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I bought shares of Berger Paints at Rs 195 and M&M Financial at Rs 197. Please advise me on the prospects of these stocks.
Arjun Agarwal
Berger Paints India (Rs 195.5): Berger Paints etches a very pretty picture on the weekly chart as the stock is in a very steady long-term uptrend since 2009. The corrections within this uptrend have been shallow reflecting the inherent strength in the stock. The stock is moving in a range between Rs 186 and Rs 215 over the last five weeks.
The pattern on the weekly chart appears to be a wedge that is mostly a consolidation pattern. Investors with short- to medium-term horizon can hold the stock as long as it trades above Rs 182.
The stock can also be purchased in declines with the same stop-loss. Medium-term target on a break above Rs 200 is Rs 232. Decline below Rs 180 can pull the stock down Rs 166. This is the trend deciding level from a long-term perspective.
Mahindra & Mahindra Financial Services (Rs 194.2): This stock is also sliding lower since the beginning of this calendar and is down around 19 per cent from its January peak. That said, the Mahindra & Mahindra Financial Services is halting at Rs 180 that occurs at 50 per cent retracement of the rally from June 2012 trough. Next retracement support level occurs at Rs 167 and you can hold the stock as long as it trades above this level.
Near-term outlook will be marred only on a close below Rs 167, paving the way for further decline to the zone around Rs 120. Rallies will face hurdle around Rs 245 and investors who are not in the stock for the long haul can sell the stock at that level.
Target on a strong move beyond Rs 245 is Rs 257 and Rs 305.
Please let me know the prospects of Aditya Birla Nuvo and Cairn India for short- to medium-term investment.
Anil, Meghna
Aditya Birla Nuvo (Rs 978.8): Buying Aditya Birla Nuvo at this juncture can prove to be a trifle risky from a medium-term perspective. The stock is reversing lower after testing a very significant long-term resistance around Rs 1,200. Current decline can drag the stock down to Rs 860 or Rs 660 in the months ahead.
Short-term support for the stock is at Rs 920. Investors with a short or medium-term investment horizon can purchase the stock on upward reversal from either Rs 920 or Rs 860. The long-term view for the stock will turn negative only on close below this level.
Cairn India (Rs 272.1): Cairn India is in a severe decline since the peak of Rs 400 recorded in February 2012. This correction has pulled the stock 32 per cent from its peak. The quantum of pullback suffices to enable us to label this decline as a long-term corrective move. The stock is also drawing close to the trough of Rs 250 formed in August 2011.
Both medium- as well as long-term investors should stay alert in the zone between Rs 240 and Rs 260.
A long-term trough is possible here as it coincides with the 50 per cent retracement of the rally from 2009. If the stock declines below Rs 240, next support would be available at Rs 208.
Medium-term resistances will be at Rs 320 and Rs 350. The area around Rs 400 will continue to act as a long-term ceiling for at least another year.
Please share your view on Adani Enterprises.
Jayarami Reddy G.
Adani Enterprises (Rs 201.9): This stock is in a vicious downward spiral that has erased almost all the gains made in 2009 and 2010. Bottom fishing is not advisable on this counter as it has to cover a lot of ground before the view turns positive for it. Short-term resistances for the stock are placed at Rs 297 and Rs 340.
Investors holding this stock should try to exit around these levels. Key medium-term hurdle is in the zone between Rs 400 and Rs 450. Investors should consider buying this stock only if it manages to move above Rs 450.
Current decline can attempt to halt around Rs 150 or Rs 120. Investors with a greater penchant for risk can purchase the stock at these levels with stop-loss placed 5 per cent below purchasing price.
What is the outlook for Asahi Songwon?
Himanshu
Asahi Songwon (Rs 58.90): This stock is in a long-term downtrend since July 2011. A fresh leg of this down-move began from October 2012 that has pulled the stock close to its critical long-term support at Rs 57.
Long-term investors can hold the stock as long as it trades above Rs 50.
The stock can also be bought at current levels with the same stop loss.
Rebound from here can pull the stock up to Rs 85 or Rs 100 in the next 12 months. Investors with a medium-term perspective can exit the stock at either of these levels.
Long-term view will turn positive only on close above Rs 100. Next target is the previous peak at Rs 130.
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