Portfolio

Query Corner: Bosch moving in a strong structural uptrend

Lokeshwarri S.K. | Updated on May 12, 2012 Published on May 12, 2012

Please advise on the outlook for Bosch and Honeywell Automation India. Can I buy and hold them for long-term?

N.S. Ganesan

Bosch (Rs 9,005.9): Bosch continues to be a trail-blazer in 2012 as well. The stock is up 35 per cent so far this year.

The stock is in a strong structural uptrend since the March 2009 low. This uptrend will be threatened only if the stock goes on to close below Rs 6,425. Subsequent supports for the stock would be Rs 6,062 and Rs 5,314.

Medium-term supports for the stock are at Rs 8,164 and Rs 7,501. Investors with short- to medium-term horizon can accumulate the stock on declines as long as it trades above Rs 7,500.

Immediate target for the stock is Rs 10,162. Long-term target for the stock is at Rs 11,032.

Honeywell Automation (Rs 2,477.3): Honeywell Automation is in a long-term down move since the July 2010 peak of Rs 3,010. But this decline has halted at the key long-term support at Rs 1,663 and the stock is once again reversing from its long-term resistance band between Rs 3,000 and Rs 3,300. Investors with short-term perspective can divest their holdings when the stock nears this resistance band.

Medium-term support for the stock is at Rs 2,280 and this can serve as support for medium-term investors. Long-term support for investors is, however, at Rs 1,620. Investors need to start worrying only on a strong close below this level. Long-term target on close above Rs 3,350 is Rs 4,097.

I bought Crompton Greaves at Rs 210. Please advise on the future prospect of this stock.

Rama Devi

Crompton Greaves (Rs 117.1): Crompton Greaves is in a severe long-term downtrend that has dragged the stock below its key support at Rs 170. The stock moved below this level in August 2011, and is moving in a band between Rs 120 and Rs 170 even since.

Near-term prospects will turn positive only if the stock goes on to record a weekly close above Rs 170.

Subsequent resistances would be at Rs 207 and Rs 261.

Investors with short- to medium-term horizon can divest their holdings at either of these levels. Long-term view will turn positive only on a close above Rs 261. That will pave the way for a rally to the stock's previous high at Rs 349.

Investors can hold the stock with stop at Rs 100. Supports on decline below this level would be Rs 91 and Rs 57.

I wish to deal in Rohit Ferro. Please let me know the prospects for the stock.

T.S. Santha Sankari

Rohit Ferro-Tech (Rs 27.6): This stock was decimated in 2008 when it crashed from the peak of Rs 195 to Rs 15. Subsequent recovery could not help the stock retrace more than one-third of its previous decline and it reversed lower from the peak of Rs 67 in November 2010. The long-term downtrend has resumed from this point.

Trend along all time-frames, long, medium and short, are currently down for this stock. Immediate supports are at Rs 21 and then at Rs 12. Medium-term resistances are at Rs 40, Rs 45 and Rs 50.

Can I buy JSW Steel at current levels?

H.P.S. Swamy

JSW Steel (Rs 627): JSW Steel is in a structural downtrend since the October 2010 peak of Rs 1,400. Though this decline pulled the stock below the key support at Rs 635 in December, it is currently attempting to hold just above this level.

The short-term trend in the stock is currently down, and the stock could move lower to the support band between Rs 450 and Rs 500 in the upcoming weeks.

Investors with a greater penchant for risk can buy the stock in declines with stop at Rs 450. But it needs to be noted that decline below Rs 450 can pull the stock to Rs 308 or even Rs 160 in the medium-term.

Resistances for the medium-term would be at Rs 824, Rs 934 and Rs 1,046. Medium-term view will turn positive only on a close above Rs 1,046. Long-term resistance for the stock will remain at Rs 1,400.

Canara Bank has moved below Rs 400. Is it prudent to buy at these levels? What are the targets for three-month time frame investment? Titan appears to be very strong around Rs 240. What are the price targets for this stock?

J.H. Krishna Murthy

Canara Bank (Rs 419): You are right in identifying that Canara Bank has a very strong support between Rs 350 and Rs 400. It bottomed at Rs 350 last December but the rally was extremely shortlived.

The stock is once again moving towards this support band. If you belong to the camp that does not mind taking on risk, then you can buy at current levels with stop at Rs 340.

There is, however, a risk of the decline getting very sharp once the stock plunges below Rs 340. Subsequent supports would be at Rs 250 and Rs 140. So investors who prefer to play safe can wait for move above Rs 580 before buying the stock. Subsequent targets are Rs 660 and Rs 844. 

Titan (Rs 244.8): Titan is one indefatigable stock that continues to dazzle investors. It is currently flirting with the resistance zone between Rs 240 and Rs 260. Investors with short- to medium-term perspective can hold the stock with stop at Rs 210.

Stop-loss for long-term investors can be much lower at Rs 150. Targets for the stock on break above Rs 260 are Rs 286 and Rs 326.

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