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Here are answers to readers’ queries on the performance of their stock holdings.
I bought shares of Jubilant Life Sciences and HSIL at ₹658 and ₹378, respectively. Should I average my cost by buying at the current prices. What are the long-term prospects for these stocks?
Rajeev Kumar
Jubilant Life Sciences (₹447.2): The stock of Jubilant Life Sciences has been in a medium-term downtrend since encountering a key resistance at around ₹900 this March.
It breached a key support at ₹625 in May and witnessed a sharp fall, resuming the intermediate-term downtrend that has been in place since registering a new high at ₹1,039 in February 2018.
Short-term trend is also down. But the stock appears to have found support at the long-term base in the band between ₹410 and ₹425 recently.
The stock is currently poised above this long-term support band.
The weekly relative strength index and the price rate of change indicators display positive divergence, which implies trend reversal on the cards.
With the stock hovering at a key long-term support and the indicators projecting a trend reversal, a short-term rally is possible in the stock now.
You can consider averaging the stock with a stop-loss at ₹410.
A strong break above the immediate resistance level of ₹500 will alter the short-term downtrend and take the stock up to ₹550 and ₹600 levels in the medium term.
The significant long-term resistance is in the ₹625-650 band.
An emphatic break above this barrier will alter the medium-term downtrend and take the stock up to ₹700.
Subsequent vital resistance is at ₹750 and ₹800. Inability to move beyond ₹650 will be cue for booking partial profits.
On the downside, a decisive tumble below ₹410 will reinforce the downtrend and drag the stock to ₹380 and ₹350 levels.
A further fall below ₹350 will pull it down to ₹300.
In such a scenario, avoid taking fresh positions and average at lower levels.
HSIL (₹234.5): The stock of HSIL gained 4 per cent on Friday and managed to close above the 21-day moving average.
Although the stock is in a downtrend across all-time frames, there are signs of short-term trend reversal.
The daily relative strength index shows positive divergence and has entered the neutral region from the bearish zone.
Key support provides base at ₹210. Nevertheless, the stock faces a crucial resistance at ₹250.
A conclusive break above this level will take the stock up to ₹270 and ₹300. Consider averaging in declines with a stop-loss at ₹190 and book partial profits at ₹300.
An emphatic break above the long-term barrier at ₹300 is needed to alter the medium-term downtrend and take the stock up to ₹325 and ₹350 levels.
Send your queries to techtrail@thehindu.co.in
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