I bought shares of Hindalco at Rs 163 and Sterlite Industries at Rs 171. Please give the short- to medium-term outlook for these two stocks. Can I re-enter them at current levels?
Rajesh Reddy G
Hindalco Industries (Rs 131.3): Hindalco has suffered a sharp cut since this July declining from Rs 197 to the recent low of Rs 125. The stock is in a strong medium-term downtrend since February. But this downtrend has not yet dragged the stock below its key long-term support at Rs 120.
Long-term view will turn negative only if the stock goes on to close below this level, further targets being Rs 106 and then Rs 68. Stop-loss for short- and medium-term investors can, therefore, be at Rs 115.
Investors with greater risk-taking ability can consider buying the stock in the band between Rs 120 and Rs 130 with the same stop. Bounce from here can take the stock higher to Rs 170 or Rs 204 in the days ahead. Key short-term resistance is at Rs 163.
Sterlite Industries (Rs 113.8): Sterlite Industries too has taken a knock since this August that has dragged the stock close to its critical long-term support at Rs 115. Investors can hang on to the stock as long as it trades above Rs 110.
A bounce from this zone can take the stock higher to Rs 160 or Rs 188 over the medium-term. The medium-term view will turn positive only on close above Rs 188, paving the way for rally to Rs 232 or Rs 285.
Can you please give the short- and medium-term outlook for Axis Bank?
Jaiprakash
Axis Bank (Rs 1,021.4): Last time when we had reviewed Axis Bank, it was hovering above a significant long-term support at Rs 1,200. We had then written that if the stock held above Rs 1,095, it will be positive from a long-term perspective. We had given the targets on a decline below Rs 1,100 at Rs 940 and Rs 780.
The stock breached the support level at Rs 1,095 in August, but it is attempting to rebound from Rs 1,000 which is a psychological support for the stock. Short-term investors can hold the stock with stop at Rs 980. Short-term resistances would be at Rs 1,235 and Rs 1,300.
The medium-term outlook for the stock, however, stays under a cloud. The stock could decline to Rs 940 or Rs 780 indicated above. Long-term investors need not lose heart as long as the stock trades above Rs 780. Investors can utilise such declines to buy the stock with stop at Rs 770.
I bought Jaiprakash Associates and Voltas at Rs 140. Please give technical outlook for these stocks.
G .Jayaramireddy Peddapodilla
Jaiprakash Associates (Rs 72.8): Jaiprakash Associates could not emerge from the strong bear market that pulled the stock down from Rs 340 to Rs 31 in 2008. The recovery in 2009 helped the stock retrace only half the losses and it has been trudging lower forming lower peaks and troughs since the October 2009 peak of Rs 180.
The medium-term trend decider at Rs 88 was breached in May and the stock hit the low of Rs 54 in August this year. The short- and medium-term trend in the stock continues to be down. The medium-term outlook will improve only if the stock goes on to close above Rs 102. Subsequent targets are Rs 134 and Rs 180.
If the stock fails to move beyond Rs 85, it will move lower to Rs 40 or Rs 31 over the ensuing months. Critical long-term resistance for the stock is at Rs 212, and it can be expected to move towards a new high only if this level is surpassed.
Voltas (Rs 111.4): Voltas is in an intermediate-term downtrend from the double-top formed around Rs 260 in November. This downtrend is halting at the long-term support around Rs 120. Investors can hold the stock as long as it trades above the critical support zone between Rs 100 and Rs 120.
Decline below Rs 100 will spell trouble and open the possibility of the stock declining to Rs 68 or even Rs 31. The stock will face resistance at Rs 140 and Rs 158 in the near-term. Medium-term resistances would be at Rs 168 and Rs 204. Volatility will continue in the stock as long as it trades below Rs 204.
I would like to know the technical outlook of Meghmani Organics and Astec Lifesciences. I am holding these two stocks over the last two years.
Rajesh
Meghmani Organics (Rs 8.9): This stock could regain only one-third of the losses recorded in the 2008 crash and it resumed its long-term downtrend from the October 2010 peak of Rs 22.7. Both the short- as well as the medium-term view for this stock is currently down and it appears headed towards its March 2009 low of Rs 6.
Key medium-term resistances are at Rs 14 and Rs 17. The long-term view will, however, turn positive only on a close above Rs 24.
Astec Lifesciences (Rs 35): This stock has been extremely volatile since 2010, rallying to the peak of Rs 93 to crash lower to Rs 27 by August this year. The stock is not too far above this low at present, and both the medium- as well as the short-term trends are currently down. Investors can hold the stock as long as it trades above Rs 27. It is, however, hard to judge where the decline can halt once the stock starts sliding lower.
If the current nascent uptrend sustains, the stock can rally to Rs 53 or Rs 68 in the days ahead. Investors with a short-term perspective can exit the stock on reversal from either of these levels.
I purchased Merck at Rs 700. What is the long-term prospect for this stock?
K.B.V.S. Prasad
Merck (Rs 621): Merck recorded a giddy rise in October 2010 when it rose from Rs 750 to Rs 1,000 in two weeks. But the stock has been continuously moving lower since then till it bottomed at Rs 553 in March.
A medium-term uptrend is on since then and this uptrend will be threatened only if the stock goes on to close below Rs 580. This can, therefore, serve as a stop-loss for investors with a lower investment horizon.
Long-term investors can, however, hold the stock with stop at Rs 550. The stock will continue to face a strong hurdle around Rs 730 and inability to move beyond this level will keep the stock volatile in the zone between Rs 550 and Rs 730. Once the upper boundary is surpassed, the stock can move on to Rs 780 or Rs 830.
Please advise me on Hexaware from medium-term point of view. I purchased the stock at Rs 74 and intend to hold for a time-frame of one year.
Vijaya Prabha
Hexaware Technologies (Rs 83.2): Hexaware Technologies has short-term support at Rs 62, and investors with short- to medium term perspective can hold the stock as long as it trades above this level. If the stock manages to hold above, it can consolidate in the range between Rs 62 and Rs 94 for a few months before breaking higher to Rs 100.
However, decline below this support will pull the stock to Rs 52 or even Rs 42 over the upcoming months.
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