The Hindu Business Line : Query corner

Reliance Infrastructure (Rs 546.8): The stock has made a short-term low at Rs 464 from where it is currently trying to rally. Immediate resistance for this stock is available at Rs 609. We need this level to be cleared before the price can move on to Rs 675 or Rs 807. Exit part of your holding around Rs 600 if the stock struggles to clear this resistance. Hold the rest of your holding with a stop at Rs 525, since you seem to be a short-term investor. Investor with a longer time frame can keep a deeper stop at Rs 450.

I would like to know the technical view for Nectar Life Sciences, which I have purchased at Rs 284. I am ready to wait for one or more than year. D. S. V. Baba

Nectar Life Science (Rs 216.7): The stock is moving up steadily since the low of Rs 90 formed in June 2006. The stock faces considerable resistance in the band between Rs 220 and Rs 250. This band needs to be crossed strongly before the stock can reach Rs 304. Exit part of your holding at current levels. Hold the rest with a stop at Rs 195.

Kindly advise me on 100 shares of Rama News Print bought at Rs 53.30. Vijayaraghavan

Rama News Print (Rs 39): This stock had a dream run in September 2006 when it raced from a low of Rs 8.7 to Rs 58. There has been a gradual slide in the stock price since this peak. The Rs 38 level, where the stock price is halting currently is an important intermediate term support. If the price reverses from this level, we can expect the price to move upwards to Rs 68 and then Rs 87 over the next one year. But a slide below Rs 38 can see the price heading towards Rs 33 or Rs 28. Hold with a stop at Rs 27.

What are the prospects for J B Chemicals and Usha Martin? What are the short-term and long-term targets for these stocks? Vinod

J B Chemicals (Rs 95.8): The long-term outlook for J B Chemicals is just beginning to turn positive. Since the long-term reversal is accompanied by healthy volumes too, this is good point at which long term investors can enter this stock with a stop at Rs 86. The stock has the potential to rally to Rs 151 over the long term.

The short-term trend in this stock has turned weak over the last few sessions. The stock can slide lower to Rs 94 or Rs 87. Look for buying opportunity if the price reverses above Rs 94. Else, wait for a slide to Rs 86 before entering this stock. A rally above Rs 107 will give the stock the short-term target of Rs 119. The Rs 119 level is a strong resistance for the short term. Stop loss level for short term investors can be at Rs 93.

Usha Martin (Rs 209.4): This stock achieved the intermediate term target of Rs 207 in the pre-result excitement. The stock managed to cross above this level for the week. The long-term outlook for this stock will turn positive if the stock price sustains above Rs 207. It will then have the long- term targets of Rs 250. Investors can hold the stock with a stop at Rs 190. Dips to this level would provide an ideal point of entry. Support below Rs 190 would exist in the band between Rs 170 and Rs 175.

I am holding Mid-day Multimedia purchased at Rs 58 during July 2006. Please tell me its short term and medium term price target. N. Venkateswaran

Mid-day Multimedia (Rs 50.4): Mid-day Multimedia is in a long term down trend since September 2005. The stock was quoting 72 per cent below its all time high of Rs 118 in August 2006. The recovery in the second half of 2006 has not been convincing. Though the stock has made steady progress, it would have difficulty surpassing the Rs 65 level over the next one year. Try to exit this stock as it nears your purchase price. Till then, hold with a stop at Rs 47.

I am holding shares of Jai Corp and Varun Shipping. Kindly advise me regarding the outlook for these companies. Jitesh, Harish

Jai Corporation (Rs 2,982.1): Trading in stocks such as Jai Corporation can be an exhilarating experience as they launch in to an Indian rope trick. But the thin volumes witnessed since November 2006 make it an extremely risky bet for lay investors. Exit routes disappear when such stocks start correcting.

This stock hit a high of Rs 4,081 in November 2006 and has been reacting since then. The short- term supports for this stock exist at Rs 2,957 and then Rs 2,655. If the stock consolidates in the range between Rs 2,650 and Rs 4,000 for a while, it will mean that the scrip could launch in to yet another gravity-defying act soon. However, no fresh buys should be made if the stock falls below Rs 2,655. Those holding this stock can do so with a stop at Rs 2,650.

Varun Shipping (Rs 64.5): The stock has long-term support in the band between Rs 60 and Rs 65. The stock has made a double bottom in this band since July 2006. But the recovery has been rather lacklustre. A slide below Rs 60 can drag the stock price to Rs 50. Hold the stock with a stop at Rs 60. The stock price needs to rally above Rs 75 before fresh investments can be made in this stock.

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