The Hindu Business Line : Query Corner

I have bought Vardhaman Textiles at an average rate of Rs 283 and Finolex Cables at an average rate of Rs 98. Please give me the long-term and short-term prospects for these stocks. Dr M. Ratnakar Shet

Vardhman Textiles (Rs 189): Vardhaman Textiles is currently in the third leg of the long-term bear market that began from May 2006. This down-move can halt around Rs 180. But a fall below this support will dent the long-term picture considerably.

An exit is recommended if the stock moves below this support. The upper target for the next one-year is Rs 275.

Near-term resistance for the stock would be at Rs 233 and then Rs 256. Short-term support too is present at Rs 180.

Finolex Cables (Rs 83.9): This stock is reacting from the high of Rs 108 made in January 2007. The band between Rs 80 and Rs 84 should cushion the fall in the short term. A reversal from this band will make the stock move to Rs 92 and then Rs 99 immediately.

A significant long-term trough was made at Rs 44 in June 2006 from where the stock has reversed strongly to gain 147 per cent in less than a year.

If the stock sustains above Rs 80, it can move higher to Rs 124 and then Rs 149 over the long-term. Move below Rs 80 can drag the stock lower to Rs 69. Long-term investors can hold the stock with a stop at Rs 68.

I have Glenmark Pharma purchased at Rs 360. Should I hold or book profit? Raju. T

Glenmark Pharma (Rs 668.4): Glenmark Pharma made a long-term reversal in June 2006. It has garnered more than 200 per cent since then. This long-term up-trend continues to be in force. The move since January 2007 seems like a consolidation before the stock begins the next leg of its upward move.

Though the long-term outlook is bright, the stock is expected to oscillate in the band between Rs 500 and Rs 700 for a few months before a breakout occurs.

You can book profit on part of your holdings at these levels and hold on to the rest with a stop at Rs 490. Add to your holdings if the stock dips to Rs 500 again.

Please let me know the short-term and long-term prospects of Provogue India bought at Rs 486. The daily traded volumes have become thin in this stock. Is it a cause for concern? Madavan Viswanathan

Provogue India (Rs 463.3): This stock is moving sideways after the sharp upward move recorded after July 2006.

The low volumes accompanying this sideways move is not a cause for concern as it shows that there is low trading interest in this stock and most of the shareholders are invested with a long-term perspective.

Such stocks can be used as a hedge in a falling market due to their low beta.

The stock has support at Rs 380 and then at Rs 300. It would not be possible to project the upward targets due to insufficient history.

Hold the stock with a stop at Rs 375.

Please tell me the future of Sterling Tools and Savita Chemicals on the chart for the medium term. A. K. Parikh

Sterling Tools (Rs 84.2): This stock is trying to steady itself around the support at Rs 78. A fall below this level will make the long-term outlook negative and it will pave the way for a fall to Rs 66.

Hold the stock with a stop at Rs 75. The stock can attempt to rally to Rs 110 or Rs 125, but we do not envisage a rally past Rs 125 in the medium term.

Partial profits can be booked around this level.

Savita Chemicals (Rs 262.5): This stock is moving in a broad range between Rs 200 and Rs 320 since April 2006. The medium-term outlook for the stock will remain positive until it sustains above Rs 200.

Hold with a stop at Rs 190. Savita Chemicals has the potential to move higher to Rs 282 and then to Rs 327 over the next three months.

I have purchased Granules India at Rs 133. Please give me your outlook for this stock with a three-to-six months perspective. Munish Batheja

Granules India (Rs 126.6): Granules India has made three unsuccessful attempts to rally past Rs 128 since March 2005. The stock is currently making another attempt to rally past this resistance.

A firm close above Rs 130 can begin the next leg of the upward move that can take the stock price to Rs 158 and then Rs 211.

Hold the stock with a stop at Rs 115. If the stock falls below Rs 115, it can fall to the lower end of the current trading range at Rs 100.

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Lokeshwarri S. K.

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