Query Corner: Lupin's chart, a pleasing sight for tired eyes

Kindly enumerate on the long-term outlook for L&T purchased at Rs 1,928.

R.M. Kumarappan

Larsen and Toubro (Rs 1,161.5): Larsen and Toubro has long-term resistance in the zone between Rs 2,200 and Rs 2,400. It peaked in this zone in November 2007 and again in November 2010. The stock is in a long-term decline since its November 2010 peak that has resulted in a decline of 55 per cent.

Key long-term support for the stock is at Rs 1,196. The stock declined below this level but is trying to form a base around the psychological support at Rs 1,000. This level also coincides with the downward gap formed in May 2009.

Decline below Rs 1,000 can prove disastrous for the stock since the next support is far below at Rs 557. Investors can, therefore, consider divesting their holdings on decline below Rs 1,000.

Resistances for the months ahead would be at Rs 1,460 and Rs 1,752. Long-term ceiling will continue to be at Rs 2,200.

I bought Jet Airways at Rs 1,100 and DLF at Rs 525. Please suggest whether to hold or exit at current level.

C.V. Nareyene

Jet Airways (Rs 305.8): Jet Airways made the recent low at Rs 168 in December 2011 and is currently in a medium-term uptrend. Investors with short- to medium-term perspective can hold the stock with stop at Rs 240. If the stock manages to hold above this level, it can move higher to Rs 460, Rs 547 or Rs 635 in the upcoming months.

Medium-term view will stay under a cloud as long as the stock trades below Rs 635. This resistance needs to be cleared before the stock moves higher to Rs 930, Rs 1,050 or Rs 1,380 over the long-term.

Stop for long-term investors can be at Rs 168. Breach of this level will mean that the stock can move down to the life-time low at Rs 115.

DLF (Rs 186.2): DLF is moving in a downward trajectory since October 2009. It is attempting to form a base around Rs 170 since August 2011. Investors with short- to medium-term perspective can hold the stock as long as it trades above this level. But breach of this level will mean that the stock can hurtle downwards to Rs 124.

Critical resistance for the months ahead would be at Rs 300. Inability to move above this level will imply that the stock can slide down to Rs 170 or below again. Hurdles above are at Rs 370 and Rs 490.

Key long-term resistances for the stock are at Rs 500 and Rs 550. The stock needs to move above these obstacles before the long-term outlook turns positive. Else, the stock can remain in the wide band between Rs 100 and Rs 500 for a few more years.

Please provide your analysis on NTPC.

T. Arun Laplace

NTPC (Rs 145.2): The long-term outlook in NTPC reversed lower when it moved below Rs 160 in April. The stock has also breached the next support at Rs 150 making the near-term view pretty bleak. Trends along all time-frames are down for the stock.

It appears to be heading towards its October 2008 trough at Rs 113 now.

It would be best to keep away from the temptation to buy the stock at this juncture as it would be akin to catching a falling knife. Investors can wait for a close above Rs 170 before contemplating this course of action.

Key resistance that can thwart up-moves exists around Rs 190. Investors with short-term perspective can divest their holdings if the stock fails to move above this level. Subsequent resistances would be at Rs 220 and Rs 240.

Please advise on the medium-term outlook for MMTC.

Narendra Palnitkar

MMTC (Rs 742.9): Despite its status as a PSU, MMTC is one of the most volatile stocks, given to rallying sharply and plunging in similar manner. The stock spiralled lower from the November 2009 peak of Rs 1,885 to the December low at Rs 438. A medium-term uptrend is, however, in motion since this low, implying that the stock can attempt to move higher from these levels.

Stop-loss for medium-term investors should be at Rs 660. Breach of this level will mean that the stock can move lower towards the long-term support around Rs 450.

If the stock manages to hold above Rs 660, it will mean that a rally to Rs 1,000 is possible again in the upcoming weeks.

The real test of the strength in the stock's current up-move would be its ability to move beyond Rs 1,000. If it manages to do that, subsequent resistances would be at Rs 1,215 and Rs 1,400.

Please advise on the medium- and long-term outlook of Lupin Ltd.

Anil

Lupin (Rs 537.1): The graph of Lupin is a pleasure to behold in these times when almost every stock appears to be plunging in to a bottomless pit. On the other hand, Lupin has defied gravity in these turbulent times, managing to hold close to its life-time high at Rs 574. The stock is up 20 per cent this year.

The long-term trend in this stock will not be threatened unless it goes on to close below Rs 400. Long-term investors can consider this as a stop-loss level. If the stock buckles to the all-pervasive selling pressure, it will move in the band between Rs 400 and Rs 600 for a few months before attempting to move beyond Rs 600.

Supports on a decline below Rs 400 are at Rs 350 and Rs 290.

Readers can send in their queries, on not more than two companies, to >techtrail@thehindu.co.in

Queries can also be sent > by post to: Tech Trail, 859/860 Kasturi Buildings, Anna Salai, Chennai 600002.

We would endeavour to answer as many queries as possible. However, constraints of space will limit the responses featured under this column

c:set var="prUrl" value="https://premium.thehindubusinessline.com" />

Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.


  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.


  • Ad free experience

    Experience cleaner site with zero ads and faster load times.


  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

Related

This article is closed for comments.
Please Email the Editor