The Hindu Business Line : Query Corner

Nagreeka Exports (Rs 128.4): The stock is displaying considerable strength since it made a low of Rs 68 in August 2006. The short-term outlook will stay positive in this stock as long as it sustains above Rs 120. The short-term targets for the stock are Rs 154 and then Rs 171. Short-term investors can hold the stock with a stop at Rs 118. Long-term investors can keep a deeper stop at Rs 103.

Please let me know the short-term out look for Amara Raja Batteries and Subex Azure. Shenoy

Amara Raja Batteries (Rs 474.1): Amara Raja Batteries has had a spectacular run from the low of Rs 148 made in June 2006. The stock has already gained 226 per cent from this low. The long-term, intermediate-term and short-term trend is up in this stock. Though the low volumes witnessed on this counter since November is a cause for worry, there are no other perceptible signs of weakness in this stock. Short-term targets on the upside are Rs 530 and then Rs 573. Hold with a stop at Rs 400 if you are a long-term investor. Investors with a shorter time frame can hold with a stop at Rs 425.

Subex Azure (Rs 724.4): This stock is currently trading 21 per cent above its May 2006 highs. Subex Azure is looking strong from a long-term perspective. The target for this stock for the long term is Rs 749 and then Rs 993. The stock is presently trying to rally past the first target. Hold the stock with a stop at Rs 630. Fresh investments can also be made with the same stop.

I have bought 500 Varun Shipping at the rate of Rs 80 and 500 JK Lakshmi Cement at the rate of Rs 162 per share. Would you kindly explain what the targets would be for these stocks over the next one year? Mukteswar Maity

Varun Shipping (Rs 65.3): The long-term trend continues to be up in Varun Shipping. This stock is currently halting at the long-term support band that exists between Rs 60 and Rs 65. We expect the price to rally to Rs 75 and beyond that to Rs 84 over the next one year. But the Rs 84 level can cap the rally in this stock over the next one year. A break-out past Rs 84 will take the price beyond its previous all-time high of Rs 110. Hold with a stop at Rs 58.

JK Lakshmi Cement (Rs 172.6): This stock has made a long-term low at Rs 93 in July 2006. The immediate upward target is Rs 200. The target for the next one year would be Rs 254. Hold the stock with a stop at Rs 158. Fresh positions can also be initiated in dips with the same stop.

I have bought 150 shares of Manugraph Industries at Rs 240. I would like to hold these stocks for the long term. What is the prospect of this company? Murugesan

Manugraph Industries (Rs 216.8): Manugraph Industries reversed from a long-term low of Rs 175 in July 2006. The stock faces immediate resistance at Rs 265. The stock has reversed from this resistance level. It now has downward targets of Rs 205 and then Rs 175. The stock is now expected to move in a broad range between Rs 175 and Rs 265 over the next one year. A breakout past Rs 265 is needed the take the stock price to Rs 372 and then Rs 495. Hold the stock with a stop at Rs 210.

I have bought 200 shares of Tube Investments at Rs 88. What is the long-term outlook for this stock? I have also bought 1,000 Shares of Nagarjuna Fertilisers at the rate of Rs 17.70. What is the short-term outlook on this stock? Please advise. A.S. Vijay

Tube Investments (Rs 63.2): Tube Investments is in a severe down trend. The stock is currently ruling 50 per cent below the peak of Rs 131.6 made in January 2006. Short-term support for this stock exists at the June 2006 low of Rs 63. A fall below Rs 63 will take the price to the next support that exists at Rs 54. The stock can reverse above the long-term low of Rs 55 and launch in to its next long-term move up. You will have to be patient and hold the stock with a stop at Rs 50.

Nagarjuna Fertilisers & Chemicals (Rs 17): Nagarjuna Fertlisers has long-term resistance at Rs 20. This level has not been crossed since the year 2000. As the stock price is currently approaching this mark, it would pay to be careful. Hold the stock with a stop at Rs 15. Try to exit in the zone between Rs 18 and Rs 20. Fresh positions should be initiated only if the price closes above Rs 20.

I am holding 100 equity shares of Champagne Indage and 250 equity shares of Champagne Vineyards. Please advise whether I should hold these companies or exit them. N. V. Bapat

Champagne Indage (Rs 701.2): This stock has risen beyond the peak that it had made in 2006. The long-term outlook will stay positive as long as the price sustains above this peak, which is at Rs 450. Though there are signs of weakness in the momentum front, the short-term and medium-term trend are strong in this stock. Corrections are shallow and volumes are good.

The only concern is that, when such high momentum stock reverse, the fall is rapid and all exit routes are closed as buyers vanish. Hold the stock with a trailing stop of 20 per cent from its recent peak.

Champagne Vineyards (Rs 73.2): The chart of champagne vineyard is a classic example of how high momentum stocks move. It moved from one circuit to another, all the way from Rs 30 in November 2006 to Rs 111 in December 2006. This steep climb was followed by a sharp fall, again moving from one lower circuit to another to the low of Rs 69 in January 2007. The movement in 2007 is not comforting. The price is moving in a narrow band between Rs 70 and Rs 80. Fall below Rs 70 can take the price to Rs 62. Fall below Rs 62 will cause a sharp fall all the way back to Rs 30. You can exit this stock at current levels. Re-enter, if you must, when the stock rallies above Rs 95.

Aftek has come out with its third quarter numbers, should one enter now? What would be the short-term as well as long-term prospects for the share? Kamlesh Agrawal

Aftek Infosys (Rs 70.4): The advise given in the `techtrail' column are based on technical analysis alone. Technical analysis, as we all know is the study of the price and volume action of a stock. A direct comment on the third quarter earnings of Aftek is not possible here. But, an analysis of the stock price movement does indirectly study the effect of the third quarter numbers.

Aftek Infosys plummeted from a high of Rs 157 in September 2005 to a low of Rs 40 in June 2006. In the heady days of the dotcom bubble, when this stock made a high of Rs 667 seem like a dream now. The stock is yet to shake off the bear's grip for the short term. A rally above Rs 85 is required to make the short-term outlook positive. Enter in to this stock only if the price closes above Rs 85, with a short-term target of Rs 112 and long-term target of Rs 157.

Ion Exchange has moved up to Rs 140 after being stuck in the band between Rs 100 to Rs 110 for a long time. I have bought these shares for Rs 50 two years back. What are the next targets for the medium to long term? I have also bought Bayer CropScience. Express your opinion on the same. G. B. Joglekar

Ion Exchange (Rs 126.1): This stock has long-term resistance at Rs 150. This is the third attempt being made by this stock to rally above this level. If the stock gets past Rs 150, the next target would be Rs 175 and then Rs 199. The intermediate-term reversal made from the low of June 2006 is still relevant. Hold the stock with a stop at Rs 115.

Bayer CropScience (Rs 305.6): This stock has made a long-term reversal from the low of Rs 101 made in July 2006. Strong resistance for this stock exists at Rs 330. Breakout past Rs 350 will pave the way for a rise to Rs 500. Hold the stock with a stop at Rs 250. Fresh purchases can also be made in dips with the same stop.

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.

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