Here are answers to readers’ queries on the performance of their stock holdings.

I have purchased DHFL at ₹305. What is the short and medium term outlook for DHFL?

Ronny Mayani

Dewan Housing Finance Corporation (₹242.7): The stock of Dewan Housing Finance Corporation (DHFL) has been on a long-term uptrend since taking support at around ₹50 in August 2013.

However, it encountered a resistance at ₹335 in October 2016 and changed direction, triggered by negative divergence in the weekly indicators. Subsequently, the stock declined sharply, breaching a key support at ₹273 in early November. The stock has been on a short-term downtrend since encountering resistance at ₹335 in October. Short-term outlook is bearish. The intermediate-term uptrend that commenced from the February 2016 low at ₹141 is now under threat.

A decisive fall below the 200-day moving average at ₹229 and an immediate support at ₹220 will mar the intermediate-term uptrend and pull the stock down to ₹190 and then to ₹175. Further decline can drag the stock down to ₹155 and ₹140 levels in the medium to long term.

The long-term uptrend of the stock will thus be under threat if it conclusively breaks its long-term support at around ₹155.

Then, it can trend downwards to ₹130 or even to ₹110 in the long run. On the upside, the stock needs to emphatically breach the key immediate resistance at ₹270 to bring back bullish momentum and take the stock higher to ₹300 and ₹335 levels.

You can consider exiting the stock in corrective rallies and re-entering at lower levels with a long-term stop-loss placed at ₹140.

I have shares of MBL Infrastructure brought at ₹129. Should I average or hold it.

Venkat Eswarlu

MBL Infrastructures (₹80.1): Ever since marking a new high at ₹329 in March 2015, the stock MBL Infrastructures, a small cap company, has been trending down. Across all-time frames — short, medium and long-term — the stock is in a downtrend.

Key resistance at around ₹115 capped the uptrend for the stock in September and early October. Subsequently, it resumed its downtrend and has been on a short-term downtrend. Outlook is bearish for the stock. It can continue its decline and test support at ₹70 and then ₹63 in the coming weeks.

Further downward can pull the stock to ₹50 and then to ₹30 in the long term. Consider exiting the stock and buying blue-chip or large cap company for a long-term investment. Significant resistances are placed at ₹100 and ₹115. Next resistances are placed at ₹130 and ₹145 levels. Strong rally above ₹200 is required to alter the long-term downtrend and take the stock higher to ₹220 and ₹250 levels in the long run.

Send your queries to techtrail@thehindu.co.in

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