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Here are answers to readers’ queries on the performance of their stock holdings.
I purchased shares of HEG in the ₹3,500-4,000 range. What are the targets for the short, medium and long term. Also, should I book losses now?
Bhaskar Parab, Prakash Rao, Shrihari Kulkarni
HEG (₹1038.7): Ever since recording a new high at ₹4,950 in October 2018, the stock of HEG has been in a long-term downtrend, forming lower peaks and troughs. While trending down, it emphatically breached key supports at ₹2,500 and ₹1600. The stock recorded a 52-week low at ₹915 and found support last week.
Subsequently, it began to move up and surged 8.4 per cent on Friday, breaking above a key immediate resistance at ₹1,000. There has been an increase in weekly volume over the past three weeks. The indicators in the daily chart are recovering from the oversold territory, whereas the weekly indicators continue to feature in the oversold territory.
The weekly relative strength index is displaying a prolonged positive divergence, indicating that a potential trend reversal is on the cards. Therefore, investors with a long-term perspective can consider buying in small quantity with a stop-loss at ₹900.
You can consider averaging the stock in declines with a stop-loss at ₹900. An emphatic break above the immediate resistance level of ₹1,260 can take the stock up to ₹1,530. A further rally beyond this barrier can push the stock northwards to ₹2,000 over the medium term. That said, to alter the medium-term downtrend, the stock needs to decisively move beyond ₹2,000. Subsequent key resistances are at ₹2,300 and ₹2,600 levels.
Only a strong rally above ₹3,200 will change the long-term downtrend and take the stock up to ₹3,600 and ₹4,000 in the long run. On the other hand, failure to move beyond ₹2,000 will keep the stock consolidating sideways in the wide range between ₹915 and ₹2,000 for the medium term. Key supports are at ₹1,000 and ₹915. A conclusive fall below ₹915 will strengthen the downtrend and drag the stock lower to ₹880 and then to ₹550 levels.
Send your queries to techtrail@thehindu.co.in
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