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I am holding shares of Vikas WSP purchased at Rs 11. What is the outlook for this company? Should I exit this stock?

Suresh Kumar

Vikas WSP (Rs 66.6): After taking support at around Rs 10 in December 2011, the stock reversed direction and started moving higher. Jumping from circuit limits to circuit limits, the stock penetrated its long-term resistance at Rs 36 in early March and accelerated until it encountered resistance at Rs 70.

The stock is likely to test this resistance in the near future. Its weekly as well as monthly indicators are hovering in the overbought territory signalling a potential short-term corrective decline.

The stock had reversed down from Rs 70 in early 2008 also. Therefore, we advise you to exit from the stock and take profits off the table at this juncture.

A downward reversal can pull the stock down to Rs 50 and then to Rs 36 in the medium-term.

Further fall below Rs 36 will mar the stock's medium-term uptrend and pull it down to Rs 25 or Rs 20. Conversely, breakthrough of the immediate resistance at Rs 70 can push the stock higher to Rs 85 or to Rs 95 in the medium-term.