I have holdings in Reliance Natural Resources, Reliance Petroleum, Reliance Communications, Ispat Industries and GMR Infrastructure in the futures. Can I hold on to them? How are they likely to fare in 2008?
Answering your last question first, all the stocks mentioned are likely to do well. But in the case of derivative contracts, short-term performance is more relevant. Since last week, a lot has changed in the markets. But I think Reliance Natural Resources Ltd and Reliance Petroleum Ltd do not have big downsides at current levels. Reliance Natural Resources has a stop-loss of Rs187 and target of Rs239. Reliance Petroleum has and has a strong support at Rs189. Under normal circumstances, the stock is not likely to move below this support level, while it has a target of Rs258. Reliance Communications Ltd has fallen sharply in line with the general market trend, but technically it has the potential to bounce back equally sharply. The stock has a strong support at Rs670 and a target of Rs772. Ispat Industries has also fallen in line with the general market trend and is now trading at around Rs60. It has a strong support at Rs51.50 and a target of Rs74. Regarding GMR Infrastructure Ltd, the stock has a strong support level at Rs190 and a good resistance at Rs222. If the stock closes above Rs221, then you may see some good upward move in the short term.
Should we sell the shares in Bank of India now?
Bank of India witnessed a sharp rally in the recent past and hit a high of Rs465. However, the stock fell in line with the market during the last week, but bounced back as sharply. In view of the US Federal Reserve meeting on 29-30 January and the Reserve Bank of India’s (RBI) credit policy review, I expect a lot of action in banking stocks. Technically also, bank stocks in general and Bank of India in particular are looking strong. You may continue to hold this stock for another three months for decent returns. If you are a short-term investor, you should wait at least until next week and then take a fresh call after watching the impact of further Fed actions and RBI’s views and recommendations.
I am a long-term mutual fund investor, now interested in the stock market and have read in your column that new investors should invest through IPOs. Where does one purchase shares? Should I open an account with ICICI Bank?
For investing in initial public offerings (IPOs), the best way is to apply online, as it is very simple and hassle-free. For this, however, you need to have an online account with a broker or bank. The example of ICICI Bank is a good one as it offers you a triple account—a bank account, demat account and trading account. You can apply for IPOs online and can even sell it yourself, if you get them allotted. As per the conventional method, you need to fill up the IPO form—which is readily available at many places, including banks and post offices—with the necessary application money (through cheque or demand draft) and quote your demat number. There is no complication involved either way as it is a very simple process.
Answers are based on a technical analysis of the markets and individual stocks. The views expressed on this page are not the newspaper’s opinion and are provided for information purposes by Vipul Verma. Readers are requested to do their own research before participating in the stock markets. Neither the paper nor the information provider will be responsible for any outcome based on the information provided here.