The Hindu Business Line : Query corner

What is your view on Syndicate Bank and Cummins India? Will it be advisable to take long positions in the futures market in these stocks? — Kanchan Garg

Syndicate Bank (Rs 84.6): The recent uptrend is not over as yet. Taking into account the recent fancy for banking stocks, long positions may be considered for trading purposes. Stop-loss for long positions may be placed at Rs 78.

The short-term price target for the stock is Rs 98-100. Investors need to be aware that the price levels mentioned are spot market prices.

Cummins India (Rs 158.6): This stock is more suitable for the traders who believe in the "buy-and-hold" strategy. This is unsuitable for short-term trading purposes.

Considering that the long-term trend is positive, investors may buy the stock for long-term holding.

There would be opportunities to exit at Rs 198-200 for investors willing to wait for at least a couple of months. Stop-loss for long positions may be placed at Rs 140.

What is the outlook for Gujarat Ambuja Cement? — Sai Vignesh, Antony R Costa

Gujarat Ambuja Cement (Rs 73.6): The stock appears to be headed towards the Rs 85-90 range in the near term. Remain invested with a stop-loss at Rs 67.

Exposures may be enhanced on weakness, with a stop-loss at Rs 67. A close below the stop-loss level would warrant liquidation of long positions. Investors with a long-term perspective may settle for a stop-loss at Rs 60.

What is the long-term potential of Amtek India bought at Rs 112? — M.K. Jain

Amtek India (Rs 111.8): As the long-term trend is bullish, investors may hold with a stop-loss at Rs 98.

A move to the immediate target zone of the Rs 135-140 range appears likely. This view would be valid as long as the stock holds above the stop-loss level of Rs 98.

Long-term investors may book partial profits when the stock moves to the Rs 200 mark.

Should I hold or sell Mangalam Cement purchased at Rs 89 and United Western Bank at Rs 68.6? — G. Natarajan

Mangalam Cement (Rs 90): The long-term trend is positive and a move to the Rs 115-120 range appears likely. Remain invested with a stop-loss at Rs 79.

Fresh exposures may also be considered on price weakness, with the same stop-loss. A close below Rs 79 would warrant dilution of holdings.

United Western Bank (Rs 63.1): The price pattern does not throw meaningful clues above the near-term trend.

The stock could seek higher levels on a close above Rs 70 and would turn weak on the breach of the Rs 60 mark.

The price movement in the next few days is likely to have a major influence on the near-term trend.

Kindly advise about my holdings in FDC bought at Rs 56. — Rohit C. Kalaskar

FDC (Rs 53.3): As observed earlier (edition dated July 31), the outlook remains bullish. The stock appears on course to move to target zone of Rs 68-70.

There is no reason to sell the stock, as there is significant upside potential from a long-term perspective.

The positive view would be in force as long as the stock holds above the stop-loss level of Rs 48.

What is the outlook for Dena Bank and Mahindra and Mahindra? — S. Prashanth

Dena Bank (Rs 36.7): The stock could move to the immediate target price of the Rs 43-45 range.

The positive view would be negated on a close below Rs 31.

Remain invested with a stop-loss at Rs 31.

A trailing stop-loss may be used in the event of a steady run-up in price beyond the target zone.

Mahindra & Mahindra (Rs 375.7): Despite the sharp rise in the past few months, there appears to be some room to be covered on the upside.

A move to Rs 445-450 may be on the cards.

The view would be valid till such time the stock holds above the stop-loss level of Rs 335.

Remain invested with a stop-loss at Rs 335. Fresh exposures may also be considered on a weakness, with a stop at Rs 335.

Should I hold or sell Alstom Projects and UCO Bank? — H.C. Puri

Alstom Projects (Rs 202.4): The stock is in a corrective phase to the earlier rally. The corrective phase does not appear complete.

