Here are answers to readers’ queries on the performance of their stock holdings.
I bought Tata Motors at ₹410. What is the medium to long-term view for the stocks? Also, provide support and resistance levels.
Nachiket Moghe
Dashesh Desai
Tata Motors (₹382.4): One leg of the stock's long-term uptrend came to an end after recording a new high at ₹605.3 in February 2015. Since then, the stock has been on an intermediate-term downtrend.
The stock's rally in the months of October and November failed to move past the key long-term resistance band between ₹430 and ₹440.
This zone houses both the 50 per cent Fibonacci retracement level of the prior downtrend and the 200-day moving average.
The stock's long-term uptrend will remain in place as long as it trades above the crucial support level of ₹310.
You can also consider averaging by buying in dips with a stop-loss at ₹300. Medium-trend is up. An emphatic breakthrough of ₹440 can pave way for this uptrend to accelerate to ₹480 over the medium term.
Further break-out of ₹480 is required to alter the stock’s intermediate-term downtrend and take it northwards to ₹540 or ₹570 in the long run. Immediate short-term supports are at ₹355 and ₹320. Additionally, investors with a long-term perspective can also buy the stock on declines with a stop-loss at ₹300.
I hold shares of Venus Remedies bought at ₹150 per share. Can you please suggest the short and medium-term outlook?
Sree Devi
Venus Remedies (₹133.3): Since its sharp fall below the key support level of ₹140 in late August, the stock has been in a medium-term sideways movement in the narrow range between ₹111 and ₹140.
The upper boundary at ₹140 is also a significant long-term resistance that has to be breached first for bullish momentum to prevail. Indicators in the weekly chart are positively biased, backing an upward break.
In such a scenario, the stock can trend upwards to ₹160 and then to ₹180 levels over the short to medium-term horizon. Hold the stock with a stop-loss at ₹120.
A strong move above ₹200 will pave way for an up move to ₹240 or even to ₹260 in the medium term.
Nevertheless, a slump below the lower boundary at ₹111 will alter the view and pull the stock down to ₹96 in the medium term.
I bought Jain Irrigation at ₹60. What are the prospects for the stock? Can it be bought at dips?
Saravana Perumaal
Jain Irrigation Systems (₹65.7): The stock found support at ₹55 in April 2015, following an intermediate-term downtrend from the peak of ₹133 recorded in November 2014. Subsequently, the stock started to consolidate sideways in a wide band between ₹55 and ₹75. Yes, you can consider buying at dips while maintaining a stop-loss at ₹53.
The stock now tests its moving average compression around ₹65 where its 21, 50 and 200-day moving averages converge. A breach of this level will strengthen the bullish momentum and set the tone for a medium-term rally to ₹75. A conclusive break-out of the upper boundary at ₹75 is needed to sustain the bullish momentum and take the stock up to ₹95 in the long term.
Failure to move above ₹75 could keep the stock moving in a sideways range. This can be cue for taking some profits off the table. But a decisive plunge below ₹55 can drag it down to ₹50 or ₹46.
Send your queries to techtrail@thehindu.co.in
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