What is your outlook on SKF India and Cipla? Can these stocks be bought at current levels?

Anil

SKF India (Rs 495.5): SKF India is in a sideways consolidation phase over the last two years. This phase is resulting in the stock moving in a band between Rs 500 and Rs 700. The stock is currently testing the lower end of this trading band. The Rs 500 level is a critical retracement support as well as psychological support, which makes it a good entry point for investors.

But the risk stems from the fact that there is no reversal in the charts yet. Therefore, only those with a large risk appetite can buy the stock at current level with stop-loss at Rs 470. Drop below this level will result in the decline continuing to Rs 424 or Rs 355.

Those who prefer to play it safe can wait for close above Rs 580 before buying the stock. Subsequent targets are Rs 640 and Rs 690. Long-term target is at Rs 873.

Cipla (Rs 399.1): Cipla is also in a long-term uptrend. The third part of the move that began from the October 2008 low is currently in motion. This wave has targets of Rs 412 and then Rs 504. Since the stock has already achieved the first target, firm close above Rs 430 will take the stock towards Rs 504.

Key medium-term support for the stock is at Rs 350. Sideways movement in the range of Rs 350 and Rs 420 would be positive for long-term prospects. Close below this level will mean the stock is heading towards the long-term support at Rs 320. Long-term investors need not worry as long as the stock trades above Rs 320.

What are the prospects for Sintex Industries?

Panchapakesan N.

Sintex Industries (Rs 40): Both medium- as well as long-term trend in Sintex Industries is currently down. The uptrend from 2009 low ended at Rs 237 in November 2010 and the stock has erased all its post-2009 gains since then. It is currently close to the trough recorded in March 2009 at Rs 35.

Investors should hold the stock only as long as it trades above Rs 35. Slide below this level can take the stock all the way to Rs 20 or even Rs 11.

It is also recommended to resist the temptation to buy the stock at these levels. The stock needs to cover a lot of ground before its medium- or long-term outlook turns positive. Close above Rs 75 is required to make the medium-term view positive for the stock. The long-term view will turn positive only on close above Rs 114.

I bought shares of ONGC at Rs 338. Please let me know the medium- and long term outlook for the stock.

G. Somashekhar

ONGC (Rs 315.4): The long-term downtrend that began from the September 2010 peak in ONGC appears to have ended in November 2012. From this low, a fresh leg of the long-term uptrend that began in January 2009, seems to have commenced.

The stock is trading sideways in the band between Rs 300 and Rs 350 since January. This could be a consolidation phase before the stock breaks higher to Rs 368 or Rs 400. Investors can, therefore, hold the stock with stop-loss at Rs 282. Investors can also buy the stock on declines with the same stop-loss.

The stock is also poised at a critical level from a long-term perspective. Sharp break above Rs 370 will mean that the third leg of the move that commenced at the 2009-low has taken off. This leg can take the stock well beyond Rs 400 level to Rs 465.

I am holding shares of Rolta India purchased at Rs 77. What is the long-term prospect of this share? I can hold them for more than three years, if required.

Sunil Kumar

Rolta India (Rs 59.9): Rolta India continues to be in bear’s grip. But investors can take heart from the fact that it has drawn close to its long-term support base between Rs 40 and Rs 50. You can hold the stock as long as it trades above Rs 40. It would, however, be best to divest your holding if this level is breached.

Key medium-term resistance is placed at Rs 110. This level needs to be crossed to take the stock toward its next target at Rs 150 and Rs 180.

I have purchased NCC at Rs 45. Should I hold or sell?

H.K. Nandecha

NCC (Rs 26.6): This stock is in a vicious downtrend since January 2008. The recent bout of weakness witnessed in June this year has made the stock drop below the key long-term support at Rs 36. We would like to see the stock clambering above this level again before pronouncing that the short-term trend has turned positive.

Next support on the long-term chart is way off, around Rs 14. You can adopt one of these strategies: One, you can hold the stock with stop-loss at Rs 18. Or, you can divest your holding at current level and re-enter the stock after it moves above Rs 60.

Close above Rs 60 will be the first indication that the outlook for the stock could be turning more conducive. Next resistance is placed at Rs 88.

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