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Can I buy Punj Lloyd at current price? I can wait for three years from now on. Please advise.

Ramachandra

Punj Lloyd (Rs 55): Punj Lloyd is in the bear's stranglehold since January 2008. The stock hit a life-time low at Rs 37 in December 2011, and is currently in a nascent uptrend. This rally has not progressed sufficiently to infuse confidence.

The stock is likely to face resistance at Rs 77 and Rs 100 in the months ahead. The stock needs to move above Rs 100 to indicate that a sustainable medium-term uptrend is in progress.

Investors with a low risk-appetite can, therefore, wait for a strong weekly close above Rs 100 before buying the stock. The more adventurous can accumulate the stock at current levels with stop at Rs 40.

The stock faces strong long-term resistance at Rs 200 and then at Rs 250. It is quite likely that the stock vacillates in the range between Rs 50 and Rs 250 over the next couple of years.