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I bought Sundaram Brake Linings at Rs 255 and Bajaj Holdings at Rs 820. Can I average them now? Let me know the medium- and long-term view on these stocks. Can I ever exit these stocks with profit?
Vedavyas L. Pai
Sundaram Brake Linings (Rs 169.5): Sundaram Brake Linings is one of the stocks that has not given up too much ground in 2011. It spent the whole of last year vacillating between Rs 140 and Rs 200.
The zone between Rs 140 and Rs 170 is quite significant from a long-term perspective. As long as the stock trades above this range, there remains the chance of move higher to Rs 200, Rs 230 or Rs 285 in the months ahead.
You can consider averaging at current level with stop at Rs 130. That said, it will be best to divest your holding on a decline below Rs 125, since next target is Rs 88.
Long-term trend will turn positive only once the stock moves above Rs 280. Else the stock can remain shackled within Rs 100-300 range. Long-term target on a break-out are Rs 340 and Rs 395.
