The Hindu Business Line : Query Corner

Karur Vysya Bank (Rs 259): This stock is in a strong long-term up trend. The move since August 2004 can be enclosed in an upward moving trend channel.

The lower boundary of the trend channel that exists at Rs 221 is expected to support the stock, should there be a steep fall. Long-term investors can hold the stock with a stop at Rs 215. The target over the next 12 months would be Rs 312.

UTI Bank (Rs 465): UTI Bank could have made a significant intermediate term peak at Rs 615 in February 2007. It implies that the stock could struggle to overcome this peak over the next three months.

The immediate resistance for the stock is at Rs 542. If the stock is unable to overcome this resistance, it can head lower to Rs 409 and then to Rs 384 again.

A fall below Rs 384 will take the stock towards the next lower target at Rs 327. Exit the stock if it struggles to rally above Rs 542 in the short term. Stops for long-term investors ought to be at Rs 395.

Kindly share your view on Paramount Communications. Sudha Anand, S. Bhanu

Paramount Communications (Rs 30.5): This stock has made a classic double top at Rs 60 and is down more than 50 per cent from this peak. Since the stock displayed greater momentum on the way down, taking half the time to cover the distance that was spanned in the six months since July 2006, investors need to stay wary of this stock.

The stock might struggle to rally above Rs 40 in the short term. A close beyond Rs 40 is required to make the short-term outlook positive. Hold with a stop at Rs 22. Fall below Rs 22 can drag the stock lower to Rs 17.

I have purchased shares of Gujarat NRE Coke at Rs 48. Please let me know the technical outlook for this stock. Sai Gautham, S. Bhanu

Gujarat NRE Coke (Rs 49.5): This stock has recorded a strong breakout in March and April that made it climb vertically from Rs 32 to Rs 50 in just 10 sessions. The narrow move between Rs 49 and Rs 52 since then seems like a precursor to another sharp surge to Rs 62.

The bullish outlook will be negated only if the stock price falls below Rs 44. Short-term investors can utilise dips to buy the stock with a stop at Rs 43.

I hold shares of Morepen Labs bought at Rs 24.50 for the last three years and shares of Mangalam Timbers purchased at the rate of Rs 53, for over a year. Please tell me whether I should hold these shares or exit them. Khayumuddin

Morepen Labs (Rs 16.1): This stock is in a severe long term down trend. The rally that took the stock from a low of Rs 6 to Rs 26 in the last one year does not seem sustainable. The immediate support for the stock exists at Rs 15.

A slip below this level can take the stock to Rs 12.5. Hold the stock with a stop at Rs 12. There can be short-term rallies to Rs 19 or Rs 22, which can be used to pare your holdings.

Mangalam Timbers (Rs 16.6): It is unfortunate that you have bought Mangalam Timbers close to its long-term peak. It would interest you to know that the stock made a high around Rs 50 in 1994 too before plunging all the way to Rs 2.

The long-term outlook for this stock stays weak. There can be brief rallies to Rs 22 or Rs 27. But inability to get past Rs 22 would mean that the outlook will deteriorate further. We recommend exiting this stock at this juncture.

I have shares of Excel Cropcare bought at Rs 258. Should I average it now or exit? Kamal Krishna Mukherjee

Excel Cropcare (Rs 92.9): Excel Cropcare is nearing the low of Rs 76 that it made in 2004. You can hold the stock with a stop below this level, at Rs 70.

It is likely to struggle to rally above Rs 150 over the next six months. A rally past this level is required to take the stock to Rs 175 or Rs 195. Reduce your holding as the stock rallies to these levels.

Please let me know your views on Shriram Transport Finance with a long-term perspective. Sanjay Jain

Shriram Transport Finance (Rs 122.6): This stock is in a long-term range between Rs 85 and Rs 145. Since this sideways consolidation comes after a strong up-move from the 2004 low of Rs 20, we can expect the stock to break-out of this long-term consolidation and move up further to Rs 205 over the next two years. But strong resistance will continue to exist around Rs 145.

Medium term investors can hold with a stop at Rs 105. A move below this level will drag the stock lower to Rs 85 again. Long-term investors can accumulate the stock in the band between Rs 85 and Rs 100.

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