QUERY CORNER - Business Line

December 3, 2011:  

Please discuss the medium- and long-term outlooks of Balrampur Chini Mills and Dwarikesh Sugar Industries.

Anil

Balrampur Chini Mills (Rs 44.9): Balrampur Chini is currently in a very severe downtrend.

It breached its long-term support at Rs 76 in May and is currently nearing the long-term base at Rs 30.

This is the trough formed in December 2008. This is the level that investors can look to for both medium- as well as long-term support.

It is not advisable to hold the stock once this level is breached since the next halt can be way below, around Rs 10. Key resistances for the months ahead would be at Rs 67, Rs 96 and Rs 110. I nvestors with shorter investment horizon can divest their holdings at either of these levels.

The long-term view will, however, turn positive only if the stock moves above Rs 150.

A range-bound move between Rs 50 and Rs 150 seems quite likely in the next couple of years.

Dwarikesh Sugar Industries (Rs 36): Dwarikesh Sugar is also in doldrums but the stock is in the bear's grip since May 2006.

The stock is nearing the long-term trough at Rs 27 recorded in December 2008.

Investors who continue to hang on to this stock can do so only as long as it trades above this level.

Medium-term resistances for the stock would be at Rs 73 and then Rs 97.

Investors with a medium-term perspective can sell the stock at either of these levels.

The long-term outlook on the stock will turn positive only if it goes on to record a weekly close above Rs 135.

Please let me know the prospects of Sintex Industries and Tecpro Systems from a technical perspective.

Tomy Joseph

Sintex Industries (Rs 93.9): Sintex Industries faces a long-term hurdle at Rs 205.

Though the stock moved above this level in November 2010, it could not make too great a progress and reversed lower from the peak of Rs 237.

The subsequent decline has pulled the stock below its medium-term support at Rs 113.

Investors can hold the stock with a stop a little below, at Rs 80.

However, if this level is breached, the next halt will be at March 2009 trough at Rs 35.

The zone between Rs 205 and Rs 240 will be the key long-term resistance for the stock.

This zone needs to be breached before the stock can head towards its long-term peak at Rs 307.

Medium-term resistances for the stock will be at Rs 143 and Rs 180.

Tecpro Systems (Rs 179.5): Tecpro Systems has been heading lower ever since its listing in October last year.

It attempted to halt around Rs 225 between March and July, but this level was also breached strongly in November and the stock is currently near a new life-time low. Since the stock has limited history, it is hard to forecast where the slide can halt.

Investors with a low penchant for risk can exit the stock at this juncture and consider reinvestment on a rally above Rs 230.

Subsequent resistances will be at Rs 280, Rs 328 and Rs 348.

Please give your views on the technical prospects of Jindal Saw and Jindal Poly Films.

M.M. Faquih

Jindal Saw (Rs 128): This stock peaked at Rs 245 in January 2008 before crashing to the 2009 low of Rs 29.

The recovery from this low could not get past the resistance zone between Rs 230 and Rs 250 and the stock is again in a medium-term downtrend.

This down-move is, however, halting at the key medium-term support at Rs 105. Investors can continue to hold the stock as long as it trades above this level.

Rebound from here can take Jindal Saw higher to Rs 157 or Rs 187 in the medium-term. Move above Rs 187 will imply that the stock can move towards its previous life-time high of Rs 235.

Supports for the stock below Rs 105 are at Rs 64, Rs 41 and finally the March 2009 trough of Rs 29.

Jindal Poly Films (Rs 173.7): This stock has taken a deep cut since this April, declining from Rs 450 to Rs 165.

Jindal Poly Films has breached its key medium-term support at Rs 300 and it needs to record a weekly close above this level in order to salvage the medium-term outlook.

Next support for the stock is at Rs 150 and Rs 120. Investors can now hold the stock as long as it trades above Rs 120.

Breach of this level will mean that it is heading towards the November 2008 trough at Rs 56.

Key resistances for the month ahead would be at Rs 300, Rs 373 and Rs 500.

Please give your outlook for Divi's Laboratories.

Altaf Hussain

Divi's Laboratories (Rs 763): The structural trend in Divi's Laboratories continues to be up. The correction in 2008 dragged the stock to its long-term support area around Rs 420. The rally that began from this low continues to be in force. The stock was hardly dented in the ongoing correction.

It has immediate resistance in the zone between Rs 750 and Rs 850. Once this zone is breached, the stock can move towards its life-time high of Rs 965.

Investors with short to medium-term perspective can hold the stock with stop at Rs 550.

The stock can also be accumulated in declines with the same stop. Breach of this level will, however, mean that the stock is heading towards the long-term supports at Rs 523 and Rs 423. Stop-loss for long-term investors can be at Rs 390.

Please advise on the short- and medium- term targets of Anant Raj Industries.

T.S. Sundaram.

Anant Raj Industries (Rs 46.3): The secular trend in Anant Raj Industries is down. The stock could not even retrace 38.2 per cent of the decline in 2008.

The short- as well as the medium-term view for the stock is also currently down. Immediate support that investors can watch out for is the April 2009 trough at Rs 35. Investors can hold the stock with stop at Rs 33.

It would be best to divest the holdings on a decline below this level since it is hard to forecast where it can halt then. Resistances for the month ahead would be at Rs 88, Rs 103 and Rs 118.