The Hindu Business Line : Query corner

I have bought Valecha Engineering at Rs 210 and Lloyd electric at Rs 173. I would like to know the short- and long-term targets for the same. Vinod, Mathew

Valecha Engineering (Rs 215.1): Valecha Engineering has made a long term low in July 2006 at the price of Rs 125. The long-term resistance for this stock exists at Rs 300.

The stock has reversed after making a high of Rs 289 in February 2007. A broad-based consolidation between Rs 200 and Rs 300 is possible over the next six months. A break-out beyond Rs 300 is required to spur the stock back to its all-time high at Rs 410.

Short-term support for this stock exists at Rs 188. Short-term investors can hold this stock with a stop at Rs 180.

A reversal above Rs 180 can see the stock price rising towards Rs 298 in the medium term.

Lloyds Electric (Rs 136): The long-term outlook for this stock is positive. The stock price is moving in a broad band between Rs 120 and Rs 240 since October 2005.

Long-term support for the stock exists at Rs 120 and below that at Rs 95. Long-term investors need not be perturbed unless the support at Rs 95 is breached.

The short-term resistances for the stock price are at Rs 170 and then at Rs 185. A weekly close above Rs 185 is required to signal that the long term up trend has resumed in this stock.

I have bought Crompton Greaves at Rs 213. I am a short-term investor. Should I hold this stock or exit? A. Vijayakumar

Crompton Greaves (Rs 176.7): This stock has slipped after making a high at Rs 234 in January 2007. The immediate support for this stock exists at Rs 170. Since the long-term 200-day moving average is positioned at Rs 170, the stock is not expected to slip below this support. So, hold on to your position with a stop at Rs 165.

The intermediate term outlook continues to be good for this stock. If the stock price manages to sustain above Rs 170, we can see the stock rallying to Rs 252 over the next one year.

I have bought Paradyne Infotech at Rs 106 a month ago. But now the rate is Rs 73.95. Please advise whether I should hold the shares for few more months or sell it. Maheswari Ramesh

Paradyne Infotech (Rs 85.4): This stock had a three-fold increase from the low of Rs 42 made in June 2006. The correction from the February 2007 peak has been equally sharp and the stock is currently halting at important intermediate term support at Rs 75.

A sharp fall below Rs 75 is required to drag the stock price further down to the support that exists at Rs 65. Hold the stock with a stop at Rs 68. There can be short-term rallies that take the stock price higher to Rs 90 or Rs 102. The stock might have difficulty rallying above Rs 102 in the short term. Exit here, if you are a short-term investor.

I hold Agro Dutch Industries and Sakthi Sugars. Kindly let me know the future prospects of these shares. K. Hari Hara Puthiran

Agro Dutch Industries (Rs 25.8): The long-term bear market that began in the year 2000 continues in this stock. The pullback from April 2003 could retrace only half of the fall witnessed from the 2000 peak.

Long-term support for the stock exists at Rs 20. Fall below this support can wreak havoc with the stock price. Hold with a stop at Rs 19.

Short-term rallies will face resistance at Rs 36 and beyond that at Rs 40. The stock would face difficulty in overcoming the resistance that exists at Rs 40 over the next one year. A breakout beyond Rs 40 is required to propel the stock to Rs 55. It would be advisable to exit the stock in rallies.

Sakthi Sugars (Rs 62.9): All sugar stocks are hurtling in to a bottomless pit and Sakthi Sugars is no different. There were two major long-term supports, one at Rs 110 and the other at Rs 80.

The stock price is below both these levels. The next halt for the stock price could be at Rs 50. A slide below Rs 50 can take the stock price to Rs 30.

This stock will struggle to rally above Rs 120 in the next one year. Exit at current levels and switch to some other sector.

I have purchased Bombay Dyeing at Rs 601. Should I hold, if so up to what level? Sribanta Tripathy

Bombay Dyeing (Rs 530.9): The immediate support for Bombay Dyeing exists at Rs 400. The long-term trend line in this stock is positioned here. The June 2006 low was also made around this support. Long-term investors can hold on to the stock as long as this support holds.

A short term low has been formed at Rs 433 on March 8. This short-term up-trend can take the stock price to 655 or Rs 682. You can book profit and exit at either of these levels if you are a short-term investor. A rally above Rs 680 would indicate that the stock has the potential to run-up to Rs 820.

I bought Tech Mahindra at Rs 1,930. Already this stock has come down a lot.

Shall I book loss or wait for some more time? I am a medium term investor. Dr T. Srinivasa Rao, Namrata Bhatia

Tech Mahindra (Rs 1,434.8): This stock has retraced 50 per cent of the gains that it had recorded since its listing. The immediate support for this stock exists at Rs 1,300.

A fall below this level can take the stock to the next support that exists at Rs 1,122. Since you are a medium term investor, hold the stock with a stop at Rs 1,090.

A reversal above this support can see the stock price rallying to Rs 2,100 again over the next six months.

I hold Aurobindo Pharma bought at Rs 705 and Havell's India purchased at Rs 450. What is the one-year outlook for both of these stocks? Manoj Kaushal

Aurobindo Pharma (Rs 596.4): The stock is in a long-term consolidation phase that is making the stock price move in a band between Rs 500 and Rs 750 since May 2006.

The level to watch out for over the short-tem is Rs 583. A fall below this level will take the stock price to Rs 500. Since you are a long-term investor, stay invested as long as the stock price sustains above Rs 500.

The long-term outlook is strong in this stock.

Havell's India (Rs 444.8): The near term outlook for Havell's India is positive. The stock has immediate support at the price of Rs 390. If the stock moves sideways in the band between Rs 400 and Rs 550 for a one to three months, we can see an upward breakout that takes the stock to Rs 621 over the next one year. Hold with a stop at Rs 390.

I hold Andhra Cements at Rs 40. Please tell me about the future of this stock? Kishore Manchala

Andhra Cement (Rs 21.1): The scrip has been in a long-term bear market since September 2005. The stock price is currently nearing the June 2006 low of Rs 19.

Fall below this level will make the outlook negative for this stock. The stock price has just moved below the long-term trend line that is positioned at Rs 26.

We need to see a weekly close above Rs 26 before some stability can be expected. Hold with a stop at Rs 18. Short-term attempts at rallying will face resistance in the zone between Rs 33 and Rs 35.

I am holding Petronet LNG purchased at the level of Rs 50.

Should I hold this stock or exit at current levels? Anuj Jain

Petronet LNG (Rs 42.8): The near term outlook for Petronet LNG is weak. But the stock can stabilise above Rs 35 and then resume its long term up move. Hold the stock till it sustains above Rs 35.

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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