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B. Krishnakumar

What is the outlook for Orchid Chemicals & Sundaram Finance? — M.R. Vijay & Aakash

Orchid Chemicals (Rs 251.1): The trend appears to be bullish and the stock could move to the Rs 275-280 range. A move past Rs 290 would impart further strength. The positive view would be negated if the share price declines below Rs 205. As the stop-loss at Rs 205 would be wide, a tighter one for a major portion of the holding may be placed at Rs 221 and at Rs 205 for the rest. Partial profit taking may be considered if the stock moves to the Rs 275-280 range.

Sundaram Finance (Rs 245): The price charts point to freak quotes on several days. This makes the task of analysing the future trend difficult. Ignoring these price spikes, the outlook appears positive. The share price could move to the Rs 275-280 range. The view would be negated if the stock drops below Rs 220. Hold with a stop-loss at Rs 220.

Should I sell Bank of India (bought at Rs 23)? — Jayant

Bank of India (Rs 72): The stock has moved past the earlier mentioned (edition dated October 3) target zone of Rs 63-65. The outlook for the stock remains bullish. The share price could move to the next target zone at the Rs 82-85 region. Taking into account your cost and positive outlook, there is no reason to sell the stock now. Hold with a stop-loss at Rs 60, and consider partial profit booking when the stock moves to the target zone of Rs 82-85.

What is the outlook for MRPL (Rs 60) and Tata Teleservices (Rs 22.3)? — Nitin, Sunil Kr. Shahi, P Shirodkar & Dinesh Singh

MRPL (Rs 45.6): The stock has been stuck in a trading zone for several weeks now. Only a break out from this trading range would impart a meaningful trend. Though the possibility of the stock dropping to lower levels is not ruled out, it could recover subsequently to the Rs 55-60 range. A close below Rs 38 would confirm the possibility of a drop to further lows. A part of the holding may be sold if the stock closes below Rs 38. Risk-averse investors who are uncomfortable with this stop-loss level may sell a portion of the holding at prevailing prices. Investors selling the stock now may consider fresh buying if the stock moves past Rs 51.

Tata Tele (Rs 17.7): The recent price movement has been devoid of any meaningful trend. The price has been oscillating in a narrow range for quite some time now. There is a possibility of the stock dropping to the Rs 13-14 range. A drop below Rs 13 could pave the way for a further slide to the Rs 10-11 range. Investors who have entered at lower levels may sell a portion of the holdings now and switch to stocks that are in a bullish phase. There is no point staying invested in a stock that is yet to get into a trending mode. Stop-loss for existing positions may be placed at Rs 16.

I bought Neyveli Lignite at Rs 54 and Alstom Projects at Rs 137. Please advise on outlook of these stocks. — Amit Biniwale

Neyveli Lignite (Rs 58.7): The stock is in a short-term corrective phase and might drop to the Rs 54-55 range. The long-term trend is, however, positive. The stock could move to the target zone of Rs 72-74 on the completion of the corrective phase. The long-term positive outlook would be in force as long as the stock holds above the stop-loss level of Rs 49. Hold with a stop-loss at Rs 49. A move past Rs 61 would indicate that the stock has resumed its upward move. Risk-averse investors may sell a portion of the holding now and have stop-loss at Rs 49 for the balance. Fresh buying may be considered with a tight stop-loss on a close above Rs 61.

Alstom Projects (Rs 131): The short-term trend appears weak and the share price may decline to the Rs 122-124 range. Conservative investors may sell a portion of the holding at prevailing rates and retain the balance with a stop-loss at Rs 122. Fresh buying, with a close stop-loss, may be considered if the stock moves past Rs 145. Investors who have entered at lower levels and those willing to take risk may remain invested with a stop-loss at Rs 122, and use price rally to reduce exposures.

Shall I hold or sell Allahabad Bank bought at Rs 45 and Alembic at Rs 133? — M. Prabhakar Shet

Allahabad Bank (Rs 57): The outlook is positive and the share price could move to the Rs 65-68 range. A drop below the stop-loss level of Rs 49 would negate the positive outlook. Hold with a stop-loss at Rs 49. A move past Rs 62 may be used to take fresh long positions with a stop-loss at Rs 53.

