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Please let me know the short and long term outlook for Aurbindo Pharma purchased at ₹397 and Alembic Pharma at ₹197.

Kunal Gupta

Aurobindo Pharma (₹490.4): The stock decisively broke out of a key resistance at ₹200 in October 2013 and started to accelerate. Since then, it has been gaining more than 150 per cent. It conclusively breached its significant long-term resistance at ₹265 in November. After registering a new high at ₹536 on February 7, the stock has begun to slow.

You are sitting on a comfortable 23 per cent gain at this juncture. It is advisable to take profits off the table. Indicators in the daily chart are displaying a negative divergence implying trend reversal is on the cards. Therefore, we can't rule out a short-term corrective downtrend to ₹410 or ₹375 levels. Next important support is pegged at ₹300. The stock has key immediate resistance at ₹500. A strong rally above this level can take the stock higher to ₹550. As long as it trades above the ₹250 to ₹265 support band, its long-term trend remains bullish.

Alembic Pharmaceuticals (₹231.8): The stock has been on a long-term uptrend from its early 2012 low at ₹34. Even its medium-term trend is up. But the stock's short-term trend has been sideways in the band between ₹190 and ₹240 from November 2013. The stock is finding difficulty in breaking out the key resistance at ₹240. Moreover, the indicators are displaying negative divergence signalling a potential trend reversal. Hence, you can consider booking your 17 per cent gains in this stock at this juncture. Inability to surpass ₹240 will bring the stock down to its lower boundary at ₹190 in the medium term, which will erode your profits. The stock has immediate base at ₹210. Significant supports below ₹190 are placed at ₹170 and then at ₹130. A decisive fall below ₹130 will mar the medium-term uptrend and bring the stock down to ₹100. But an upward breakthrough of ₹240 can take it to new highs at ₹260.

Request one year technical outlook for Maruti Suzuki.

Panini Deshpande

Maruti Suzuki India (₹1,643.3): After spending a brief time period above the significant long-term resistance zone between ₹1,750 and ₹1,775 during December 2013 and January, the stock nose-dived in late January. This resistance zone is therefore a significant level. Since September 2012, the stock has been on a wide sideways consolidation phase between ₹1,250 and ₹1,775. Only a decisive breakout of the upper boundary will signal a bullish outlook and take it higher to ₹1,900 or to ₹2,000 in the long-term. But, failure to move above ₹1,775 will confine the stock to moving in this range for the next one year. Key immediate supports are positioned at ₹1,550. A strong decline below this support will reinforce bearish momentum and drag the stock down to its next support at ₹1,400 in the medium term.

I am holding shares of Helios and Matheson purchased at ₹116 and Biocon at ₹417. Kindly advise the technical outlook.

Murugesan

Helios & Matheson Information Technology (₹125.5): Since taking support at ₹35 in March 2013, the stock has been on a long-term uptrend, shaping higher peaks and trough. The medium-term trend is also up. However, the short-term trend is under threat. After encountering the long-term resistance in the band between ₹135 and ₹140 last week, the stock started to decline. Further, the indicators in the weekly chart are displaying a prolonged negative divergence since November 2013.

An emphatic drop below the immediate support at ₹120 will drag the stock down to ₹110 and then to ₹100. Therefore, you can book the minor profits available and exit the stock at current levels. Further, a strong decline below ₹100 will mitigate the medium-term uptrend and pull the stock down to ₹85. Only a conclusive breakthrough of the long-term resistance band between ₹135 and ₹140 will strengthen the uptrend and take it upwards to the ₹160 to ₹170 range. But, this break out is unlikely in the short-term as the indicators are signifying that the trend reversal is on the cards.

Biocon (₹427): After encountering a key resistance at ₹485 in December 2013 and again in January 2014, the stock changed its trend. It started to decline and has been on a short-term downtrend.

The stock is moving sideways around the immediate support level at ₹420. A fall below this support will drag the stock down to ₹400 and then to ₹380. Exit the stock and re-enter at the key support level at ₹380. Subsequent long-term support below ₹380 is at ₹350. On the other hand, ₹500 is the key resistance after the immediate resistance at ₹455.

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