Please discuss the medium- and long-term outlook of ACC and Ambuja Cements.
Anil
ACC (Rs 1223.4): This stock has built on the base around Rs 400 to move strongly higher. It is one of the stocks that has bucked the correction in broader market this calendar to gain over 10 per cent. ACC has strong long-term resistance around Rs 1,000. After fluctuating for a protracted period around this level, it appears to have broken higher this week.
Immediate target is the previous all-time high at Rs 1,315.
The stock could take a breather once it reaches this level and spend some time consolidating in the band between Rs 1,000 and Rs 1,350.
Target on a break above Rs 1,350 is Rs 1,800.
Investors can hold the stock as long as it trades above Rs 900. Subsequent supports are at Rs 800 and Rs 700. Investors with longer investment horizon can buy in declines as long as the stock holds above Rs 700.
Ambuja Cements (Rs 161): In our review of Ambuja Cements in July 2010, we had written that the stock could break higher to Rs 150 or Rs 160 after consolidating for few months in the range between Rs 92 and Rs 125.
The stock followed our script to move to the peak of Rs 166 by last November. But it has been unable to make any headway beyond that zone. The stock has formed a triple mountain formation in the weekly candlestick chart.
But the ongoing sideways movement in the broad range between Rs 115 and Rs 165 is positive from a long-term perspective.
Investors can hold the stock as long as it trades above Rs 110. Declines to this level will also provide the opportunity for long-term investors to buy the stocks.
The ceiling around Rs 160 will continue to thwart the stock in its attempts to move higher. Once it breaks higher, the long-term target is Rs 187 and then Rs 232. Long-term supports below Rs 110 are at Rs 102 and then Rs 88.
Please let me know the prospects of Genus Power purchased at Rs 22.
K. Srinivasan
Genus Power Infrastructures (Rs 13.9): Genus Power recorded the peak of Rs 105 in the last phase of the previous bull market, in January 2008. The stock then went on to slide below Rs 10 in the correction that followed.
The recovery in 2009 has been disappointing and has not helped the stock retrace even one-third of the losses suffered in 2008.
It needs to climb above Rs 44 to make the long-term outlook positive.
The medium-term trend is down since the peak of Rs 28.4 recorded in November 2010. But the stock is hanging on to the key medium-term support at Rs 15.
Investors can hold the stock with stop at Rs 12.5. Decline below this level will pave the way for a slide all the way down to the March 2009 low at Rs 7. Medium-term resistances will be at Rs 22 and Rs 29.
I am holding SKS Micro Finance purchased at Rs 550 and HCL Infosys bought at Rs 85. What is short- and long-term technical view for these stocks?
Nagabhushanam
SKS Microfinance (Rs 209): SKS Microfinance does not have sufficient history to enable us to give guidance on the long-term technicals.
The stock has been sliding lower incessantly since the high of Rs 1,490 recorded in September 2010.
The sequence of lower troughs formed since this peak indicates that the secular trend in this stock is down. Attempting to buy the stock near its bottom will be akin to catching a falling knife.
The stock is currently trying to hold above the support at Rs 200. Investors can hold the stock as long as it trades above Rs 190.
It is hard to judge where the next halt will be once it declines below Rs 190. The more risk-averse investors can switch out of the stock at this juncture.
HCL Infosystems (Rs 62.7): In our review of HCL Infosystems in August last year, we had written that fresh purchases should be avoided on a close below Rs 100 since that would imply an impending decline to Rs 66.
The stock made an emphatic move below Rs 100 in July and is currently hovering around the long-term support at Rs 64. Investors can hold the stock with stop at Rs 60. If the stock bounces above this level, it can move higher to Rs 109 or Rs 140 over the medium-term.
Long-term resistances for the stock are at Rs 180 and Rs 210.
I purchased Unitech at its 52-week high of Rs 99. Please let me know whether I can average at current levels and wait for long-term.
Dr M. Sockalingam
Unitech (Rs 28.8): Unitech has long-term support betweenin Rs 20 and Rs 25. The stock reversed from this zone repeatedly between November 2008 and March 2009. This base is once again supporting the stock since this August.
Investors can hold the stock with stop at Rs 20. Those with a greater penchant for risk can buy the stock at current levels with stop at Rs 19.
The stock will, however, face strong resistance at Rs 61 and then at Rs 84 in the months ahead. Investors with lower investment horizon can divest their holding at either of these levels. Long-term view will, however, turn positive only on move above Rs 118.
Is it advisable to buy Zylog Systems at current levels?
Rohit
Zylog Systems (Rs 451.9): Zylog Systems has been showing strength since the beginning of this year, moving in a narrow band between Rs 370 and Rs 450.
The stock is just beginning to break higher from this trading range. Immediate targets for this stock are at Rs 487 and then at Rs 614.
The stock could pause at its former high of Rs 614 again and give up some gains. Target on a break above Rs 615 is Rs 830. Key supports for the days ahead would be at Rs 370, Rs 340 and then Rs 270.
Can I buy Dewan Housing Finance at current levels with one-year time horizon?
Pradeep
Dewan Housing Finance Corporation (Rs 214.4): Dewan Housing Finance recently formed the trough at Rs 190 after retracing half the gains made since 2009.
The rally from this level has, however, not progressed far enough to imply that the stock is out of the woods. Investors can, however, accumulate the stock in declines with stop at Rs 155. Close below Rs 160 is required to make the long-term view negative in this stock.
Medium-term resistances for the stock are at Rs 250 and Rs 290. Long-term target is at Rs 347
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