The Hindu Business Line : Query Corner

I hold Alok Industries at an average price of Rs 60. I am willing to hold on to this stock for the long-term (3 to 5 years). Can I add to my quantity at these levels? Or would it be wise to exit and re-enter later? Babita Singh, S. Kumar

Alok Industries (Rs 71.2): The long-term bull market is intact in this stock. As you are a long-term investor, it would not be advisable to exit now and re-enter later, as the downside seems to be limited to Rs 50. Long-term investors should exit this stock only if there is a close below Rs 50.

For the medium-term, a sideways move between Rs 60 and Rs 80 is expected. A breakout past Rs 80 is required to take the price towards Rs 100.

I request you to review the prospects of Balmer Lawrie & Kilburn Engineering. Vardhan

Balmer Lawrie (Rs 405.1): This stock is stuck in a range between Rs 310 and Rs 450 since June. The stock has been unable to shake off the bearishness that has gripped it since the price hit a high of Rs 675 in March. The short-term resistance exists at Rs 465. Fresh buys should be initiated only if the stock closes above Rs 465. Long-term investors can hold the stock with a stop at Rs 280.

Kilburn Engineering (Rs 73.9): This stock is more suitable for folks who love adventure sports like bungee jumping or rock climbing. The stock jumped off a cliff from a high of Rs 75 in June to land at Rs 30. There has been a sharp climb from these depths, back to all-time highs. The Rs 75 level will act as a short- term resistance. Short-term investors can hold the stock with a stop at Rs 66. The target beyond Rs 78 is Rs 90.

I am holding ITC purchased at Rs 200. What is the future of this stock? Kindly advise. Sreekesh N., Dhananjay D., K. Kavitha

ITC (Rs 187.9): The long-term outlook for ITC will stay positive till we have a weekly close below Rs 165. This stock has been moving between Rs 192 and Rs 175 since September. This is a positive consolidation that comes after a three-wave move from the low of Rs 144.

A breakout above Rs 195 will mean that the third leg of the intermediate upmove from the June low is on. That would give the stock medium-term targets of Rs 202 and Rs 226. Hold with a stop at Rs 169.

I am holding shares of Tata Sponge bought at Rs 165 in last June. Kindly advise the mid-term prospects to help one decide whether to sell at prevailing rates. P. R. Sukumar

Tata Sponge (Rs 96.1): The scrip has been on a downward trajectory since February 2005 when it peaked at Rs 233. However, long-term support exists in the band between Rs 90 and Rs 100, where the stock is currently halting. A fall below Rs 90 will take the price to Rs 82. Any short-term rally will have trouble getting past Rs 110.

I had purchased shares of M&M at Rs 493.7. Should I accumulate more shares now as a long- term investor?

Mahindra and Mahindra (Rs 840.4): M&M has been a strong performer since June, gaining 71 per cent in the interim period. There is a possibility of another upward-moving wave in the short term taking the stock to a high of Rs 894 or Rs 946. Some profit taking is expected as the price nears Rs 1,000.

As you are a long-term investor, hold with a stop at Rs 745. Accumulate in dips with the same stop.

I have bought Simplex Infrastructure at Rs 391 per share. Please comment on the medium- and long-term prospects. V. N. Ramalingham

Simplex Infrastructure (Rs 400.2): The movement of the stock since September can be fit in to an upward moving channel. This is a bullish pattern and gives the stock upward targets of Rs 481 and then Rs 536. Hold the stock with a stop at Rs 360. Fresh buying can also be done with the same stop.

Please let me know the prospects of Chemplast Sanmar. A. B. Desai, P. P. Joy, Joseph Jacob

Chemplast Sanmar (Rs 6.7): This stock is reacting after hitting a high of Rs 8.6 in August. This is a formidable resistance and the stock will have trouble crossing over it for the next six months to one year, as it is the 61.8-per cent retracement of the fall from the high made in July 2005. A rally past Rs 8.6 is required to take the price towards Rs 10.

Short-term support exists at Rs 6.2. Hold the stock with a stop at Rs 6. Fresh buys can be initiated if the price bounces off Rs 6.

Kindly advise me about India Cements. What is support level and targets for short-term? Rupali, Jaiprakash

India Cements (Rs 237.8): This stock rallied strongly from a low of Rs 103 in June to Rs 225 in September. A consolidation was evident on the charts since September. The recent reversal from the low of Rs 205 in November promises to take the price higher to Rs 279 or Rs 326. Hold the stock with a stop at Rs 227 if you are a short-term investor. Long-term investors can keep a deeper stop at Rs 220.

I bought MTNL at Rs 155. Now it is going down. Should I hold this share or not? Kanchan Garg, K. Ashok, Sathyabama, R. Kalaiarasu

MTNL (Rs 136.9): In our last review of the stock on August 6, we had advised initiating fresh positions only if the price crossed Rs 168. The price struggled with the Rs 165 level in September before succumbing to selling pressure and hitting a recent low of Rs 128. Short-term support is available in the zone between Rs 125 and Rs 140. If this zone is breached, there can be a fall to Rs 110. Hold with a stop at Rs 123 if you are a short-term investor. We still hold the view that long-term trend will turn negative only if the price falls below Rs 110.

What is the outlook of Archies Greetings bought at Rs 189 and Indraprastha Medical Corporation bought at Rs 39? Please suggest whether to hold or exit at this level. Bharath P, Y. S. Rao

Archies Greetings (Rs 181.3): This stock is in a strong intermediate-term uptrend. The positive outlook for the intermediate term will be threatened only if there is a fall below Rs 150.

Hold the stock with a stop at Rs 155.

A sideways consolidation between Rs 160 and Rs 200 will form a good base from which the price can move higher to Rs 228 and then Rs 265.

Indraprastha Medical (Rs 35.1): This stock is consolidating in a range between Rs 32 and Rs 39 since September. The price is unable to break past the ceiling at Rs 40. If Rs 40 is breached, the next resistance is at Rs 43. The bulls will be back in control only if the price rises past Rs 43.

However, the wave patterns since the June don't look promising and we can see the price moving to Rs 50 over the next three to six months. Short-term investors can book profit at about Rs 40. Long-term investors can hold with a stop at Rs 30.

I have purchased 100 shares of Marg Construction at Rs 160 and 100 shares of Fedder's Lloyd at Rs 110. Please let me know the future prospects of the above shares. Mantha Rama Devi.

Marg Construction (Rs 242.3): This stock is racing ahead as are the other stocks in this sector. The past week has seen a spurt in volumes, which is a good sign. Keep a 20 per cent trailing stop (to absorb the high degree of volatility) and hold this stock. The price is heading towards Rs 300. But do not hesitate to book profits if the price falls below Rs 200.

Fedder's Lloyd (Rs 132.8): Fedder's Lloyd is moving in a broad range between Rs 90 and Rs 150 since July. Short-term resistances for this stock exist at Rs 147 and then Rs 160. Chart patterns suggest that the price will have difficulty surpassing the Rs 160 level over the next few months. Book profits at these levels. Re-entry can be considered around Rs 110 again.

Please let me know the outlook of Moser Baer. Can I enter at the current level? Susanta Rana

Moser Baer (Rs 263.9): The long-term chart of this stock shows sideways movement since July 2004. The price has just broken past the upper boundary of this range that exists at Rs 230. Investors can buy on dips with a stop at Rs 230. Some traces of weakness are evident on the daily charts. But the stock can find support at Rs 245 and then Rs 230. Target for the medium term is Rs 320.

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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