I have purchased the shares of Punjab National Bank. Kindly let me know the short and long-term prospects of these stocks. Parrivel, Madhu Gupta

Punjab National Bank (Rs 440.4): The long-term movement of this stock since October 2004 can be confined within an upward-moving trend channel.

This upward bias is a positive factor from a long-term perspective and the structural up-trend in this stock will be threatened only on a weekly close below Rs 370.

The stock is currently reversing from this key long-term support. Subsequent long-term support for the stock is present at Rs 300. Long-term investors should divest their holdings in this stock only on a breach of Rs 300.

Investors with a short-term perspective can hold the stock with a stop at Rs 330. The current up-trend can take the stock higher towards Rs 456 or Rs 484. Profit should be booked on short-term holdings on a failure to move above the first resistance. A range-bound move between Rs 300 and Rs 480 is likely over the ensuing months.

I purchased MRPL at Rs 50. What is the outlook for this stock? Venugopal

Mangalore Refinery and Petrochemicals (Rs 52.2): MRPL had never moved beyond Rs 70 prior to 2007. The stock reversed from this level in 1994 and then declined steadily to form the trough at Rs 4.7 in 2001. The recovery from here was once again halted at this resistance in 2004 and the stock meandered sideways since then until the sharp break-out in the last quarter of 2007 that took the stock to Rs 149 by January 2008.

It can be safely presumed that the move to Rs 149 was induced by the excesses in the final stages of the 4-year old bull market from 2003.

The long-term range for the stock is between Rs 30 and Rs 63. MRPL is once poised in the middle of this range and a move towards the lower boundary is possible over the medium term. Key resistance in the ensuing year would be at Rs 65. Investors holding the stock can divest their holdings on a reversal from here.

I was allotted shares of Transformers and Rectifiers shares in IPO at Rs 465. Please comment on the 6 to 18 month view for this stock. Indu Garg

Transformers and Rectifiers (Rs 276.5): Initial Public Offerings that list towards the end of the bull market tend to record patters similar to the one observed in Transformers and Rectifiers. The stock recorded a high of Rs 938 only three days after listing in January and has since tumbled head-long to Rs 250 by July 2. It is difficult to gauge the subsequent support for the stock due to the limited trading history. Investors can hold the stock with a stop below the recent trough at Rs 250. Significant resistances would be at Rs 475 and then Rs 515. The medium-term view will turn positive only on a close above the second resistance.

Please advise the outlook of Areva T&D purchased at Rs 2,000 and Circuit Systems purchased at Rs 30. M Garg

Areva T&D India (Rs 1,470.5): In our previous review of this stock in February, we had identified the key long-term support for Areva T&D at Rs 1,260.

We stay with the view that long-term outlook for the stock stays positive as long as this level holds. The stock made a double bottom at Rs 1,200 recently and is trying to start a short-term rally.

The next long-term support for the stock is at the March 2007 trough at Rs 960. It is possible that the stock declines to this level over the next three months as it builds a base between Rs 1,000 and Rs 1,800.

Long-term investors can watch for buying opportunity in the band between Rs 1,000 and Rs 1,200. Resistances over the next one year would be at Rs 1,800 and Rs 2,000. Investors with a shorter horizon can divest their holdings on rallies to these levels. The medium-term outlook will turn positive only on two consecutive weekly closes above Rs 2,000.

Circuit Systems (Rs 16.9): This stock is currently trading close to its all time low at Rs 15. It is not possible to gauge where the stock would finally bottom. We recommend a switch from this stock at current levels.

I am holding shares of Tata Motors and Moser Baer purchased at Rs 400 and Rs 114 respectively. Let me know the future prospects of these stocks. Raheja V K

Tata Motors (Rs 420.2): In our previous review of this stock a couple of months back, we had lauded the fact that Tata Motors was holding above the long-term support at Rs 630. Though we had anticipated a re-test of the January low at Rs 535, the slide to Rs 400 was definitely not on our radar.

The steep decline since our last review has dragged the stock from Rs 695 to Rs 374. This move has resulted in a retracement of more than 61.8 per cent of the gains recorded since 2001. Tata Motors has also got key support in the band between Rs 380 and Rs 400 from where it reversed in June 2004 and again in April 2005. A long-term trough is possible around the current levels. However, investors should sell the stock on a move below Rs 380 since the next significant support is a long way away at Rs 175.

Short-term resistances would be experiences at Rs 500 and then at Rs 575. The negative bias for the short-term will be mitigated only on a move above the second resistance.

Moser Baer (Rs 90.2): The structural trend has turned explicitly negative in Moser Baer. The steep decline since June has taken the stock below the support zone between Rs 100 and Rs 110 from where it had reversed in May and November 2004 and again in June 2006. The next support on the charts is at Rs 75 but a decline all the way back to the 2003 trough at Rs 46 can not be ruled out.

Though you have purchased the stock near the key support at Rs 110, the penetration of this level has put the stock in a precarious position. A switch is recommended from the stock at current levels. Re-entry can be considered on a close above Rs 120.

Tamilnadu Newsprint and Papers (Rs 90.0): TNPL is in a down-trend since the peak at Rs 147 recorded this January. Though the long-term trend line has been penetrated, the stock is likely to find support at Rs 80. This level has not been breached since 2005. Since the stock has been in a wide range between Rs 80 and 140 over the last four years, it could rally back to Rs 110 or Rs 140 over the long-term. But investors who have bought the stock at lower levels should book some profit the next time the stock moves above Rs 110.

Neyveli Lignite Corporation (Rs 101.7): The last time we reviewed this stock was in December 2007 when we had expected the rally to extend up to Rs 330.

But the stock peaked at Rs 274 in January this year and launched in to a vertical descent. The tower formation between October 2007 and January this year is the hallmark of stocks that have been pulled higher by speculative frenzy.

Interestingly, the long-term trend continues to be up in this stock and this view will be negated only on a close below Rs 78. Now that the froth has been removed, Neyveli Lignite can return to its long term trading range between Rs 50 and Rs 90. It would be best to wait for the stock to decline to the trend-line at Rs 78 or further to the floor of the long-term range at Rs 50 before buying this stock.

I am holding 3i Infotech bought at Rs 150. Please tell me whether I should book loss in this share or switch. N S Ganesan

3i Infotech (Rs 94.1): The medium term recovery that began at the March trough at Rs 84 has reversed from Rs 136 and the stock is once again nearing the Rs 80-level. Though the near-term outlook for the stock is negative, it can find support in the zone between Rs 80 and Rs 90 and move higher towards Rs 115 or Rs 135 again.

Investors can hold the stock with a stop at Rs 80 and divest their holdings on rallies to these levels. The supports below Rs 80 are at Rs 68 and then Rs 55.

— Lokeshwarri S.K.