The Hindu Business Line : Query corner

Taking into account your entry price and positive long-term outlook, remain invested with a stop-loss at Rs 240. The stock could move to the Rs 305-310 range shortly.

A close above Rs 285 would confirm the resumption of the upward trend. A close below Rs 240 would warrant dilution of holdings.

If the stop-loss gets triggered, fresh exposures may be considered on a subsequent move above Rs 285.

Apollo Hospital (Rs 379.1): The stock could move to the Rs 405-410 range in the near term. Hold with a stop-loss at Rs 350. Partial profit booking may be considered on a close above Rs 410.

A close below Rs 350 would warrant dilution of holdings as this would impart weakness.

Please advise whether to hold or exit from Gujarat Ambuja Cement bought at Rs 65 and Sesa Goa at Rs 750. — K. Ramesh, K. Jawahar

Gujarat Ambuja Cement (Rs 64.5): After a short-term corrective phase, the stock is likely to resume the uptrend. A move to the Rs 85-90 range appears likely.

Remain invested with a stop-loss at Rs 60. A close below Rs 60 would delay the recovery process; but it would not affect the long-term positive outlook.

Sesa Goa (Rs 714.3): After a sharp run-up in price, the stock has been in a corrective phase in the recent weeks.

Though the share price has recovered ground in the past few days, it is not clear if the earlier corrective phase is complete and the recent recovery marks the resumption of the long-term uptrend.

Investors may hold with a stop-loss at Rs 690. Those who have either entered at relatively lower levels or willing to take risk may have the stop-loss at Rs 630.

The stock is likely to dart back to the Rs 850-900 range in the next leg of the rally.

The positive view would be negated if the share price closes below Rs 430.

Based on your recommendation, I purchased Gammon India at Rs 294. The share price has, however, been on a downtrend since then. Is the original view still valid? What is the outlook for UCO Bank bought at Rs 37? — H.C. Puri

Gammon India (Rs 266.5): The stock has not moved in line with our expectations. It has also dropped below the stop-loss level of Rs 274.

This has effectively negated the earlier bullish view of a rally to the Rs 360-370 range.

The breach of this level has imparted short-term bearish trend. The long-term trend, however, remains bullish and the breach of the Rs 274-level would only delay the eventual rally towards the target zone of the Rs 360-370 range.

It would always be prudent to re-enter on fresh "buy" signals instead of holding to a stock after the stop-loss has been breached.

Investor may sell at least a portion of the holdings now and have a stop-loss at Rs 250 for the rest.

UCO Bank (Rs 31.0): Investors may find opportunities to exit at the Rs 38-40 range, as the near-term trend appears positive.

The positive outlook would be under threat if the stock closes below Rs 26.

Remain invested with a stop-loss at Rs 26 and use a trailing stop-loss in the event of a sustained uptrend.

What is the medium-term outlook for IPCL, which I bought at Rs 187? — C.P.K.Ahmed, S.Sharma

IPCL (Rs 187.9): Remain invested with a stop-loss at Rs 170. The stock could move to the Rs 215-220 range in the near term.

The positive outlook would be negated if the stock closes below the stop-loss level at Rs 170.

Partial profit booking may be considered on the evidence of resistance at the Rs 215-220 range.

Please advise whether to hold or sell Sundram Fasteners. — D.Vivekanandan

Sundram Fasteners (Rs 132.6): The long-term outlook for the stock is positive and a move to the Rs 160-165 range appears likely. The stock tends to accumulate gains in a gradual manner.

The price history is characterised by distinctive bouts of a sharp increase in volatility and a surge in price that is typically followed by an extended stretch of range-bound action. Given this backdrop, it would be advisable to remain patient as this would be the key determinant of return on investment from this stock.

Remain invested with a stop-loss at Rs 120.

I have purchased CRISIL at Rs 1050. Please advise whether I can hold the shares for long term or sell at prevailing levels. — K.G. Aparna

CRISIL (Rs 1052.8): After a sharp run-up in price in the past few months, the stock has moved into a corrective phase since early June.

This corrective phase does not appear as yet. Risk-averse investors may sell a major chunk of their holdings now and retain the balance with a stop-loss of Rs 970.

It would be better to stay clear of stocks that are in a corrective phase as this would mean funds being locked-up in an unproductive asset.

It would always be prudent to switch to stocks that are either in a trending phase or look to re-enter the stock on fresh entry signals.

A "buy" signal would be triggered if the stock closes above Rs 1210.

Exposures may be considered afresh once the stock closes above this level.

I have held a huge quantity of Ramco Industries. I want to have your views before taking a decision regarding my holdings. Mrs L. Krishnamoorthy

Ramco Industries (Rs 938.5): The stocks from the asbestos cement products industry have posted handsome returns over the past few years and Ramco Industries is no exception.

The upward move is not complete and the stock could move to the Rs 1100-1150 range.

Given that you are holding the stock for a quite a while and taking into account the upside potential, it would be advisable to remain invested. Partial profit booking may be considered if the share price declines below the first stop-loss level at Rs 850.

Exposures may be trimmed further on a close below Rs 800.

Please let me know whether to hold California Software bought at Rs 125 and Panacea Biotech bought at Rs 145? — Harish Pejavar, D. Prashanth

California Software (Rs 114.6): The outlook is positive and the stock could move to the Rs 155-160 range shortly. The trend would turn bearish if the stock closes below Rs 85. Investors may hold with a stop-loss at Rs 85 for a portion of the holding and at Rs 100 for the balance. At least, partial profit booking may be contemplated on a move to the Rs 155-160 range.

Panacea Biotech (Rs 191.5): Hold with a stop-loss at Rs 160 as the long-term outlook is bullish. The stock could move to the Rs 225-230 range. Taking into account the upside potential and your entry price, there is no reason to exit now. Fresh exposures may be considered on a break above Rs 200, with a stop-loss at Rs 175.

I bought Maruti Udyog at Rs 350. Should I hold or sell considering that the stock has underperformed the market in the recent months. — Rahul Singh

Maruti (Rs 482.7): Given the not-so promising outlook and the fact that the stock has already underperformed the broad market indices, it would be advisable to sell at least a portion of the holdings at prevailing levels.

Stop-loss for long positions may be placed at Rs 440.

It would be better to switch to stocks that are in a trending mode, especially to the ones that have outperformed the indices.

I would like to have your views on Kotak Mahindra Bank, which is trading at a fairly stiff valuation. — M.Sunita

Kotak Mahindra Bank (Rs 426.2): The stock has been among the top performers in the banking space. It has seen on a steady uptrend over the past couple of years and the upward move does not appear complete. A move to the Rs 475-480 range appears likely. Considering the positive outlook, there is no reason to sell the stock.

Though the stock may appear stiffly priced, it does not necessary mean that the upside potential is capped. Based on technical analysis, the outlook and target can be arrived with a reasonable degree of accuracy. The reason for the anticipated move cannot, however, be ascertained.

More importantly, investors need to stick either to the fundamentals of the company or technical analysis. They are two distinct approaches to investment and combining these two would invariably lead to confusion. We also wish to highlight that there is nothing incongruent or illogical if the recommendation based on technical analysis that is featured in this page is at odds with the recommendation based on fundamentals featured elsewhere.

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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