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I have invested in shares of EID-Parry and Everest Industries which are now at 50 per cent below my purchase price. I am a long-term investor. Should I hold these stocks or book losses?
A.R.Ramanarayanan
EID-Parry (Rs 114.9): The stock has declined 60 per cent from its life-time high of Rs 289.9 (price adjusted) registered in December 2011. Since then, the stock has been on a long-term downtrend, forming lower peaks and troughs.
Medium- as well as short-term trends are down for the stock. However, its long-term support band between Rs 100 and Rs 110 is cushioning it. Long-term investors can consider holding it with stop-loss at Rs 95.
An upward reversal from the aforementioned support band can take the stock higher to Rs 130 and then to Rs 150 in the medium-term.
It has key medium-term resistance in the range between Rs 170 and Rs 180.
A strong break above this range will take the stock higher to Rs 200 and to Rs 230 in the long-term.
On the other hand, conclusive decline below Rs 100 can reinforce bearish momentum and drag the stock down to Rs 80. Next long-term support is at Rs 60 level.
Everest Industries (Rs 142): After encountering key long-term resistance at Rs 280 in January, the stock started to decline. Since then, the stock has been on an intermediate-term downtrend.
It has retraced most of its 2012 gains and is currently testing its key long-term support zone between Rs 120 and Rs 130. Next long-term term support is at Rs 100.
Long-term investors can hold the stock with stop-loss at Rs 100. An emphatic fall below this support level will strengthen its ongoing downtrend and pull it down to Rs 80 and then to Rs 58 in the long-term.
The stock can encounter important long-term resistance at Rs 175.
A decisive break above this level will alter the stock’s short-term downtrend and push it higher to Rs 200 and to Rs 220 in the medium-term.
Can you give your outlook on L&T Finance Holdings and Hindustan Zinc?
Manoj
L&T Finance Holdings (Rs 57.1): Ever since peaking out from the December 2012 high of Rs 97.3, the stock has been on an intermediate-term downtrend.
In late July, the stock conclusively broke its key support level of Rs 71, from which it had bounced back during March and April this year. Nevertheless, subsequent long-term support level band between Rs 53 and Rs 55 arrested the stock’s sharp fall in the recent times.
Short-term trend is also down for the stock. A strong fall below Rs 53 will pave way for a decline to Rs 47. Subsequent supports below Rs 47 are positioned at Rs 44 and Rs 40.
Key resistances are pegged at Rs 65 and Rs 71. Only a strong rally above Rs 71 will reverse the stock’s short-term downtrend and push it upwards to Rs 76 or Rs 81 in the medium-term.
Hindustan Zinc (Rs 101.3): Hindustan Zinc has been in a long-term uptrend from its October 2008 low of Rs 21.
This trend will remain in place as long as the stock trades above Rs 88. However, medium-term trend has been down for the stock since encountering resistance at Rs 145 in December 2012.
The stock bounced back from its long-term support level at Rs 95, recently . But, the stock is facing significant long-term resistance at Rs 110. Strong break above this will take the stock higher to Rs 125 in the medium-term. Key long-term resistance beyond Rs 125 is at Rs 145. On the downside, plunge below Rs 88, will drag the stock down to the range between Rs 72 and Rs 75 .
Kindly advise me about the medium- and long-term prospects of Wockhardt and Amtek Auto.
T.V.K. Sankaran
Wockhardt (Rs 460.1): In May, the stock emphatically broke its key long-term support at Rs 1,500 falling sharply. Long-term trend has been down for the stock from its all-time high of Rs 2,166, made in March. Medium- and short-term trends are also down for the stock. Moreover, the stock is currently moving circuit to circuit. Investors interested in taking exposure in the stock have to wait for the dust to settle before entering into it. It is now testing significant long-term support in the band between Rs 400 and Rs 440. Strong decline below this support can pull the stock down to Rs 320 and then to Rs 275 in the ensuing months. The stock has immediate resistance at Rs 500 and next at Rs 543. A strong move above this can take the stock higher to Rs 675 in the long-term.
Amtek Auto (Rs 61.9): Amtek Auto has been in bears’ grip ever since its 2007 peak of Rs 526. In 2009, the stock tried to recover, but failed to rally above Rs 240 and resumed its long-term downtrend. The stock is in downtrend in all time frames — long-, medium- and short-term. Currently, it is testing its support zone at Rs 60. A decisive dive below this level will see the stock decline to Rs 50 and then to Rs 42 (November 2008 low) in the medium-term. On the other hand, the stock needs to rally above Rs 95 to alter its medium-term downtrend. Key resistance are positioned at Rs 71 and Rs 80 levels.
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