Punj Lloyd

Investors with medium-term perspective can consider selling the stock of infrastructure player Punj Lloyd (Rs 134.6). The company operates in the oil and gas pipeline sector besides building roads and civil structure.



After encountering resistance around Rs 300 in October 2009, the stock resumed its long-term downtrend and started to decline. Since then, the stock has been on intermediate-term downtrend.

While trending down, the stock had conclusively penetrated its key supports at Rs 200 and Rs 140.

Moreover, the stock recently encountered resistance at Rs 140 and appears to have commenced a fresh leg downward.

We notice that the daily volume has been dropping since late May supporting the stock's downtrend. The daily relative strength index is declining in the neutral region towards the bearish zone, whereas the weekly RSI is featuring in the bearish zone. Further, the daily moving average convergence divergence oscillator has given a sell and is returning to negative territory. Taking into consideration that the stock's intermediate-term down trend-line is intact, we are bearish on the stock from medium-term horizon.

We believe that the stock has the potential to decline further to Rs 110 in the ensuing weeks, with minor pause around Rs 124. Investors with medium-term perspective can sell the stock, while maintaining stop-loss at Rs 146.

Oriental Hotels (Rs 334)

In line with our expectations, the stock advanced Rs 13.4 last week. We reiterate our bullish medium-term forecast on the stock. Medium-term investors who are holding the stock can continue to hold with stop-loss at Rs 280 and target of Rs 380.

via BL