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What is the medium- to long-term outlook for Reliance Infrastructure and Glodyne Technoserve Ltd?

Anil Kumar Ray

Reliance Infrastructure (Rs 428.5): The long-term downtrend that began from January 2008 peak continues to be strong in Reliance Infrastructure. The recovery in 2009 halted at the long-term resistance around Rs 1,245 and the stock is once again close to its 2009 low. Immediate support for the stock is the band between Rs 350 and Rs 360 where the stock bottomed in June 2006 and again in October 2008.

Investors should hold the stock only as long as it trades above this zone. Breach of this support will drag the stock to Rs 280 or even Rs 206. Resistances for the medium-term will be at Rs 785 and Rs 1,000. Investors with lower penchant for risk can exit at this point and consider re-entry on a close above Rs 700. Long-term view will turn positive only on a strong close above Rs 1,246.

Glodyne Technoserve (Rs 363.9): Glodyne Technoserve received a sharp set-back in last December when it fell 46 per cent in one week. The stock is currently hovering around its key long-term support at Rs 318, moving in a narrow range between Rs 260 and Rs 320. A bounce from these levels will take the stock higher to Rs 450 or Rs 560 in the months ahead. Long-term view will turn positive only on close above Rs 560, paving the way for a shy at the previous life-time peak at Rs 776.

It would be best for investors to divest their holdings on close below Rs 260. Subsequent targets are Rs 183 and Rs 115.

I bought Pantaloon Retail at Rs 300. I would like to know the future of this stock from 1-2 year perspective.

J. Kavitha

Pantaloon Retail (Rs 227): This stock is in a medium-term decline since the October 2010 peak of Rs 527. Key medium-term support for the stock exists at Rs 270. Though the stock attempted to rebound from this level in July and August, it once again collapsed below this level last week.

Investors can hold the stock with stop at Rs 215. Decline below this level will pull the stock towards the March 2009 trough at Rs 105. The medium-term trend in the stock is weak. Inability on part of the stock to move above Rs 350 implies that the stock could slide lower in the months ahead.

Strong weekly close above this resistance is required to pave the way for ascent to Rs 380 or Rs 400. Long-term view will remain under a cloud as long as the stock trades below Rs 587 and we do not envisage a move above this level in the next 12 months.

I was allotted shares of L&T Finance during its initial public offer. Can I hold the same for long-term?

J. Rajagopalan

L&T Finance Holdings (Rs 48.6): As this stock was listed only in August this year, we do not have sufficient data points to carry out technical analysis. Since the stock is trading close to its offer price, long-term investors should not have second thoughts about holding the stock. Investors with a short-term investment perspective can buy the stock in declines with stop at Rs 47.6.

What are the short- and medium-term trends in IFCI, and Edelweiss Financial Services bought at Rs 65? Can I buy some more at current levels or exit?

Mrs V Lyda

IFCI (Rs 32.1): This trading favourite has not had it easy this calendar. The stock has been on a steady decline ever since it hit the high of Rs 80 last November. The stock has critical long-term resistance at Rs 80 and the long-term view can turn positive only if the stock manages a close above this level.

The medium-term view is extremely weak since IFCI has declined below the key medium-term support at Rs 40. The stock is attempting to stabilise in the zone between Rs 30 and Rs 35. Investors should divest their holdings on a close below Rs 30. We do not advise fresh purchases at current levels.

There is an open gap between Rs 27.4 and Rs 29 on the weekly chart that can provide some succour if the stock starts caving in. If this zone is breached, next halt will be the March 2009 low of Rs 15.8. Key resistances for the medium-term would be at Rs 51 and Rs 62. Short-term resistances are at Rs 40, Rs 43 and Rs 50. Investors should consider buying the stock only on a firm close above Rs 40.

Edelweiss Financial Services (Rs 27.7): This stock never recovered from the bludgeoning it received at the hands of investors in 2008. The recovery in 2009 and 2010 could not get the stock to retrace even one-third of the decline underscoring the fact that it continues in a vicious bear-market. The trend along both short- and medium-term time-frame is down in the stock, and it is heading towards its life-time low of Rs 21.8 recorded in March 2009.

Investors who are still holding the stock can do so only as long as the stock trades above Rs 22. A rebound from there can take the stock higher to Rs 40 or Rs 50 in the months ahead. Long-term view will turn positive only on close above Rs 68.

Please give me the long-term outlook on Jindal Southwest Holdings.

Vivek Agarwal

Jindal Southwest Holdings (Rs 604.9): The bear-market that began from the peak of Rs 3,322 in January 2008, continues to be in force in Jindal Southwest Holdings.

The third leg of this bear market is unfolding since last October. Since it has breached the key support at Rs 981, there is a probability of the stock sliding lower to Rs 577, Rs 361 or even Rs 193 in the months ahead.

Investors can exit the stock at this juncture and consider re-entry on a strong close above Rs 1,200. Subsequent resistances are at Rs 1,600 and Rs 2,200.

I purchased Bharati Shipyard at Rs 190 and Jyothy Labs at Rs 210. What are the medium- and long term prospects?

S. Sankaran

Bharati Shipyard (Rs 95.9): Bharati Shipyard too is in a long-term downtrend. The stock has shattered its key medium-term support at Rs 161 and is currently hanging around the psychological support at Rs 100. The recovery from the recent low at Rs 85 is, however, not too convincing and the stock could head lower to Rs 73 or Rs 44 in the days ahead.

Investors can divest their holding at these levels and consider re-entry on a close above Rs 165. Medium-term resistances would be at Rs 200 and Rs 250. The long-term trend will turn positive only on a close above Rs 350.

Jyothy Laboratories (Rs 164.8): Jyothy Laboratories is also in a medium-term downtrend but it is yet to breach the key long-term support at Rs 150. Investors can hold the stock as long as it trades above this level. A bounce from this level can take the stock higher to Rs 220 or Rs 260 where investors with medium-term perspective can exit. Move beyond Rs 260 will pave the way for rally to the previous life-time high at Rs 322.