Here are answers to readers’ queries on the performance of their stock holdings.
I had purchased KRBL shares at ₹356. Do I exit or try to sell at a little higher price?
C N Karambelkar
KRBL (₹361.7): Since encountering a key resistance in the ₹650-670 band in November 2017, the stock of KRBL has been in an intermediate-term downtrend. While trending down, it decisively breached key supports at ₹550 and ₹430 levels. However, after recording a 52-week low at ₹296 in late June 2018, it changed direction.
Following a short-term corrective up-move, the stock encountered a key resistance at ₹400 in August and started to decline. On Friday, it fell by 5 per cent with above-average volume, resuming its downtrend.
Further decline below the immediate support level of ₹350 will strengthen the downtrend and drag the stock down to ₹320 and then to ₹300 in the short term. An upward reversal from the long-term support level of ₹300 can keep the stock consolidating sideways in the wide band between ₹300 and ₹400 for a while. Nevertheless, a decisive downward breakthrough of ₹300 will strengthen the downtrend and drag the stock to ₹250 and then to ₹200 levels in the long run.
As long as the stock trades above the vital support level of ₹250, the long-term uptrend will remain in place. You can consider partly exiting the stock at current levels and re-entering at lower levels at ₹300 with a stop-loss at ₹285. Consider booking profit once the stock gives more than 25 per cent returns so that profits are not eroded, and consider reinvesting.
On the upside, an emphatic break-out of ₹400 will take the stock higher to ₹430. Next resistances are placed at ₹500 and ₹550 levels. To alter the downtrend, the stock needs to conclusively break above ₹550 levels. In such a scenario, the stock can tests next key resistances at ₹600 and ₹635 levels in the long term.
What is the outlook for the stock of Bank of India?
Brijesh Patel
Bank of India (₹86.5): The stock of Bank of India is in a downtrend across all-time frames — long, medium and short term. In November 2017, it met with a significant resistance at around ₹210 and resumed its long-term downtrend. Since then, the stock has been in an intermediate-term downtrend. It encountered resistance at ₹104 in late July and has been in short-term downtrend since then.
On Friday, the stock tumbled 4 per cent breaching a key support at ₹90 as well as its 50-day moving average. This fall has strengthened the downtrend. It has long-term support in the ₹76-80 band. A decisive fall below this base level can drag the stock to multi-year low and supports at ₹70 and ₹60 can come to play. Conversely, a strong up-move beyond ₹90 can push the stock higher to ₹104.
A break-out of this level is required to alter the short-term downtrend and take the stock higher to ₹120 and ₹135 levels. Next resistances are pegged at ₹155 and ₹170 levels.
Send your queries to techtrail@thehindu.co.in
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