The Hindu Business Line : Query corner

Jaiprakash Associates (Rs 286.7): The outlook is positive and the share price appears to be on course to move to the target zone of the Rs 320-330 range mentioned a couple of weeks ago.

The positive view would be valid as long as the stock holds above the stop-loss level of Rs 250. Taking into account the upside potential, investors may hold with a stop-loss of Rs 250. A close below Rs 240 would blunt the positive outlook.

What is the outlook for Sonata Software Rs 32.4? — S. Viswanathan

Sonata Software (Rs 30.5): After a sharp run-up in price, the stock has been on a protracted phase of correction. As a result, the volatility has subsequently dropped considerably in the past few weeks. This is normally a precursor to a sharp move.

Taking into account the price patterns in the daily and weekly charts, a move to Rs 38-40 may be round the corner. Remain invested with a stop-loss at Rs 25.

What is the target price and stop-loss level for BOC India bought at Rs 126? — Abhayakumar Shah, Rao

BOC India (Rs 138.7): A move to the Rs 155-160 range appears likely. Hold with a stop-loss at Rs 125. The long-term outlook is also bullish and investors willing to wait for at least six months may find opportunities to exit at levels beyond Rs 200.

The long-term positive outlook would be valid as long as the stock holds above the stop-loss of Rs 110.

Please let me know whether to hold or sell Gail bought at Rs 300 and VisualSoft at Rs 158? — P. Padmanabha Rao, M.Swaminathan

Gail (Rs 232.3): The share price has been stuck in trading zone for quite a while now. There are no signs of the stock moving out of the zone. It would be better to sell a portion of the holding at prevailing levels and switch to a stock that is in a trending mode.

At the moment, a bullish trend is unlikely to kick-in unless the stock closes above Rs 250. Stop-loss for long positions may be placed at Rs 220.

VisualSoft (Rs 176.9): Taking into account your entry price and the positive short-term outlook, it would be advisable to hold with a stop-loss at Rs 145.

The stock appears to be headed towards the immediate target price of the Rs 205-210 range. A close below Rs 140 would warrant dilution of holdings.

Kindly let me have your views on Maruti Udyog and MRPL? — Sangeeta Kapoor

Maruti Udyog (Rs 474.8): You have bought the stock at the crucial resistance level at the Rs 508-510 range. The stock appears to have completed a potential "double top" pattern.

Though there is confirmation of the completion of this pattern, the prospects do not appear promising. Only a close above this resistance zone would impart bullishness.

Hold with a stop-loss at Rs 454 (on the basis of spot market price). Use a trailing stop-loss in the event of an upward move.

MRPL (Rs 49): It is better to exit from the stock, as it is not in a trending mode. Remaining invested in non-trending stocks would lead to a loss of opportunity to make money elsewhere.

Switch to a stock that is in a trending phase as you stand a better chance of making money by doing so. Investors who have entered at fairly lower levels may hold a portion of the holdings with a stop-loss at Rs 40.

What is your view on Mangalore Chemicals and Fertiliser bought during the IPO? — P.K. Dinesh

Mangalore Chemicals (Rs 19.8): The near-term outlook is positive and a move to the Rs 25-26 range appears likely. Hold with a stop-loss at Rs 16. A trailing stop-loss may be used in the event of a rally in prices. The trend would turn bearish if the stock closes below Rs 15. Get out of long positions if the stock closes below Rs 15, as the trend would turn bearish subsequently.

What is your view on Kotak Mahindra Bank and Centurion Bank? — M.K.Jain, Suman

Kotak Mahindra (Rs 214.8): The outlook is positive and only a move below Rs 170 would negate it. Hold with a stop-loss at Rs 170 as the stock could move to the Rs 245-250 range shortly. A close below Rs 170 would warrant dilution of holdings.

Centurion Bank (Rs 17.1): The stock's long-term outlook is positive. It could, however, seek lower levels in the near term. A test of the Rs 11-12 range appears likely. The stock, however, would resume the long-term uptrend on the completion of the expected short-term correction. A close above Rs 18.5 would indicate that the stock is on its way towards the target zone of the Rs 28-30 range. It would worth the risk to hold with a stop-loss at Rs 10.

