Please let me know the long-term trend of Alok Industries purchased at Rs 26.

Please let me know the long-term trend of Alok Industries purchased at Rs 26.

Alok Industries (Rs 29.2): Alok Industries has not yet emerged from the bear market that gripped the stock in January 2008. The stock was in a sideways range between Rs 17 and Rs 27 for an extended period from last June. This sideways move ended in June this year and the third wave of the up-move from March 2009 is in progress since then.

 
 

Simple 1:1 extrapolation of this move gives us the target of Rs 36. The stock is currently reversing lower after recording the peak of Rs 35. Investors therefore need to tread carefully at this juncture since the stock can now decline to Rs 26 or Rs 20 over the ensuing months. Investors can hold the stock as long as it trades above the first target.

Protracted sideways move between Rs 26 and Rs 36 for a few months can help the stock move higher to Rs 43 over the next 12 months. It is hard to envisage a move beyond this level just yet. Subsequent long-term targets are Rs 54 and Rs 64.