal Fertiliser (Rs 20.6): The stock is confined to a narrow range in the recent weeks. On the upside, the stock would face resistance at the Rs 22-23 range. On the downside, the support lies at the Rs 19-20 range. A breakout from either of these levels would impart a strong momentum in the direction of the breakout. Stay away from this stock till such time a meaningful trend emerges. Those holding the shares may have a stop-loss at Rs 19.

I have a huge chunk of India Cements at Rs 44.9. Please let me have your views on the stock. — N.Sivasubramanian

India Cements (Rs 38.5): The stock is likely to move towards the Rs 41-42 range in the near term. After the expected upward move, the stock is likely to drop to the Rs 33-34 range. A portion of the holding may be sold or the stop-loss may be bought closer to the prevailing market price if the share price moves closer to the Rs 42 mark. Hold with a stop-loss at Rs 37 for a portion of the holding and at Rs 35 for the balance.

Is it advisable to buy Bongaigaon Refinery at prevailing prices? — A. Raj Kumar & Subur Basha Sheikh

Bongaigon Refinery (Rs 93.3): After a short-term bearish trend, the stock is likely to seek higher levels. The recent rally has pushed the stock to short-term overbought region. As a result, the stock could ease to lower levels of Rs 87-88. The long-term uptrend is likely to assert its influence after the short-term drop. Those planning to buy the stock may wait for price weakness. Stop-loss for fresh buying may be placed at Rs 80. The target for the stock is placed at the Rs 110-115 range.

Kindly guide me about the prospects of IPCL (purchased at Rs 170). — A.S. Bhasin

IPCL (Rs 187.6): Short-term traders may hold with a stop-loss at Rs 178. A drop below this level may impart weakness and the share price is likely to drop to the Rs 170-172 range subsequently. Those willing to take risk and investors who have entered at lower levels may hold with a stop-loss at Rs 163. Only a move past Rs 197 would impart bullishness. Fresh buying may be avoided for the moment.

At what price should I sell SAIL bought at Rs 45 and Hotel Leelaventure at Rs 73? — Shailesh

SAIL (Rs 49.4): The near-term outlook is positive and the stock could move to the Rs 58-60 range. A drop below Rs 43 would negate the positive outlook for the stock. Taking into account your entry price and positive long-term outlook, there is no reason to sell the stock at prevailing levels. Hold with a stop-loss at Rs 43. Those who have entered at fairly low levels may have stop-loss at Rs 43 for a portion of the holding and at Rs 36 for the balance.

Hotel Leela (Rs 81.7): The stock appears to be headed towards the Rs 100 mark in the near term. Hold with a stop-loss at Rs 70 and look to take partial profits when the price moves to Rs 100.

Is your earlier view still valid in the case of FDC? — Subur Basha Sheikh

FDC (Rs 50.3): The earlier view of a rally to the Rs 65-70 range is still valid. This view would continue to be valid as long as the stock trades above the earlier mentioned stop-loss level of Rs 40. Hold with a stop-loss at Rs 40. Those uncomfortable with this stop-loss level may have a stop at Rs 48. If the stop-loss is triggered, fresh buying may be considered on a subsequent move past Rs 54. — B. Krishnakumar

I am a regular reader of Business Line and follow its recommendations. Recently I bought Karur Vysya Bank at Rs 336. Will I be in a position to recover my amount invested? — Rajesh

Karur Vysya Bank (Rs 297.5): The stock was covered under the "Focus of Week" column in the edition dated October 10. Contrary to expectations, the stock ruled weak and also dropped below the stop-loss level of Rs 308. A "buy" signal would not have been triggered in this stock, as it failed to move past the positive trigger level of Rs 340 that was mentioned along with the earlier recommendation.

The near-term outlook for the stock appears positive. There is a possibility that the stock could move past your purchase price of Rs 336. A drop below Rs 285 would negate the positive view. Those who are uncomfortable with this stop-loss may sell a portion of the holding at market rate and retain the balance with a stop-loss at Rs 285.

As mentioned on quite a few occasions, the original recommendation/view would stand negated if the stock breaches the stop-loss level mentioned with the recommendation. Before taking a decision to commit funds in a stock, investors should be sure about the stop-loss level that they are comfortable with. Exposures should be reduced if the stock breaches the stop-loss level. If the investor feels uncomfortable with the stop-loss mentioned with our recommendation, it would be advisable to stay away from that trade. Alternatively, investors may wait for the price declines and take exposure that is closer to the stop-loss level, which would reduce the potential loss.

(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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