The Hindu Business Line : Query Corner

Nagarjuna Fertilisers (Rs 20.7): Nagarjuna Fertilisers is currently reversing from the upper boundary of its long-term trend channel. Though, the stock had a strong run in April 2007, we would advocate caution at these levels. The long-term outlook for this stock will turn upward, only on a firm close above Rs 22. The stock has not surpassed this resistance in the last nine years!

Do not buy at current levels. The best place to buy the stock would be in the band between Rs 12 and Rs 13.5. We expect the stock to stay in the band between Rs 12 and Rs 20 over the next one year.

What are the prospects of Asian Electronics bought at Rs 465 and Venus Remedies purchased at Rs 400 for the next 12-18 months? Vinod

Asian Electronics (Rs 565): This stock is inching close to the all-time high that it made in January 2007. The unbroken sequence of higher peaks and troughs points towards a strong long-term up trend in the stock. The stock has the potential to move higher to Rs 641 over the next 18 months. Long-term investors can hold the stock with a stop at Rs 378. Since the long-term trend line is positioned at Rs 380, the structural bull phase in this stock will not be threatened unless there is a close below this mark.

Venus Remedies (Rs 454.5): Venus Remedies has not looked back since the low of Rs 178 made in June 2006. The movement of the stock since this low indicates strong buying interest. The stock can consolidate in the band between Rs 375 and Rs 500 for a few more months before it breaks out upwards to Rs 582 and then to Rs 710. Hold with a stop at Rs 370.

A move below Rs 370 can drag the stock lower to Rs 346 and then to Rs 307. The positive long-term outlook will change only if the stock price falls below Rs 300.

I have bought Aventis Pharma at Rs 1,356 and Taj GVK Hotels at Rs 182. Please let me know the technical forecast for these scrips. Ganesh

Aventis Pharma (Rs 1,275.3): The stock is in the third leg of the downward move that began in May 2006. Though Aventis has moved below the long-term trend line, it is trying to stabilise around the long-term support at Rs 1,200. Move below this level will take the stock lower to Rs 970.

The medium and intermediate term trends continue to be down in this stock. The stock would need to close above Rs 1,450 before the medium term outlook turns positive. Investors contemplating fresh buys should do so only on a close above Rs 1,430. Short-term investors can book some profit in the band between Rs 1,400 and Rs 1,450. A close beyond Rs 1,430 can take the stock to Rs 1,650 and then Rs 1,760.

Taj GVK Hotels (Rs 172.7): Taj GVK Hotels is trying to consolidate in a narrow band between Rs 160 and Rs 200 since March 2007. This movement does not instil confidence regarding the medium-term prospects of the stock. Though the July 2006 low of Rs 150 is still holding, the stock is positioned below its long-term trend line. If the stock moves below Rs 150 it can fall to a low of Rs 135. Long-term investors can watch out for buying opportunity around this point.

The stock will face strong hurdle in the zone between Rs 200 and Rs 210 in the immediate term. This level needs to be surpassed before the near term outlook turns rosy. Some of the holding can be liquidated if the stock reverses from this short-term resistance band.

Can you please give me the outlook for Bharati Shipyard and GMR Infrastructure? I bought Bharati Shipyard at Rs 359 and GMR Infrastructures at Rs 199.50. Vivek

Bharti Shipyard (Rs 415.6): Bharti Shipyard made a significant low in July 2006. The stock has been making a gradual progress upwards since this low. Investors need to hold the share with a stop at Rs 310. As long as the stock price sustains above this mark, it can move higher towards Rs 450.

Strong resistance is present around Rs 450 in this stock and an intermediate term reversal is possible from this zone. Partial profits ought to booked if the stock reverses from this level. However, a firm close beyond Rs 450 can take the stock to Rs 502.

GMR Infrastructure (Rs 430.8): The downward move from the February high of Rs 437 in GMR Infrastructure retraced 50 per cent of the gains made since listing. It is highly probable that a crucial low has been formed at Rs 327 in April. Investors can hold the stock till the stock trades above this level.

Medium-term resistance would be encountered in the zone between Rs 430 and Rs 450. A reversal from these levels will make the stock move in a wide band between Rs 350 and Rs 450 over the next six months. A move beyond Rs 450 will give the stock the target of Rs 554.

Kindly let me know the short-term and long-term outlook of Indiabulls Real Estate purchased at Rs 300. G. K. Jain

Indiabulls Real Estate (Rs 364.7): In last week's column, we had carried the outlook for Indiabulls Financials instead of Indiabulls Real Estate. The error is regretted. The technical analysis of Indiabulls Real Estate follows:

There is insufficient data to provide a long-term outlook for this stock. The trend channel that encloses the stock's movement since April 2007 gives the immediate target of Rs 405 for this stock. Short-term investors can hold the stock with a stop at Rs 332.

I have purchased Geometric Software at Rs 120 and 3i Infotech at Rs 251. I would like to hold these stocks for 3 to 5 years. What is the target price for them? Should I hold these stocks? Kindly advise. Brij Mohan Ohir

Geometric Software (Rs 120.5): It is advisable to hold on to Geometric Software if you are a patient investor ready to hold the stock for the next 5 years. The stock is moving in an upward moving trend channel that gives the target of Rs 155 over the next one year. The down side risk is limited to Rs 85. The stock could vacillate between Rs 80 and Rs 150 for a year or so before it breaks-out to un-chartered area. Hold the stock with a stop at Rs 75.

3i Infotech (Rs 316.1): 3i Infotech is nudging its all-time high again after gaining more than 40 per cent in the last five weeks. Caution is advised at this juncture as the stock is nearing the February peak of Rs 322.

Investors with a short-term perspective can book partial profits around this level. Long-term investors can hold the stock till it sustains above Rs 320.

The long-term target for this stock is Rs 445.

We have holdings in Geojit Financial Services. Kindly enlighten us regarding the prospect of this stock. P. Sravya

Geojit Financial Services (Rs 35.3): This stock is currently reacting downwards after a strong run that took it from the July 2006 low of Rs 16 to Rs 42 in February 2007. The near-term support for the stock exists at Rs 32. Short-term investors should exit the stock if it moves below this support. Such a move will take the stock to Rs 29 and then Rs 26. A consolidation above Rs 32 will take the stock beyond Rs 42 again.

I bought Gateway Distriparks at Rs 170. What is the medium-term and long-term target for this stock? Gajuddin Ahamed and Rahul

Gateway Distriparks (Rs 186.3) Gateway Distriparks is moving sideways between Rs 145 and Rs 210 since July 2006. Since the stock has long-term support at Rs 140, this sideways movement can be considered a base building exercise before the stock resumes it upward move.

Investors who are prepared to hold the stock for more than two years can do so with a stop at Rs 130.

The stock will continue to face resistance in the zone between Rs 215 and Rs 220.

This zone can thwart short-term rallies. A strong close beyond Rs 220 will take the stock to the next resistance zone at Rs 242.

Lokeshwarri S. K.

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