A drop to Rs 185-190 is not ruled out in the near term. The long-term uptrend towards the Rs 265-270 range would resume on the completion of this corrective phase. Remain invested with a stop-loss at Rs 185.

UCO Bank (Rs 33.1): The market interest towards banking stocks witnessed in the recent weeks has helped the stock recover from Rs 26 to current level of Rs 33.1.

The recent price action indicates the possibility of the rally extending up to Rs 39-40. Remain invested with a stop-loss at Rs 29.

What is your take on Alok Industries? Does it have the potential to go to the Rs 90 mark and if so, what would be the time frame? — M.S. Rama Rao

Alok Industries (Rs 83.4): The share price is on course to move to the price target of Rs 90. Investors willing to wait for a few months may even find exit avenues at the Rs 125-130 range.

The second part of your question pertaining to the time frame is tough to answer.

As far as we understand, it is difficult to arrive at time frame within which a target would be achieved or a reversal in trend may occur.

We do not have a mechanism to arrive at a consistently accurate measure of the likely time that would be required to achieve the projected target zone.

We seek your opinion on IDBI bought at Rs 83 and IPCL at Rs 185. Kindly advise whether to hold or switch to some other stock. — S. Ranganathan

IDBI (Rs 120.1): After lying low for quite a while, the stock has attracted market interest in the recent weeks.

The outlook is bullish and a move to the Rs 145-150 range appears likely. As the outlook is positive, remain invested with a stop-loss at Rs 105.

IPCL (Rs 221.7): Similar to IDBI, this stock too has been on an uptrend in the past few weeks.

This is one of the stocks we are bullish on, from a long-term perspective.

A move to the first target zone of the Rs 295-300 range appears likely. The positive view would be invalidated on a close below the stop-loss level of Rs 185.

Taking into account your entry price in these two stocks and the positive outlook, there is no reason to sell them.

A portion of the holdings may be sold in IDBI at the Rs 145-150 range, provided you have a compelling alternate investment choice in mind. If not, stay put in these stocks.

Kindly advise on my holding in Ginni Filaments and Garden Silk bought at Rs 53 and Rs 76 respectively. — Vishnu Kumar Gudi

Ginni Filaments (Rs 45.9): The recent downward corrective phase does not appear complete as yet.

A move past Rs 50 would be an early indicator of the continuation of the long-term uptrend.

The stock is likely to move to the Rs 65-70 range on the completion of the current corrective phase.

Remain invested with a stop-loss at Rs 38. Fresh exposures may also be considered on price dips, with a stop-loss at Rs 38.

Garden Silk (Rs 81.5): The outlook is bullish and a move to the target zone of the Rs 105-110 range appears likely.

The positive outlook would be in force, as long as the stop-loss level of Rs 69 is not breached.

Long positions may be considered at prevailing levels and on declines, with a stop-loss at Rs 69.

This is regarding Cosmo Films recommended by you earlier. You had mentioned that a move above Rs 87 would be bullish and it may touch Rs 123-130. A few weeks later, there was a recommendation in your paper recommending a sell based on fundamentals. Now that the stock has moved past Rs 87, has it turned bullish and is it advisable to buy the stock now? — Vinod

Cosmo Films (Rs 86.3): We wish to emphasise that there would be occasions when the recommendation based on technical analysis featured on this page would be at odds with the fundamental research-based recommendation.

There is nothing incongruent about it, as they are based on two entirely different approaches to investment.

We would advise investors to stick to either one of these approaches. Any effort to derive superior results by blending the two approaches may often lead to confusion, erosion of capital and/or loss of investment opportunities.

Regarding Cosmo Films, we continue to maintain the "buy" recommendation, as the stock is yet to breach our earlier mentioned stop-loss level of Rs 50.

The recent price patterns tend to confirm our earlier view of a rally to the Rs 123-130 range.

Investors may hold with a stop-loss at Rs 70. Fresh exposures may also be considered with a stop-loss at Rs 70.

(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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