The Hindu Business Line : Query corner

A close below Rs 850 would push the stock into a corrective phase and a breach of the Rs 810 level would negate the positive outlook, and also impart a bearish trend.

What is the outlook for Datamatics Technologies bought at Rs 110 and D-Link at Rs 136? — S. Karthikeyan

Datamatics Technologies (Rs 101): There is a strong resistance at the Rs 112-116 range.

Only a move past Rs 117 would impart strength while a close below Rs 94 would indicate weakness.

A close above Rs 117 would help the stock move to the next target zone of Rs 135-140.

Remain invested with a stop-loss at Rs 94. Fresh exposures may be deferred.

A trailing stop-loss may be employed in the event of a run-up in price.

D-Link (Rs 139.7): A drop below Rs 130 would impart short-term weakness and a close below Rs 110 would push the stock to a low of the Rs 85-90 band.

Hold with a stop-loss at Rs 129 for a portion of the holding and at Rs 109 for the balance. On the upside, the stock faces resistance at the Rs 160-165 range.

What is your view on Ashok Leyland and Titan Industries? — R.C. Babu

Ashok Leyland (Rs 28.4): The short-term trend appears bearish and a drop to the Rs 26-27 range appears likely.

The stock is, however, likely to get into a bullish mode on the completion of the ongoing corrective phase.

Remain invested with a stop-loss at Rs 24. The stock is likely to move to the target zone of the Rs 32-33 range once the correction is over.

Titan Industries (Rs 499.2): The stock has seen a sharp flare-up in value in the recent months.

The recent upward trend does not appear complete. After a short-term corrective phase, the stock is likely to move into the upward trending phase.

The next leg of the upward move could take the stock to the next target zone of the Rs 600-610 range.

The positive view would be valid as long as the stock holds above the stop-loss level of Rs 450.

What are the prospects for SRF, which has already moved past your target of Rs 300? I also bought KEC International at Rs 219. Shall I hold or sell these stocks? — Abhayakumar Shah

SRF (Rs 298): The near-term trend appears bearish and a drop to the Rs 260-265 range appears likely.

The long-term trend is positive and the stock is likely to resume the bullish move on the completion of the expected drop in price.

A move past Rs 310 would indicate that the stock has resume the upward move towards the next target zone of the Rs 340-350 range.

Hold with a stop-loss at Rs 259. Fresh exposures may also be considered on price weakness with a stop-loss at Rs 259.

KEC International (Rs 220.5): The share price has been on an uptrend in the past few months.

The upward move does not appear complete. A move to the Rs 325-330 range appears likely. It is not advisable to sell the stock now.

Investors with a long-term orientation may consider fresh exposures with a stop-loss at Rs 190.

Exposures may be enhanced on a close above Rs 229. A close below Rs 190 would warrant dilution of holdings.

Should I hold or sell Rico Auto bought at Rs 81? — Ajith Thomas

Rico Auto (Rs 88.8): After an extended period of consolidation, the stock appears to have staged a breakout in the past couple of days.

The pick-up in trading volume and the increase in price suggests that the next leg of the upward move is underway. Remain invested with a stop-loss at Rs 76.

Tighten stop-loss or partial profit booking may be considered when the stock moves to the target zone of Rs 128-130.

What are the prospects for BHEL? — Sudhir Padhye

BHEL (Rs 1058.1): Price weakness is likely to be arrested at the support level at the Rs 960-970 range.

The stock is likely to seek support at this range and resume the uptrend subsequently.

The long-term trend is bullish and a move to the Rs 1190-1200 range appears likely. Investors may hold with a stop-loss at Rs 950.

Fresh exposures may be considered on price weakness, with a stop-loss at Rs 950.

Please let me know whether to hold or sell Bank of Rajasthan bought at Rs 54 and Vijaya Bank at Rs 68. — Shantha Parmesh

Bank of Rajasthan (Rs 54.7): The price movements over the past few weeks have been devoid of any significant trend.

It is generally advisable to stay clear of stocks that are not in a trending mode, as the money invested would not yield any returns owing to price inactivity.

Investors may sell a portion of the holdings now and have a stop-loss at Rs 45 for the rest. The stock would get into a trending mode only if it closes above Rs 65.

Till this materialises, it would be safer to stay away from this stock.

Vijaya Bank (Rs 65.2): An explosive move appears be just round the corner if the recent price patterns are an indication.

The stock has been in an extended phase of consolidation. It has been moving in a tight range for quite some time now and has lagged the broad market indices.

Hold with a stop-loss at Rs 56. A close above Rs 68 would indicate that the stock is headed towards higher levels of Rs 78-80.

A close below Rs 56 would push the stock down to the Rs 46-48 range.

Will it be reasonable to expect a 25-30 per cent return on UTI Bank bought at Rs 220 and Orchid Chemicals at Rs 300? I bought these stocks a year ago and willing to hold them for another six months if my target return is achievable. — S. Ranganathan

UTI Bank (Rs 261.6): There is a fair chance that the stock would fetch your expected return over a holding period of six months.

The positive view would be negated if the stock were to close below the stop-loss level of Rs 230.

A close below Rs 230 would warrant dilution of equity holdings in the company.

Orchid Chemicals (Rs 368.6): The stock appears to be headed towards the target zone of Rs 390-400.

Given the positive outlook, it would be advisable to remain invested with a stop-loss at Rs 318.

Investors who are risk averse may settle for a stop-loss at Rs 339.

Should I hold or sell Chennai Petroleum bought at Rs 209? — Janakiraman Shankar

Chennai Petroleum (Rs 197.4): The long-term uptrend would assert itself on the completion of the present corrective phase.

There is no point selling now as the stock could recover towards the Rs 245-250 range once the correction is over.

Investors need loads of patience in this stock, as corrective phase is completed over a lengthy period.

What is the outlook for Bongaigaon Refineries bought at Rs 92 and Aplab at Rs 124? — Tushar & Sumeet Khurana

Bongaigon Refineries (Rs 84.3): There is a plan to merge the company with its parent company - Indian Oil Corporation.

Without taking into account the merger, the price pattern of the company does not portray a bullish picture.

Investors may sell a major chunk of their holdings as the stock could drop to the Rs 55-60 range.

The negative view would be invalidated if the share price closes above Rs 105.

Aplab (Rs 134.5): The outlook is positive and a move to the Rs 175-180 range appears likely.

A close below Rs 120 would, however, result in the completion of a bearish "head and shoulder" pattern.

The stock could drop subsequently to the Rs 98-100 range. Hold with a stop-loss at Rs 120.

What are the prospects of Federal Bank bought at Rs 190 and Bharti Tele-Ventures bought at 285? — Rakesh

Federal Bank (Rs 191.4): The outlook is positive and the share price could move to the Rs 215-220 range shortly. Stop-loss for long positions may be placed at Rs 178. Fresh exposures may also be considered on a move past Rs 198, with a stop-loss at Rs 186.

Bharti Tele-Ventures (Rs 310.7): The share price appears to be headed towards the long-term price target of the Rs 390-400 range. Given the positive outlook, shareholders may remain invested with a stop-loss at Rs 278. Fresh exposures may also be considered on price weakness, with a stop-loss at Rs 278. Investors may book partial profits if the stock faces resistance at around the Rs 390-400 range.

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)

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page