The Hindu Business Line : Query Corner

Reliance Communications (Rs 446.5): This stock made a significant long-term low at Rs 231 on July 24, 2006. It has had a dream-run since then, gaining over 100 per cent. The stock has been moving in a band between Rs 390 and Rs 490 since December 6, 2006. This sideways move can be a precursor to the stock moving up in the third leg of the move that started in July 2006. Dips to the zone between Rs 390 and Rs 400 should be utilised to buy this stock with a stop at Rs 385.

If the stock sustains above Rs 390, it can move higher to Rs 535 and then Rs 626 over the next one year. But a dip below Rs 390 will weaken the intermediate trend and pull the price lower to Rs 340 or even Rs 300.

I am holding MCF bought at Rs 18 and Karnataka Bank. Please tell me should I hold or exit. Giri

Mangalore Chemicals (Rs 18.10): The scrip hit a high of Rs 22.3 in August 2005. It is nearing this level again. The stock has long-term resistance zone between Rs 22 and Rs 24. It would be prudent to book some profits at these levels. Re-entry can be considered on a firm close above Rs 24.

Karnataka Bank (Rs 159.10): This stock is in a strong long-term and intermediate-term uptrend. Hold the stock with a stop at Rs 135. Dips can be used to add to your position with the same stop. The targets for Karnataka Bank over the next year fall at Rs 189 and then Rs 265.

I am holding shares of SSI. Please advise me on medium- to long-term levels and also let me know if I can accumulate more at current level. Rajesh Sanghvi

SSI (Rs 187.5): The stock made a sharp move up from a low of Rs 100 in August 2006 to Rs 190 in November 2006. The price has been moving in an upward moving channel since then in a bullish formation. Immediate resistance for the stock exists at Rs 200. A breakout past this zone will take the stock to Rs 240 or Rs 312. The stock can be accumulated at current levels with a stop at Rs 178.

Kindly advise me on Engineers India bought at Rs 530. What is the target and stop loss? Sameena

Engineers India (Rs 566.8): This stock may have made a significant long-term low at the August 2006 low of Rs 410. It consolidated in a band between Rs 450 and Rs 550 from August to December 2006. The weekly chart is beginning to turn conducive to a sustained uptrend. The break out witnessed last week was accompanied by a sharp spike in volumes and has taken the price past its long-term averages.

The stock has the short-term target of Rs 634. A breakout past this level would take the stock to the next target of Rs 780. Hold the stock with a stop at Rs 550, if you are a short-term investor and with a stop at Rs 500 if you invest with a one- to two-year time horizon.

I am holding a few shares of GSK Pharma purchased at Rs 1,500. I would appreciate your valuable opinion on whether to hold on to it or exit at the current level. I also wish to know if it is advisable to consider buying Suzlon Energy with a long-term perspective. R. Haridas

GSK Pharma (Rs 1,143.1): The fall in May 2006 in this stock made it lose 50 per cent from its all time high peak of Rs 1,550. GSK Pharma reversed from the low of Rs 890 formed at the end of May and is currently in an intermediate term up trend. The immediate support for the stock lies at Rs 1,049. If this support holds over the next one month, the stock can move higher to Rs 1,285 or even Rs 1,432. Hold with a stop at Rs 1,040. Exit if the stock falls below Rs 1,040 and try to re-enter around Rs 950.

Suzlon Energy (Rs 1263.4): The stock is halting at important support levels. But the near-term chart pattern suggests further weakness for the short term. Unless the stock rises above Rs 1,390 over the next two weeks, it can weaken and fall to Rs 1,146 or Rs 1,060. Since, you are contemplating an entry for the long-term, wait for a close above Rs 1,400 before entering the stock. Conversely, you can buy the stock if it falls to Rs 1060 levels.

Could you explain the future outlook for ISMT Ltd and Essar steel Ltd? Anil Kumar

Indian Seamless Metal Tubes (Rs 86.1): The stock is oscillating in a band between Rs 65 and Rs 95 since June 2006. If the price crosses Rs 95, it will face resistance at Rs 102. Inability to move above Rs 95 will see the price moving lower to Rs 65 and below that to Rs 50. Fresh buys should be initiated only if the price rises above Rs 105.

Essar Steel (Rs 43): The scrip is in a strong long-term down trend. But the first signs of reversal are visible on the weekly chart. The price can rally to Rs 48 in the short term. But the Rs 48 level needs to be breached strongly if the price has to rise towards Rs 57. Those holding the stock can keep a stop at Rs 37. Those contemplating entry can do so once the stock closes above Rs 48.

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.

Lokeshwarri S.K.

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