Bajaj Hindusthan trying to halt at key support level

I have purchased shares of Bajaj Hindusthan at an average price of Rs 24. Please give your view on this stock for the next one year.

T.P. Bhola

Bajaj Hindusthan (Rs 23.2): Bajaj Hindusthan has long-term support in the band between Rs 23 and Rs 24. The stock declined below this support zone in January and is currently attempting to stop at Rs 21.6. The double bottom at this level implies that the stock could attempt to halt here. This should, therefore, be the stop loss level for investors with both medium- and long-term perspective.

The stock will face resistance at Rs 27 and Rs 31 in the months ahead. Reversal from either of these levels will result in the downtrend resuming in the stock.

Long-term resistance for the stock is at Rs 37 and then at Rs 41. This trend will turn positive only on a firm close above Rs 41. Investors are advised to divest their holdings on a steep decline below Rs 20. Long-term charts indicate that the next halt could be in sub-Rs 10 level.

What is your advise on medium- and long-term outlook on JB Chemicals and Graphite India? Can these be bought at current levels?

Anil

J.B. Chemicals & Pharmaceuticals (Rs 82.4): Key long-term support for JB Chemicals & pharmaceuticals is at Rs 60. The stock reversed from this level in June 2012 and has been in a medium-term uptrend since then. Long-term investors can buy the stock in declines with stop-loss at Rs 55. That said, the stock will face resistance at Rs 106 over the long-term.

The stock will need to make a strong move above this level to imply that it can move on to Rs 161. Medium-term supports for the stock exist at Rs 82 and Rs 74. Medium-term investors desirous of buying the stock can do so with stop-loss at Rs 73.

Graphite India (Rs 81.7): Graphite India reversed from its long-term support at Rs 65 in December 2011 and this uptrend continues to be in force. Key support for the stock in the medium-term is in the area around Rs 79. Since the stock is hovering just above this level over the last three months, investors can buy the stock with stop-loss at Rs 76.

Decline below this level will pull the stock lower to Rs 73 or Rs 65 over the medium-term. Long-term trend will, however, not be threatened unless the stock declines below Rs 55.

Medium-term resistances for the stock will be at 90 and Rs 100. Since the zone around Rs 100 is also a psychological resistance for the stock, investors should take some profits off the table if the stock is unable to move beyond Rs 100.

If the stock manages to move beyond Rs 100, next target would be the zone between Rs 110 and Rs 125.

I have been accumulating shares of Uflex which is in a downward trend. What is the outlook for the stock?

Panini Deshpande

Uflex (Rs 82.4): Uflex has been in a strong long-term downtrend that has resulted in the stock losing 75 per cent from its October 2010 peak. The stock has also breached its key long-term support at Rs 154. There are no signs of a trend reversal, and the stock could be heading towards the January 2009 trough at Rs 51.

It would, therefore, be best to switch out of this stock at current juncture. You can consider reinvestment on a close above Rs 135. Key long-term hurdle is present at Rs 170. This level needs to be breached before the stock can head higher to Rs 200 or Rs 230.

I am holding PC Jeweller purchased at Rs 182. I am a mid-term investor. Should I book loss?

Siddharth Jain

PC Jeweller (Rs 140.6): AsPC Jeweller was listed towards the end of 2012, there isn’t much history with which technical analysis can be done.

The decline from the peak of Rs 195 formed in January 2013 appears to have ended at the recent low at Rs 118. The rally from this low is still holding.

Therefore, investors can hold the stock with stop-loss at Rs 115. It would, however, be hard to judge where the next halt will be once the stock slides below this level.

Medium-term hurdles will be at Rs 147, Rs 157 and Rs 166. Inability to move beyond the first hurdle will imply that the outlook remains under a cloud.

I have shares of Parabolic Drugs bought at an average price of Rs 28. Please advise whether I can hold the stock for another 1-2 years.

D. Koilpitchai

Parabolic Drugs (Rs 8.9): Ever since the stock’s listing in July 2010, the stock has been on a long-term downtrend, forming lower peaks and troughs. In November 2012, the stock decisively broke through key support at Rs 20 by tumbling steeply.

The stock is hovering around its all-time low. Exit from the stock.

Key resistances are at Rs 11 and Rs 14. Only a strong up move above Rs 14 will take the stock higher to Rs 20. Next resistance is at Rs 27. The stock needs to rally beyond Rs 53 to alter its long-term downtrend and take it higher to Rs 70.

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