Portfolio

Query Corner

| Updated on December 14, 2013 Published on December 14, 2013

I am holding shares of Kennametal bought at Rs 590. How will the stock move in future?

Gopinath

Kennametal India (Rs 515.7): The stock’s long-term downtrend that started from its all-time high of Rs 1,247 in April 2012, halted at its key long-term support level at Rs 400 in August 2013. Thereafter, the stock moved sideways forming a significant base at this level and began to move higher.

Short-term trend for the stock is up. It is likely to face resistance in the zone between Rs 550 and Rs 560 in the ensuing weeks. Strong breach of this level can take it higher to Rs 600 and then to Rs 650 in the medium-term. Investors with medium-term perspective can hold the stock with a stop-loss at Rs 460, which is the immediate support.

Long-term investors can hold the stock with a stop-loss around Rs 400. Targets on a move above Rs 650 are Rs 750 and Rs 800. But, a decisive breach of Rs 400 will strengthen the downtrend and pull the stock down to Rs 350 or Rs 310.

Is it the right time to purchase Tata Coffee and Apollo Hospitals?

N. Raman

Tata Coffee (Rs 956.8): Tata Coffee witnessed sharp rise in November 2012 and went on to record new high around Rs 1,650. Similarly, the stock fell sharply in June 2013 after encountering key resistance at Rs 1,650. Medium-and short-term trends for the stock are also down.

The stock is about to test its significant support at Rs 940.

Decisive fall below this level can pull the stock down to Rs 900 and then to Rs 800 in the medium-term. Going forward, the stock has important resistances at Rs 1000, Rs 1150 and then at Rs 1250.

The stock’s key long-term support and trend deciding level is at Rs 700. This level can be used as opportunity to buy with stop-loss at Rs 670. Key support below this level is at Rs 600.

Apollo Hospitals Enterprise (Rs 824.4): Strong rally in this stock between early 2009 and 2013 may have encouraged investors to hold on to the stock and reap the benefits. However, that leg of the up-move appears to have come to an end when the stock marked a new high at Rs 1,096 in May 2013.

The stock has been on an intermediate-term downtrend since then. But, the key support zone between Rs 775 and Rs 800 can limit the downtrend. If the stock breaches this level, then the next supports are at Rs 675 and Rs 600.

Long-term investors can use the declines as opportunity to buy the stock.

Investors with short-term perspective and greater penchant for risk can buy the stock around Rs 800 with stop-loss at Rs 775.

An upward reversal can take the stock higher to Rs 860 and Rs 900. Next important resistance is at Rs 1,000.

I want to know technical support levels for Gabriel India and Venky’s?

Pradeep M.

Gabriel India (Rs 22.7): The stock has been on a medium-term uptrend from its August low around Rs 16. However, the stock encountered key resistance at Rs 25 in late November and started declining. The important long-term support is in the band between Rs 19 and Rs 20. Significant supports below this band are pegged at Rs 16 and Rs 14. Key resistances above Rs 25 are at Rs 27 and Rs 30.

Venky’s India (Rs 462.9): The stock has moved between the support at Rs 425 and the resistance at Rs 510 since June this year. Within this range, the stock has support at Rs 450 and resistance at Rs 487 levels. A decisive fall below Rs 425 can pull the stock down to Rs 400. Subsequent supports are at Rs 380 and Rs 350.

On the upside, an emphatic breakthrough of Rs 510 will take the stock northwards to Rs 550, Rs 570 and Rs 600 levels in the medium-term.

I am a long-term investor, holding shares of Persistent Systems purchased at an average price of Rs 504. Please advise whether I should book profits or hold on to the stock for the next one to two years.

V.H. Rao

Persistent Systems (Rs 873.4): Persistent Systems has gained more than 80 per cent from its July low of Rs 477. Since you are sitting on huge profits, it is a good time to book some profits at this juncture. During October and November, the stock accelerated to record new high at Rs 906. Since then the stock has been moving sideways with negative bias. It has immediate support at Rs 800. A fall below this support will drag the stock down to Rs 700 or even to Rs 600 in the medium-term. Next important long-term support below Rs 600 is pegged at Rs 500.

Investors with a long-term perspective can consider holding the stock with a stop-loss at Rs 500. Targets are Rs 906 and then Rs 1,000.

Yoganand D.

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