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B. Krishnakumar

I am holding shares in PentaMedia Graphics and JCT. Is it advisable to enhance my exposure in these stocks? — M. Narayana, N.R. Srinatha

PentaMedia Graphics (Rs 11.8): Though there is a possibility of a drop to Rs 8-9 range, the long-term outlook appears positive. The share price is likely to move to Rs 15-16 range shortly. Fresh buying may be considered on the evidence of support at Rs 9. Fresh buying may also be considered if the stock fails to drop to the Rs 8-9 range and breaks past Rs 12.5 instead.

Stop-loss for long positions, taken above Rs 12.5, may be placed at Rs 10.

JCT (Rs 10.9): An inverse "head and shoulder" pattern appears to be taking shape in the weekly semi-log price chart. The stock appears to be on the verge of breaking out of this pattern. The stock could move to the Rs 14-15 range shortly. Though the stock could seek lower levels in the near-term, it is likely to get back towards the target zone on the completion of the expected downtrend. The positive view would be negated if the stock declines below Rs 8.5.

I hold a huge chunk of Prism Cement bought at Rs 20. Is it advisable to hold the shares or take profits? — K. Ramkumar

Prism Cement (Rs 24.4): The stock is likely to move to Rs 32-35 range. The positive view would be in force as long as the stock holds above Rs 22. A drop below Rs 22 would result in a delay in the move to the target zone. Hold with a stop-loss at Rs 21.8 and a trailing stop-loss may be employed in the event of a steady move up.

I purchased Arvind Mills at Rs 134. Is there any upside potential or should I exit at a loss? — Ashok Sharma, Maneesh

Arvind Mills (Rs 123.7): Though the long-term trend is bullish, there is no evidence to suggest that the stock has commenced the next leg of the upward move. Technically, a drop below Rs 118 would impart weakness and could result in a drop to Rs 99-100 range. On the upside, bullish momentum would gather steam if the stock moves above the resistance level of Rs 137. Hold with a stop-loss (on closing basis) at Rs 118. Fresh exposures may be considered on a move past Rs 137. Investors who have entered at lower levels may have the stop-loss for a portion of the holding at Rs 118 and at Rs 90 for the balance.

You had mentioned last week that MphasiS BFL is forming a "contracting Triangle" in the weekly charts and the stock is expected to rise to Rs 400. The share price has moved up in the last few days. Is this the start of the rise to Rs 400 and is it the right time to enter the stock? Also give outlook on Dhampur Sugar. — P. Shirodkar

MphasiS BFL (Rs 258): The view expressed last week is valid. The price patterns in the recent days do not confirm the breakout from this "contracting triangle" pattern. A "buy" signal would be triggered only if the stock closes above Rs 305. Till such time, it would be advisable to wait patiently.

Dhampur Sugar (Rs 150.6): The long-term outlook is positive. Though there are signs of the completion of the recent downward move, it would be safer to wait for confirmation before committing fresh funds. Hold with stop-loss at Rs 140. Fresh exposures may be considered on a move above Rs 164.

Should I hold or sell Glenmark Pharma bought at Rs 392? — M.S. Mahalingam, Ravi Kapoor

Glenmark Pharma (Rs 512): After the completion of the corrective phase that the stock is presently in, the stock is likely to resume the earlier upward move. The stock is likely to move to Rs 595-600 range on the completion of the downward move. Hold with a stop-loss at Rs 500 for a portion of the holding and Rs 440 for the balance.

Though the stop-loss at Rs 440 is wide, it would be in order, as the stock has upside potential that is commensurate with potential risk. Those who prefer to adopt a cautious approach may sell a portion of the holdings now and have a stop-loss at Rs 500 for the balance. Fresh buying may be considered on a move past Rs 560.

