Query Corner: MOIL marching lower

Please explain the short- and medium-term trend of United Spirits and SB & T International.

Thariath Kurian

United Spirits (Rs 530.7): United Spirits moved close to the long-term trough at Rs 425 formed in January 2009 and the stock continues to hover above this level. This level can act as a stop-loss for both short- as well as medium-term investors. If this level is breached, the supports at Rs 362 and then Rs 288 will come into play.

Short-term targets for the stock are Rs 750 and Rs 925. The zone between Rs 900 and Rs 950 is also a key medium-term resistance. Inability to move above this zone will mean that the stock will vacillate between Rs 500 and Rs 950 over the upcoming months.

Medium-term view will turn positive only on a strong close above Rs 950. Subsequent targets for the stock are Rs 1,068 and Rs 1,215.

SB & T International (Rs 9): This stock is sliding incessantly since the peak at Rs 133 recorded in April 2005. The stock reached its nadir in the first quarter of 2009 as it recorded the low at Rs 5.6. The stock has not made any progress in the last couple of years and continues in bear's grip.

Medium-term hurdle for the stock is at Rs 25. A move above this will take it further to Rs 36 or Rs 57. But it is quite likely that the stock continues wavering in the band between Rs 6 and Rs 25 in the months ahead. Investors holding on to the stock should divest their holding as it nears Rs 25.

Stop-loss should be at Rs 5 for short-term investors. But those with longer investment horizon should consider switching out of SB & T International at this juncture.

I am holding Dish TV purchased at Rs 58. Kindly advise the prospects of the company.

Vijay

Dish TV India (Rs 54): The rally that began at the October 2008 trough in Dish TV halted at the key long-term resistance at Rs 93 last July. The stock is in a medium-term downtrend since then.

This decline is halting after the stock retraced half the rally from the 2008 low. Key medium-term support for the stock is now at Rs 43. Investors can hold the stock only as long as it trades above this level.

Long-term trend will turn negative only on breach of this support. Next supports for the stock are at Rs 31 and Rs 22.

Short-term resistances are at Rs 68 and Rs 78. Investors with short-term perspective can divest their holdings at either of these levels. Long-term view will turn positive only when the stock moves beyond the resistance band between Rs 95 and Rs 105. The stock needs to move above this level to signal the intention of heading towards its previous peak at Rs 143.

Please let me know the outlook of Agro Tech Foods and Pratibha Industries.

S. Mallah

Agro Tech Foods (Rs 459.8): Agro Tech Foods is on a roll. This stock defied the market correction last year and is currently placed at a new life-time high. It is also trading 60 per cent above its January 2008 peak. Needless to add, that the long-term trend in this stock is up.

Long-term support that investors need to watch out for lies around Rs 320. Current uptrend will be threatened only if the stock goes on to close below this level.

Investors should, however, desist from buying this stock on a close below Rs 320. That will imply that the stock is heading for the next long-term supports at Rs 273 and Rs 223.

The stock will continue to wobble as it nears the psychological support at Rs 500. Long-term target on a strong move beyond Rs 500 is Rs 580.

Pratibha Industries (Rs 45.2): Pratibha Industries declined below its long-term support at Rs 40 last November. But the stock has managed to recover above this level and is currently trading just above it. Investors can hold the stock with stop at Rs 27. But decline below this level will mean that the going can get worse and decline to Rs 11 or even Rs 9.5 will be possible.

Key short-term resistance is around Rs 52. Inability to move above this level will imply that the stock will head lower in the upcoming months. But strong move above Rs 55 will pull the stock to Rs 59 or Rs 61 over the medium-term.

I would like to know the technical aspects for MOIL and outlook for Tecpro Systems. I am holding shares of them.

Karanapu Vijaya Harathi

MOIL (Rs 243.8): MOIL spiralled lower from its listing day high of Rs 591 to the trough of Rs 217 in December 2011. Structural trend continues to be down in this stock. It needs to record a strong weekly close above Rs 361 to signal the reversal in this long-term trend. Subsequent targets are Rs 405 and Rs 450.

But the manner in which the short-term rallies are unable to make any headway implies that the short-term outlook is negative. Key short-term hurdles are at Rs 278 and Rs 315. If the stock reverses down from either of these levels, it will mean that there is a possibility of the recent trough at Rs 217 being breached.

It is hard to anticipate where the stock will halt once it moves below Rs 200. Stop-loss for investors can, therefore, be at Rs 200.

Tecpro Systems (Rs 164.9): Tecpro Systems also dredged new lows to bottom out at Rs 141 in January.

The stock is not out of the woods yet and trends along all timeframes — short, medium and long — are currently down. The stock needs to move above Rs 260 to make the medium-term trend reverse higher. Subsequent targets are Rs 298 and Rs 335.

Investors should, however, divest their holding if the stock declines below Rs 141. Since the stock has limited trading history, it is hard to say where the next halt will be once this level is breached.

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