Alembic (Rs 230): Though the stock could rule weak in the near term, the long-term outlook is positive. Hold with a stop-loss at Rs 205. Those who are uncomfortable with this stop-loss may sell a portion of the holdings now and consider re-entry on a move past Rs 250 (with a close stop-loss in place). On the downside, a drop below Rs 205 could pave the way for a slide to the Rs 165-170 band.

I bought Moser Baer at Rs 288 a year ago. Will the stock get back to the earlier highs? — Ram Lubhaya

Moser Baer (Rs 209.4): There appears to be marginal downside risk from prevailing levels. The stock enjoys a strong support at the Rs 175-180 range. A move past Rs 232 may be used to take exposures with a stop-loss at Rs 195. As there is a possibility of the stock moving to your purchase price, it would be advisable to hold with a stop-loss at Rs 174.

I bought Surat Electricity at Rs 235. Shall I hold or sell? — R.M. Palaniappan

Surat Electricity (Rs 264.8): The recovery from the low recorded in mid-July appears to be the start of the next move on the upside.

The stock could move to the Rs 305-310 range. This view would be valid till such time the share price stays above Rs 245. A drop below Rs 245 would blunt the positive outlook.

Taking into the positive outlook and your entry price, there is no reason to sell this stock now. Remain invested with a stop-loss at Rs 240.

What is your view on Hinduja TMT and IVRCL Infrastructure bought at Rs 280 and Rs 250 respectively.

Hinduja TMT (Rs 281.6): The stock has been stuck in a trading zone. It has not participated in the recent rally in mid-cap stocks.

A strong trend would emerge only when the stock gets out of this trading zone. While the long-term outlook is positive, the direction of the breakout in the near term is uncertain. Hold with a stop-loss at Rs 264 for a part of the holding and at Rs 250 for the rest. Only a move above Rs 305 would impart bullishness.

IVRCL Infrastructure (Rs 279.7): Though the possibility of a further rally is not ruled out, the stock could soon get into a corrective mode. A drop below Rs 264 would indicate that the stock is in the corrective phase towards the target zone of Rs 235-240.

Hold with a stop-loss at Rs 270 for a portion of the holding and at Rs 263 for the balance. Price rally may be used to trim holdings.

I have shares of Polyplex Corporation at Rs 233. Should I sell or hold and, if so, up to what levels? — K. Sharadha

Polyplex Corporation (Rs 251.4): The long-term trend is positive and the stock has some distance to be covered on the upside. A move to the Rs 295-300 range appears likely.

The long-term upward trend would resume on the completion of the present corrective phase. The positive outlook would be valid as long as the stock trades above Rs 220. Hold with a stop-loss at Rs 220 for a portion of the holding and at Rs 230 for the balance.

What is your opinion on Tata Steel (Rs 256)? — Krishnamurthy, Rohit, Danish Kapur

Tata Steel (Rs 307.7): The recent upward stretch has been a laboured effort. This is not a positive sign. A corrective phase may be just round the corner. Fresh buying may be avoided. Those holding long positions may tighten their stop-loss. The stop-loss for the existing holdings may be placed at Rs 285. Those willing to take extra risk may have the stop-loss at Rs 275.

Should I sell or hold Jyoti Structure bought at Rs 70 and GlaxoSmithKline Pharma at Rs 760? — Niraj

Jyoti Structures (Rs 138.7): Despite the recent surge in price, the stock still has upside potential. A move to the Rs 175-180 range appears likely. Considering your entry price and positive outlook, it would be better to remain invested and participate in the expected run-up in price. Hold with a stop-loss at Rs 125. Those willing to take risk may take fresh exposures on a move above Rs 148, with a stop-loss at Rs 135.

GlaxoSmithKline (Rs 748): The stock appears to have at least one more move on the upside. The share price could move to the Rs 800-810 range. Taking into account the relatively wide tick-spread, having a stop-loss may not prove to be effective. Sell at least a portion of the holding if the stock declines below the negative trigger level of Rs 710.

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

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

(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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