I hold shares of ITC. My purchase price is ₹256. Should I continue to hold or book profits now?

T Selvam, Kanyakumari

ITC (₹388.05): Your time of entry into this stock is very good. Many would not have spotted the buying opportunity at that time. Indeed, in our Investment Focus column in the bl.portfolio edition in May 2022, we had also given a buy recommendation in ITC at a price of ₹266. However, we had recommended to exit at ₹360, spotting a key resistance at ₹370. Now, the price has risen well above this resistance. The trend is still up and strong for the stock of ITC.

There is still room left on the upside from a long-term perspective. So, you can continue to hold the stock. However, what is very important now is that you must protect your profit. Supports are at ₹368, ₹345 and ₹330. For 30 per cent of your holding, keep a stop-loss at ₹355 for now. For the remaining 70 per cent holding, have a stop-loss at ₹310. ITC share price has potential to target ₹480-500 over the next one year or two. Move the stop-loss up to ₹365 for your entire positions when the price rallies to ₹430. Move the stop-loss further up to ₹440 when the price touches ₹470. Exit the shares at ₹495.

I have beenholding shares of ICICI Bank for the last three years. What is the long-term outlook? Can I continue to hold or exit and switch to some other stock?

Alex

ICICI Bank (₹842.80):The trend has been up since April 2020. Very strong and crucial supports are at ₹805 and ₹795. As long as ICICI Bank trades above ₹795, the overall uptrend will remain intact. So, you don’t have to exit the stock now unless a fall below ₹795 is seen. You have not mentioned your actual buy price. But since you have mentioned that you bought the shares three years ago, we assume that you would have bought it at a lower price.

So, protect your profit by keeping a stop-loss at ₹780 and continue to hold the stock. ICICI Bank share price has the potential to rally towards ₹1,100-1,200 by this year-end or in the first half of 2024. Move the stop-loss up to ₹930 when the stock touches ₹1,020. Move the stop-loss further up to ₹1,060 when ICICI Bank rallies to ₹1,095. Exit at ₹1,140.

I have purchased shares of Bajaj Finance at an average price of ₹7,008. What is the outlook? I can wait for more time to avoid losses. 

Krishna Hegde

Bajaj Finance (₹5,873.20): The short-term outlook is not looking positive for the stock of Bajaj Finance. Strong resistance is in the ₹6,600-6,800 region. Immediate support is around ₹5,750. A break below it can drag the share price of Bajaj Finance down towards ₹5,200 and even ₹5,000 in the coming weeks. To avoid this fall, the stock has to sustain above ₹5,750 and then rise past ₹6,800. That will ease the downside pressure. However, to become convincingly bullish, Bajaj Finance has to breach ₹7,600 decisively. Only in that case, the stock will become strong for a rally to ₹10,000. 

Even if that happens, it might take a long time. From the charts, we see high chances for a fall to ₹5,200-5,000 first and then see a reversal. So, it is better to exit the stock with a loss at current levels rather than waiting for the price to rise. You can consider reinvesting the sale proceeds of this stock into ICICI Bank explained in the previous query. Follow the same strategy.

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