The Hindu Business Line : Query Corner — Wipro edging near its previous high

Sonata Software (Rs 38.2): The correction in June and July in Sonanta Software halted at Rs 24 after retracing half the gains recorded since March. The intermediate-term up-trend appears to have resumed with renewed vigour. The stock has moved beyond the key medium-term resistance band between Rs 35 and Rs 37 and is now poised to move higher to Rs 44 and Rs 52 over the medium-term. Investors with a short-term perspective can buy in declines with a stop at Rs 35.2. Medium-term investors can buy with a deeper stop at Rs 31. Strong close above Rs 52 will pave the way for a rally to Rs 75.

Please give the technical outlook for Wipro purchased at Rs 514 and Ranbaxy bought at Rs 262. P Narayana

Wipro (Rs 564.1): In our review of Wipro in February this year, we had advised investors to hold the stock with a stop at Rs 200. We had also indicated that the long-term outlook would turn positive on a close above Rs 350.

The stock reversed from the low of Rs 196 in March and has been going from strength to strength since then. The resistance at Rs 350 was shattered in July and the stock has also managed to close beyond the key intermediate-term resistance at Rs 500 last week. We need to set a filter of one more week to see if the stock holds above this critical level.

If it manages to do so, next medium-term target for the stock is its previous peak at Rs 690. Short-term investors can therefore hold the stock with a stop at Rs 500 while medium-term investors can buy in declines as long as it holds above Rs 425. Subsequent medium-term supports are Rs 380 and Rs 340.

Ranbaxy Laboratories (Rs 335.1): We had indicated in May that the stock will face strong resistance in the zone between Rs 250 and Rs 270 where the 200-day moving average was positioned. Ranbaxy oscillated in this range upto mid-August before surging higher. Although the short-term trend is up, the stock is pausing at key medium-term resistance of Rs 355. A reversal from here can cause a decline to Rs 260 or Rs 214 again.

Investors should therefore be wary until the stock records an emphatic close above Rs 350. Subsequent medium-term targets would be Rs 400 and Rs 460.

Medium-term investors should hold the stock with a stop at Rs 250 while short-term investors can hold with a higher stop at Rs 310.

Please let me know the medium and long-term prospects of Aptech and Kesoram Industries. Siva Balajee

Aptech (Rs 247.5): Aptech has moved above the key medium-term resistance around Rs 200 and the medium-term view will now stay positive as long as the stock holds above this level.

Next medium-term target for the stock is Rs 297 and investors with a short to medium-term perspective can book some profits on a reversal from this zone.The long-term trend in the stock appears to have turned upward from the October low of Rs 51. But a strong close above Rs 300 is required to signal an impending rally towards the previous peak at Rs 450.

Kesoram Industries (Rs 341.5): This stock retraced half the losses made in the crash of 2008 when it peaked at Rs 385 towards the end of July.

The correction witnessed since this peak can extend over the medium-term and cause a decline to Rs 280 or Rs 214. If the peak of Rs 385 is surpassed, next medium-term target is Rs 460.

Long-term investors can hold the stock with a stop at Rs 200 and medium-term investors can hold as long as the stock trades above Rs 280. The long-term view will turn overtly positive only on a weekly close above Rs 460.

Kindly advise me on the technical outlook for Aban Offshore for short, medium and long-term. Bhaskar Parab

Aban Offshore (Rs 1,571.3): Although Aban Offshore is still 71 per cent below its January 2008 peak, the stock has enthralled investors with the spell-binding rally from the March depth of Rs 224. The correction in June and July halted after retracing exactly 61.8 per cent of the prior up-trend and the third leg of the rally from March lows appears to have taken off since then.

Simple extrapolation gives us the medium-term targets of Rs 1,720 and Rs 2,388.

The stock is near key medium-term resistance at Rs 1,640 and once this level is crossed, it can head towards the September 2008 peak of Rs 2,500.

The zone between Rs 2,300 and Rs 2,500 will be the long-term trend decider and a decline from here can make the stock vacillate in the zone between Rs 1,000 and Rs 2,500 for a few more months.

Please outline the short-term outlook of MIC Electronics. I have purchased the shares at Rs 45. Darshana

MIC Electronics (Rs 52.8): MIC Electronics continues to be in the medium-term up-trend that began from its March lows. That the stock has managed a close above its 200-day moving average is also a positive from a short-term perspective.

The stock could move higher to Rs 65 in the short-term. If this level is surpassed, subsequent targets are Rs 81 and Rs 96. Short-term investors can therefore hold the stock with a stop at Rs 45.

Key medium-term resistance is in the zone between Rs 85 and Rs 95 and the stock needs to record a strong close above this zone to signal that it is out of the woods.

Please advise me about medium and long-term prospects of Jindal Steel and Power. Jacob

Jindal Steel and Power (Rs 3,211.6): In our review of this stock in March this year, we had indicated that key resistance for the year ahead would be at Rs 1,620.

This level was shattered in May and the stock is currently testing its previous all-time high peak of Rs 3,357. Long-term target on a weekly close above Rs 3,357 is Rs 3,865.

However, it is quite common for stocks to pause near their former peaks and even give up some gains.

Medium-term correction can drag the stock down to Rs 2,240 and it can spend a few months moving between Rs 2,240 and Rs 3,350 before breaking in to unchartered territory.

Medium-term investors can hold with a stop at Rs 2,200 while long-term investors can accumulate in declines with a stop at Rs 1,580.

I have bought Wire and Wireless at Rs 19. What is your outlook on this stock? Rama Krishna Garimella

Wire and Wireless India (Rs 20.4): WWIL faces resistance at Rs 22.7 in the near-term. Failure to cross this level will result in a decline to Rs 15 again. Investors can hold the stock as long the stock trades above Rs 15.

But the resistance at Rs 27 could be hard to overcome just yet and short-term investors can book some profit around this level. Subsequent target is at Rs 45.

— Lokeshwarri S.K.

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