Your Stock Portfolio. HCL Technologies is under pressure

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

I hold shares of HCL Technologies at ₹800. What are your views on the stock?

Anoop

HCL Technologies (₹735.1): The stock encountered a significant resistance in the band between ₹1,030 and ₹1,040 in March 2015. Since then, it has been on an intermediate-term downtrend. Although a key support at ₹800 provided a base between January and March of this year, the stock eventually broke this level in the last week of April by tumbling 11 per cent.

This fall has strengthened the downtrend and the stock breached its next key support at ₹750 thereafter. Currently, ₹750 acts as an important resistance for the stock. Resumption of the downtrend can find support at either ₹700 or ₹660 in the medium term. You can consider averaging the stock on declines with stop-loss at ₹650 levels. Strong breach of the immediate resistance level of ₹750 can push the stock higher to ₹800 in the short to medium term. However, it could face difficulty in moving past ₹800.

The next resistances will be at ₹840 and ₹885. Only an emphatic rally beyond ₹885 will alter the downtrend and take the stock higher to ₹915 and ₹950 levels in the long run.

The long-term uptrend will remain in place as long as the stock trades above ₹540. Investors with a long-term perspective can accumulate and hold the stock with a stop-loss at ₹540.

I bought ABG Shipyard shares at ₹53. What are your views for the next three years?

Mahipal M

ABG Shipyard (₹27.4): The stock of ABG Shipyard has been on a long-term downtrend ever since it faced a key long-term resistance at around ₹425 in early 2012. It decisively breached its key support at ₹220 and ₹140 in 2015, thus strengthening its downtrend.

This downtrend failed to find support at ₹62 (its 2009 low) in December 2015 and now trades at an all-time low.

However, the indicators and oscillators in the daily weekly chart are showing signs of positive divergence, which signify that a trend reversal is on the cards.

But the stock plunged 11.5 per cent last week and recorded a new 52-week low at ₹26.7. As a long-term investor, you can hold the stock and accumulate on declines with stop-loss at ₹25. There could be immediate resistance at ₹40.

A strong rally above this level can take the stock higher to ₹62 and then to ₹75 over the medium term. Further rally beyond ₹75 can take the stock to ₹100, ₹120 and ₹140 levels. Investors can consider exiting at any of these resistance levels.

I have Karur Vysya Bank shares at ₹505. What will be the target for the medium to long term?

Sadheesh Kumar

Karur Vysya Bank (₹470.5): After registering a new high at ₹618 in early March 2015, the stock reversed direction and has been on an intermediate-term downtrend.

In April 2015, it breached a significant support band between ₹500 and ₹510, which subsequently turned into a vital resistance level.

This band limited the stock’s rally thereafter. You have purchased at this resistance band and can consider averaging the stock at current levels or at the support level of ₹450, while maintaining a stop-loss at ₹435.

The stock found support at around the significant long-term support level at ₹400 this February and bounced back. Since then, it has been on a medium-term uptrend. It decisively breached the resistance at ₹450.

A strong rally above the immediate resistance at ₹480 can take the stock higher to test ₹500. Only a successful breakthrough of the resistance band between ₹500 and ₹510 will pave the way for an upmove to ₹550 and ₹565 in the long term.

Send your queries to techtrail@thehindu.co.in