Market Strategy

Query Corner: Godrej Consumer in steady bull run

Lokeshwarri S.K. | Updated on June 16, 2012 Published on June 16, 2012

Could you please advise on short- and long-term view of Godrej Consumer Products and CORE Education and Technologies? Is it right time to buy these stocks?


Godrej Consumer Products (Rs 554.9): Godrej Consumer Products is in a multi-year bull run. The stock recorded the high of Rs 601 in June and is currently trading close to this peak. The long-term trend in the stock is up. It has strong support in the region between Rs 370 and Rs 406. Long-term investors can hold the stock as long as it trades above this band.

Break below Rs 370 will drag the stock to Rs 346 or Rs 289. Long-term target on a strong break above Rs 600 is Rs 755.

Short-term supports for the stock are at Rs 480 and Rs 458. Investors with greater risk appetite can use declines to these levels to accumulate the stock with stop at Rs 455.

CORE Education and Technologies (Rs 312): CORE Education and Technologies is also in a steady uptrend since the March 2009 low at Rs 42. The stock is, however, pausing since April 2011 and moving in a sideways range between Rs 230 and Rs 350. Long-term investors can hold the stock as long as it trades above Rs 230. Ability to hold above this level will mean that the stock can move on to Rs 435 or Rs 553 over the next couple of years.

Investors should, however, divest their holdings on decline below Rs 232. Subsequent supports are at Rs 195 and Rs 160.

Please advise on the long-term prospects of Hatsun Agro Product. Can I enter this stock at current levels?

J. Senthan

Hatsun Agro Product (Rs 83): This stock continues in a strong long-term uptrend. It recorded a life-time high at Rs 99 in February and is currently in the corrective mode. This correction dragged the stock to its key short-term support at Rs 68. The zone between Rs 66 and Rs 68 is key short as well as medium-term support for the stock.

Investors can hold the stock only as long as it trades above this support zone. Those wishing to purchase the stock can also do so in declines with stop at Rs 65. But further purchases are to be avoided on close below Rs 65. That will imply that the stock is heading lower towards the supports at Rs 55 or Rs 45.

Medium-term targets for the stock are Rs 87 and Rs 99. Long-term targets on strong move above Rs 100 are Rs 121 and Rs 154.

I hold Karnataka Bank purchased at Rs 135 . Please advise on the medium- and long-term outlook for this stock.

V. Rajiah

Karnataka Bank (Rs 86.2): Karnataka Bank has been severely battered since November 2010 and the stock is drawing close to its long-term support formed in March 2009. Immediate supports for the stock are at Rs 66 and after that at Rs 53.

Long-term investors can hold the stock with stop at Rs 52. But a strong break below Rs 52 will denote an impending decline to Rs 28 or lower in the months ahead.

The stock will face resistance at Rs 113 and Rs 144 in the medium-term. Investors with a shorter investment horizon can exit the stock at either of these junctures. Key long-term hurdle for the stock would be at Rs 193. This hurdle needs to be crossed to clear the path for a rally to the previous high at Rs 264.

Please provide technical guidance on Everest Industries and Piramal Glass.

Kiran Negi

Everest Industries (Rs 178.1): Everest Industries declined below its key long-term support at Rs 130 in December 2011. But it reversed higher after forming a trough at Rs 102. The long-term trend has, therefore, not reversed lower yet and investors with a long-term investment horizon can continue to hold the stock with stop at Rs 100.

The stock will face resistance at Rs 216 and Rs 285 in the months ahead. Investors with short- to medium-term perspective should exit the stock on failure to move beyond Rs 216.

Piramal Glass (Rs 103.4): The structural uptrend that began from the March 2009 low at Rs 13 continues to be in force in Piramal Glass. The stock recorded the peak of Rs 141 in November 2010 after which it is moving in a broad trading band. The upper and lower bounds of this trading range are at Rs 80 and Rs 150.

Critical support from a medium-term perspective is at Rs 67 and investors can hold the stock as long as it trades above this level. If the stock manages to hold above Rs 84, it will mean that the stock can move higher to Rs 170 or Rs 220 over the long-term. Investors with a shorter investment perspective can exit the stock as it nears the former peak at Rs 160.

Could you please provide technical view on Bank of Baroda?

R.M. Kumarappan

Bank of Baroda (Rs 702.7): Bank of Baroda is moving in a series of lower peaks and troughs since November 2010. This down-move has retraced half the gains made by the stock since March 2009. Key long-term support for the stock is at Rs 510. Investors can buy the stock on declines as long as it trades above this level. Fresh purchases should, however, be avoided on a decline below this support.

Medium-term resistances will be at Rs 783, Rs 840 and Rs 890. Long-term view will turn positive only on a strong close above the outermost hurdle.

Readers can send in their queries, on not more than two companies, to 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.

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