In the February 01, 2009 issue of Business Line you had reviewed KEC International with the price targets of Rs 312. This target was met in the recent upsurge in the market. Please explain your updated technical view on this stock. Amit Shanker
KEC International (Rs 415): KEC International has moved beyond our long-term target of Rs 312 to the peak of Rs 449 recently. The stock is currently halting around the next long-term target of Rs 420 that is 38.2 per cent retracement of the down-move from the January peak of Rs 914. A sideways move between Rs 320 and Rs 450 would be positive from a medium-term perspective and pave the way for a rally towards Rs 520 or Rs 620 over the next 12 months.
Key intermediate resistance for the stock is at Rs 620 and this level needs to be cleared to signal that the long-term trend is turning positive. Investors with a medium-term perspective can buy in declines as long as the stock holds above Rs 320. Stop for long-term investors can be at Rs 240.
I want to invest in Unitech with a 12 to 18 month perspective. Kindly suggest the entry level and targets. T P Bhola
Unitech (Rs 83.6): Unitech formed a double-bottom around Rs 25 between November 2008 and March 2009 and has been in a strong uptrend since then.
A long-term trough could have been formed at these levels and investors with a long-term perspective can buy the stock in declines as long as it holds above Rs 25. The stock is currently in a correction that can take it lower to Rs 62 or Rs 53.
Investors with a medium-term horizon can buy on reversal to the levels indicated above with a stop at Rs 52.
If Unitech holds above this level, the stock can rise to Rs 225 over the next 12 to 18 months. Long-term target beyond Rs 225 is Rs 350.
Please let me know the outlook for Orbit Corporation. Narendra Pai
Orbit Corporation (Rs 160.6): The long-term trend in Orbit Corporation is down since the peak of Rs 1,080 recorded in January 2008. The current up-trend will be labelled as a counter-trend rally unless the stock records a weekly close above Rs 328.
Key long-term resistance for the stock is at Rs 437 and the stock can reach this level if it holds above Rs 115 over the next three months.
The near-term trend in the stock is down. Short-term supports for the stock are at Rs 138 and Rs 115.
Short and medium-term investors can buy in declines as long as the stock trades above Rs 115. Long-term investors can hold the stock with a stop at Rs 100.
I am holding Great Offshore purchased at Rs 326. What is the outlook for this stock? Also please give your view on Ponni Erode purchased at Rs 42. Praval Bhatt
Great Offshore (Rs 440.2): Great Offshore is in a strong up-trend since the March trough that has resulted in the stock more than doubling in value. The stock is currently halting at its medium-term resistance at Rs 436. The zone between Rs 400 and Rs 450 is a strong resistance zone for the stock. If this zone is cleared, the stock can head towards Rs 567. Short-term investors can hold the stock with a stop at Rs 350. Investors with a longer horizon can hold as long as the stock trades above Rs 300.
The stock is also reversing lower from the strong resistance zone around Rs 60. It reversed from this area in December 2007 as well to move lower to Rs 20 over the next 12 months. Investors should therefore book some profits at current levels and hold the rest with a stop at Rs 47.
Decline below this level will imply an impending move towards Rs 39 or Rs 25 over the medium-term.
What are the chart indications for Larsen and Toubro in the long run? Paras Nath Rai
Larsen and Toubro (Rs 1,607.7): Larsen and Toubro is in a long-term down-trend since November 2007 that made it decline over 75 per cent from its peak at Rs 2,285.
The fall halted at Rs 557 in March 2009 and the stock is in a strong up-trend since then. It is however too early to decide if the long-term correction in the stock has ended. It is currently halting around key long-term resistance at Rs 1,600.
A reversal from this level will mean that the stock continues to be in a long-term bear market and the up-move from March lows was just a counter-trend rally. This would translate in to a decline to Rs 1,120 and Rs 990 over the next three months.
A strong weekly close above Rs 1,700 is required to pave the way for a rally to the former peak at Rs 2,335 or above. Short-term investors can buy in declines as long as the stock holds above Rs 1,330. Long-term investors can hold as long as the stock trades above Rs 1,000. A decline to or below Rs 1,000 should be utilized by long-term investors to accumulate the stock.
Please give the short and medium-term outlook of Tata Tele (Maharashtra) and KEI Industries. Dr. Kirti
Tata Tele Maharashtra (Rs 36.6): This stock has strong long-term support in the zone between Rs 12 and Rs 20. It has rebounded strongly from this zone four times since 2004.
It formed a long-term trough at Rs 12.5 in October 2008 and has been soaring sky-ward since then. Tata Tele Maharashtra has already retraced half the losses made in the decline from December 2007 peak. The stock faces strong resistance at Rs 39 and since it is struggling to rise above this level, investors with short and medium-term perspective can take some money off the table at this juncture and hold the rest of their holdings with a stop at Rs 30.
A strong move beyond Rs 40 can take the stock to the next intermediate target of Rs 46. We do not envisage a move above Rs 46 over the medium-term and a reversal below this zone can result in a sharp decline to the zone between Rs 23 and Rs 26 in that time period.
A recovery is on in the stock since March that took it to the recent peak at Rs 30.
But the movement since the second week of May as it moved from one circuit to another indicates speculative activity that can be unsustainable. Short-term investors can therefore book some profit at current levels and hold the rest of their holdings with a stop at Rs 23.Target on a break-out above the recent peak would be the area between Rs 38 and Rs 46.
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