Please advise me the technical outlook for Bajaj Auto.

K. Venkatesan

Bajaj Auto (Rs 1,830): Bajaj Auto has been revving up, hitting newer peaks since the low of Rs 147 in December 2008. The long-term trend in the stock is up since this low. Third part of this uptrend appears to be in motion now, with the minimum target of Rs 2,360.

The stock hit the high of Rs 2,229 in January this year and is in a corrective decline. This decline has a key support at Rs 1,650. As long as the stock holds above this level, move up to Rs 2,229 or Rs 2,360 is possible.

But decline below Rs 1,650 will mean that the stock can move towards the key long-term support around Rs 1,450. Investors can use declines to accumulate the stock as long as it trades above Rs 1,400.

Please advise me on Wockhardt bought at Rs 1,275 and Coal India at Rs 325. Should I hold or sell?

Mihir Rambhia

Wockhardt (Rs 1,030.7): You can continue to hold the Wockhardt stock. It is currently poised above a key long-term support at Rs 1,000. This is also a psychological support. If your investment horizon is medium- to short-term, then you can exit the stock on move below Rs 1,000. For, that will signal a propensity to decline to the next long-term support at Rs 870.

Long-term view for the stock will turn negative only on a close below Rs 870. Conversely a reversal from current levels can take the stock higher to Rs 1,440 or Rs 1,726 in the months ahead.

Coal India (Rs 299.2): Coal India has not gone anywhere over the last three years, fluctuating in a wide trading band between Rs 300 and Rs 400. The stock appears to have significant support around Rs 295. It recovered from this level in February and December 2011 and again rebounded multiple times from here since March this year.

Investors can hold on to the stock as long as it trades above Rs 285. It would be best to exit on breach of this level, since it is difficult to know where the next halt will be, given the limited trading history.

Medium-term resistances for the stock are placed at Rs 330 and Rs 350. Investors with a short-term investment horizon should exit at these levels. The second hurdle needs to be crossed before the stock can move on to its long-term resistance at Rs 386 and its life-time high at Rs 422.

I hold shares of Shree Renuka Sugars bought at an average price of Rs 33.5. Please advise. 

Shrikant Wagh 

Shree Renuka Sugars (Rs 16.3): Shree Renuka Sugars is in a vicious downtrend since the peak of Rs 123 recorded in January 2010. The long-term trend in the stock turned extremely adverse once it declined below the December 2011 low at Rs 22.8. This level had supported the stock multiple times, in August 2007 and November 2008. That the stock is currently trading 49 per cent below this level does not bode well for its prospects.

Next support on the long-term chart exists at Rs 13.6. Since the trend along all time-frames — long, medium and short — are currently down for the stock and there are no signs of reversal yet, it would be best to exit the stock at this juncture and consider reinvestment once it clambers back above Rs 26.

Next medium-term hurdles are present at Rs 32 and then at Rs 42. The long-term view on the stock will turn positive only on a strong close above Rs 57.

I have bought Swaraj Engines at Rs 493 and Oracle Financial at Rs 2,620. What are the upper targets for these stocks?

Ramachandran Tharkabhushanam

Swaraj Engines (Rs 508): Swaraj Engines is in a broad sideways range from Rs 380 and Rs 520 since November 2010. The upper end of this trading band will be the first upper target for this stock. The stock is in a strong long-term uptrend since 2009. Though it is in a protracted sideways movement over the last two years, there is a strong possibility of the stock breaking higher to Rs 658 over the long-term.

Investors wishing to buy the stock should, however, wait for a firm break-out above Rs 550 before doing so. Else you can wait for the stock to decline and buy with stop-loss at Rs 350.

We, however, do not recommend fresh purchases on decline below Rs 350. Subsequent targets are at Rs 300 and Rs 250.

Oracle Financial Services (Rs 2,741): The correction that began in Oracle Financial from January peak is halting at a very important support level. The stock has strong support in the zone between Rs 2,250 and Rs 2,350.

Investors can continue to hold the stock as long as the stock trades above Rs 2,250.

The rebound that began from the low of Rs 2,350 in May can take the stock higher to Rs 3,000 or Rs 3,400. Investors with short- to medium-term investment horizon can exit at either of these levels.

It is likely that the stock vacillates in the range from Rs 2,250 to Rs 3,400 for a few more months. But once it breaks above Rs 3,400, next long-term target would be at Rs 4,050.

The next support on breach of Rs 2,250 level will be at Rs 1,900.

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