Query Corner: Titan Industries reversing from long-term support

I would like to buy Titan at current levels. Please share your view on this.

Nazar

Titan Industries (Rs 237): This is a good level for long-term investors to buy Titan Industries. If we retrace the entire up-move in the stock from the low at Rs 33 formed in 2009, the 38.2 per cent Fibonacci retracement support occurs at Rs 208. This level also cushioned the stock’s decline in June 2012 and June 2013.

Reversal from this level means that the long-term trend in the stock remains up. It also implies that the stock can break above Rs 313 over the long-term. Investors can, therefore, buy the stock with a stop-loss at Rs 200.

That said, decline below Rs 200 will mean that the stock can tumble lower to Rs 175 or even Rs 142.

Medium-term resistances for the stock are placed at Rs 275 and Rs 315. Minimum long-term target, if the stock manages to hold above Rs 200, is Rs 373.

Please share your technical view on KEC International.

Prabha R.J.

KEC International (Rs 32): KEC International retreated to its long-term support at Rs 23 in August this year. The positive takeaway is that the stock did not breach this level and is attempting a rebound. Investors should hold this stock only as long as it trades above Rs 20.

The stock will face medium-term hurdles at Rs 45 and Rs 60. Investors with short- to medium-term perspective can exit the stock at either of these levels.

Key long-term resistance is seen at Rs 80. Inability to move above this level will result in the stock fluctuating between Rs 25 and Rs 80 for a few more years.

Can I buy PC Jeweller and Shree Ganesh Jewellery at current market price?

K. Kasi Nathan

PC Jeweller (Rs 92): This stock has limited trading history since it was listed in December 2012. It is, therefore, not possible to give a long-term outlook for the stock. But the stock is in a downtrend since its January peak of Rs 195.

This downtrend had halted at the low of Rs 65.9 formed in July, and an uptrend is in progress since then. Investors wishing to buy the stock can do so with a stop-loss at Rs 77.

The stock can move higher to Rs 109 or Rs 115 over the medium-term. But fresh purchases should be avoided on a decline below Rs 77. The medium-term trend will turn positive only on a strong close above Rs 115. Subsequent targets are at Rs 131 and Rs 146.

Shree Ganesh Jewellery (Rs 53): This jewellery stock was listed in April 2010 and has seen a volatile trading history since then.

The stock recorded its life-time high at Rs 287 in July 2011, and then went into a steep fall, bottoming at Rs 66 in May 2012. The stock is currently trading below this trough indicating that the long-term outlook is extremely weak.

Since the stock has limited trading history, it is difficult to predict where the next halt for the stock can be. Investors can wait for the stock to clamber above Rs 66 again before venturing to buy it. Subsequent targets are at Rs 83 and Rs 106.

The stocks of Accelya Kale Solutions and R.S. Software have just come out of a long-term consolidation phase. What is the technical view on these stocks?

Vageesh

Accelya Kale Solutions (Rs 629): You are right in pointing out that the stock broke out of a long-term consolidation phase in September 2012.

It has not looked back since then, gaining 280 per cent till date.

The stock formed a peak at Rs 790 in March 2000 and this could be the long-term target towards which it is headed.

But investors sitting on gains can book some profits at current levels and hold the rest with a stop-loss at Rs 550. Stocks that tend to move up this fast can also retreat rapidly, giving investors no time to divest their holdings.

Long-term trend in the stock will, however, reverse lower only on a close below Rs 440.

R.S. Software (Rs 143): R.S. Software too broke its long-term resistance at Rs 92 in July 2012. But the rally that followed was more moderate than the one in Accelya Kale. It ended at Rs 209 and the stock had retreated to Rs 102. The band between Rs 90 and Rs 100 is a good support zone for the stock and investors can hold the stock or purchase it with a stop-loss at Rs 90.

Reversal from these levels can take the stock to Rs 208 or Rs 268 in the months ahead. Key long-term resistance for the stock is placed at Rs 224. Inability to move above this level will result in the stock vacillating in the range of Rs 100 and Rs 200.

I have purchased Idea Cellular at Rs 177. Should I continue to hold the stock?

H. Shanmukh Swamy

Idea Cellular (Rs 183): Idea Cellular is in a stellar uptrend since last August, gaining 154 per cent since then. The stock is also firmly entrenched above its life-time high at Rs 161 indicating that the long-term trend is up for the stock. Investors with short- to medium-term perspective can hold the stock with a stop-loss at Rs 160.

The stock could face some resistance as it nears the psychological level of Rs 200. It could then spend some time moving in the range between Rs 140 and Rs 200. Long-term trend will reverse lower only on a close below Rs 140.

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