Query Corner: Wockhardt poised at short-term support

Could you please let me know the medium- and long-term prospects for Rolta India?

Shekar Subramanian

Rolta India (Rs 61): Trends in all-time frames, short-, medium- and long-term are down for Rolta. It breached a key medium-term support at Rs 65 in mid-November, which later turned into key resistance and restricted the stock from moving higher. After failing to rally above Rs 65, the stock is rolling down to Rs 59.

A strong fall below Rs 59 will strengthen the stock's primary downtrend and pull it down to Rs 55 and then to Rs 50 in the medium-term. Further decline below Rs 50 will drag the stock down to Rs 40 in the long-term.

Immediate resistances are at Rs 65 and Rs 70. Only a strong move above Rs 70 will turn the outlook positive and take the stock higher to Rs 77 or Rs 88 in the medium-term. Next resistances are at Rs 90 and Rs 100.

Please give your outlook on Goodyear India.

Altaf

Goodyear India (Rs 350.1): Since bottoming out in early 2009 low of Rs 55, the stock has been in a long-term uptrend.

However, the stock has been in a medium-term sideways movement in the band between Rs 300 and Rs 350 from this May, with positive bias. Strong upward breakthrough of Rs 350 will take the stock northwards to Rs 400 in the medium-term.

Investors with medium-term perspective can consider holding the stock with stop-loss at Rs 320 and long-term investors can prolong their holdings with stop-loss at Rs 290. Strong decline below Rs 290 will pull the stock down to Rs 270 and then to its next key support zone between Rs 230 and Rs 246. Subsequent long-term support is at Rs 207.

I have purchased Punj Lloyd at Rs 150. Could you please advise if I can average?

Srinivasan

Punj Lloyd (Rs 60.1): Punj Lloyd has been in a structural downtrend ever since peaking out from its January 2008 peak of Rs 589. However, finding a base at around Rs 40 in December 2011, the stock has been in a broad sideways consolidation in the range between Rs 40 and Rs 65. Strong break through of Rs 65 will be a positive sign for the stock and you can average with stop-loss at Rs 60.

But it is unlikely that the stock will reach your buy price of Rs 150 in the year ahead, as the stock has strong resistances at Rs 80, Rs 96 and Rs 110. Therefore, consider exiting from the stock in rallies. Next important resistances above Rs 110 are at Rs 135 and Rs 168.

Only a decisive up move above Rs 168 will indicate that the stock's intermediate-term downtrend has come to halt and push the stock higher to Rs 200 in the long-term.

On the other hand, a strong fall below Rs 50 will pull the stock down to Rs 45 or even to Rs 40.

What is your advise regarding medium- and long-term outlook on Wockhardt and can this be brought at current level?

Anil, Narendra Pai

Wockhardt (Rs 1,544.9): After bottoming at the January low at around Rs 250, the stock has been in a strong uptrend, gaining more than 450 per cent this year. Buying at current level is not advisable as the stock has had a strong bull-run and it appears to have peaked out.

However, registering an all-time high at Rs 1,827 in mid-November, the stock has been in a short-term corrective decline.

It is testing immediate support band between Rs 1,450 and Rs 1,500.

A fall below this band will pull the stock further down to Rs 1,200-1,250 zone in the forthcoming months. Investors can consider buying the stock at this support band with stop-loss at Rs 1,175.

Medium-term target for the stock is Rs 1,630.

Long-term target for the stock are Rs 1,700 and Rs 1,850. Investors should exit the stock if it declines below Rs 1,200 decisively as its bullish momentum will diminish and outlook will change to bearish. In that case, the stock can fall to Rs 1,000 or Rs 900 levels.

What are the prospects of Gateway Distriparks as a stock idea at current price levels?

S. Subramanyan

Gateway Distriparks (Rs 138.8): The stock is facing difficulty in climbing above its immediate resistance zone between Rs 150 and Rs 155. Strong upward breakthrough will be A cue for buying the stock with same level as stop-loss and with medium-term target of Rs 175.

Next resistance is at Rs 200. But, failure to rally above Rs 155 will jail the stock trading between Rs 120 and Rs 155. A strong fall below Rs 120 will have bearish implication and the stock can decline to Rs 100 in the medium-term. Immediate support is at Rs 127.

Short-term investors can hold the stock with stop-loss at Rs 130 and exit at upper boundary at Rs 155.

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