Is it advisable to buy Rajasthan Spinning? — D.Venugopal

Rajasthan Spinning (Rs 97.4): The recent downtrend does not appear complete. A drop to Rs 82-85 range appears likely. A drop below Rs 94 would confirm the negative outlook. Fresh buying may be avoided for the moment. Long positions may be considered on the evidence of support at around Rs 82-85 range, with a stop-loss at Rs 75. A move above 106 would also be a "buy" trigger and long positions may be taken if the stock moves past this level, with a stop-loss at Rs 94.

Should I hold or sell my holdings in Vijaya Bank bought at Rs 75? — Meena Rao, Ravi

Vijaya Bank (Rs 59.5): It would require quite an effort and time for the stock to get back to your entry price. The stock appears to have hit a temporary bottom at the low of Rs 55.1 recorded a couple of days ago. The stock is likely to see a recovery to Rs 64-65 range. It would be advisable to sell a portion of the holding if the stock faces resistance at Rs 64-65 range. Stop-loss for existing holdings may be placed at Rs 50. Fresh buying may be considered by investors with a high risk appetite if the stock closes above Rs 68.

What is the outlook for Lakshmi Overseas (Rs 140) and Venus Remedies (Rs 75)? — Subhash Jain

Lakshmi Overseas (Rs 167.3): The stock is in a major uptrend, which does not appear complete as yet. The recent upward move has, however, pushed the stock into an overbought position in the weekly charts. A corrective phase would set in, when the stock gets into the overbought region in daily charts as well. Investors need to tighten stop-loss and look for opportunities to dilute exposures. Though the stock could move to Rs 175-180 range, a cautious approach and a periodical profit booking may be in order. Using a trailing stop loss would be a safe approach in such a scenario.

Venus Remedies (Rs 74.8): The stock enjoys a strong support at Rs 68. Remain invested with a stop-loss at Rs 68 and fresh exposures may be considered on a move above Rs 80, with a close stop-loss in place. A move past Rs 80 would help the stock move to Rs 92-95 range.

What should I do to my holdings in Bank of Baroda bought at Rs 220 and Mirza Tanners bought at Rs 215? — M.G.K.Murty

Bank of Baroda (Rs 203.9): An explosive move may be on the cards. The near-term price action would provide clue about the direction of the expected sharp move. The share price has been confined to a narrow trading zone. The volatility in the stock has also shrunk considerably. Considering that contraction of volatility leads to a sharp expansion in volatility, investors need to be on the alert to capitalise on the possible money making opportunity. While a move past Rs 215 would result in an upward spike, a drop below Rs 190 would result in a sharp move on the downside. Hold with a stop-loss at Rs 190. A move above Rs 215 may be used to take long positions with a close stop-loss in place.

Mirza Tanners (Rs 203.4): Though the long-term outlook is positive, a drop below Rs 169 would have bearish implications. This would result in the completion of a "head and shoulder" pattern resulting a potential drop to Rs 135-140 range. A move past Rs 216 would impart strength and would result in the resumption of the upward move. Hold with a stop-loss at Rs 192 for a portion of the holding and at Rs 170 for the balance.

Based on your recommendation, I purchased Asahi India at Rs 125 and Shipping Corporation at Rs 163. What is the outlook for these stocks? — Altaf Hussain, V.Mahesh

Asahi India (Rs 163): Though the long-term outlook is positive, it would be safer to take profits for a portion of the holding. Investors may consider fresh long positions when a new "buy" signal is triggered. Hold with a stop-loss at Rs 155 and use a trailing stop-loss in the event of a steady upward move. A close above Rs 180 would be a fresh "buy" signal and stop loss for the trade may be placed at Rs 160.

Shipping Corporation (Rs 161.8): The long-term outlook remains bullish. In the short-term, there is a chance of the stock testing the low at Rs 140-142 range. Hold with a stop-loss at Rs 132. Investors who prefer a relatively conservative stop-loss may have it at Rs 158. If the stop-loss gets triggered, fresh buying may be considered on evidence of support at the Rs 140-142 range.

A close above Rs 174 would impart strength and help the stock seek higher level of Rs 195-200.

(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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