Though it is not advisable to have such a wide stop-loss, the long-term positive outlook and the upside potential would justify the higher risk.

What is the outlook for ING Vysya Bank bought at an average rate of Rs 175? — P.C. Agarwala

ING Vysya (Rs 166.2): A close below Rs 130 would impart weakness. The trend would be bullish till such time the stock trades above this level. Investors may hold with a stop-loss at Rs 130.

The stock could move to Rs 215-220 once it closes above Rs 178. A close below Rs 130 would require dilution of exposures.

I bought a chunk of Hexaware Technologies at Rs 104. Kindly advise about the prospects of the company. — Cherian K. Anthrayose

Hexaware (Rs 101.4): Hold with a stop-loss at Rs 94. There is possibility of a short-term recovery to the Rs 120-125 range.

The stock, however, is likely to resume the earlier downtrend on the completion of a short-term bounce. Look to reduce exposures on an upward move in price.

Is it advisable to hold or exit from Teledata Informatics? — Ashok Handa, N. Selvaraj, Rajesh Sharma, Niteen Kulkarni

Teledata Informatics (Rs 31.3): The stock could labour its way to the target price of the Rs 36-38 range in the near term. The outlook would turn bearish if the stock closes below the stop-loss level of Rs 26. Hold with a stop-loss at Rs 26 and use a trailing stop-loss if the stock moves past the target zone. Fresh exposures may be avoided.

What is your view on Rolta purchased at Rs 100? — Rao

Rolta (Rs 144): The outlook is positive and a move to the Rs 165-170 range appears likely. Investors may hold with a stop-loss at Rs 119. Fresh exposures may also be considered on price weakness, with a stop-loss at Rs 119. Partial profit booking may be considered on the evidence of weakness at around the Rs 165-170 band.

Is it advisable to switch from Bellary Steel and Pasupati Acrylon to Gayatri Sugars and Transpek Industries? — Ritesh Thakkar

The outlook for Transpek Industries appears positive and the stock could move from the present level of Rs 84 to the Rs 115-120 range. Owing to lack of sufficient historical price data, it is difficult to arrive at the outlook for Gayatri Sugars. Considering that both Bellary Steel and Pasupati Acrylon, too have upside potential, it would be advisable to sell a portion of these stocks and invest the proceeds in Transpek.

What does the chart pattern indicate about the prospects for Sail? — T.P. Bhola, P.S. Rao, V. Velappan Nair

Sail (Rs 62.4): A close above Rs 66 would indicate that the share price is headed towards the Rs 78-80 range. On the other hand, a close below Rs 55 would have negative implications. Remain invested with a stop-loss at Rs 55. Price weakness may be used to buy the stock with a stop-loss at Rs 55.

Please advise if I should hold on to i-flex bought at Rs 644 last year. — R. Priya

i-flex (Rs 965.3): The stock has been on a sharp uptrend in the recent months which does not appear complete as yet. A move to the Rs 1150-1200 range appears likely. Taking into account your entry price and positive outlook, it would be better to hold with a stop-loss at Rs 840. Fresh exposures may also be considered on price weakness, with the same stop-loss.

Please advise on my holdings in KPIT Cummins at Rs 365 and Sesa Goa at Rs 741. — Usha Mohan, Shailesh

KPIT Cummins (Rs 289): The stock could get into a short-term uptrend which would be a correction to the earlier fall. A move to the resistance zone at the Rs 325-330 range appears likely. The share price would, however, struggle to get closer to your entry price. Look to reduce exposures on price rally. Reduce exposures on a drop below Rs 265.

Sesa Goa (Rs 728.6): There is no change in the outlook featured in earlier weeks. Readers are requested to log-on to our Web site www.blonnet.com and access the archives section to read the view.

Please let me have your views on and Tata Metallik. — Dasari

Tata Metallik (Rs 148.2): The share price recorded a sharp upward move during 2004. It has since been on a major corrective phase in the past few months.

There is no evidence to indicate the completion of this corrective move. The long-term uptrend would take the stock past the Rs 200 mark on the completion of the present correction.

Investors with a long-term mindset may remain invested with a stop-loss at Rs 115. The stock could be included in the portfolio on price weakness, with a stop at Rs 115.

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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