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

I have shares of Piramal Enterprises purchased at ₹922, what are its future prospects?

Ishwar lal pareek

Piramal Enterprises (₹1,060.8) : The stock of Piramal Enterprises has been on a long-term uptrend since the 2009 low at ₹180. Following the rally in 2014, the stock encountered a key resistance at ₹1,000 in April 2015. This resistance level was limiting the stock's upside until this March. After multiple attempts of testing the psychological resistance level of ₹1,000, the stock eventually breached it in late March 2016 and then recorded a new high at ₹1,131.9 on April 6.

However, the stock subsequently started the decline after witnessing selling pressure. The short-term uptrend that has been in place since late February is under threat now. The stock has formed a bearish engulfing candlestick pattern in the daily chart and a shooting star pattern in the weekly chart, both depicting impending downward reversal. Therefore, you can consider booking profits at this juncture and re-entering at lower levels with a stop-loss at ₹835. Resumption of the uptrend can take the stock higher to ₹1,200 levels.

A downward reversal from current levels and a fall below the immediate support at ₹1,000 can mitigate the short-term uptrend. Then, the stock can decline to ₹920 or even to ₹850 in the ensuing months. Next supports below ₹850 are at ₹800 and ₹750.

As long as the stock trades above the significant base between ₹600 and ₹650, the long-term uptrend will remain in place. Investors with a long-term horizon can hold the stock with a stop-loss at ₹600.

I have purchased Punj Lloyd at ₹32 and Aries Agro at ₹117. What is the medium and long term outlook? Should I sell, hold or average?

Anson Joseph

Punj Lloyd (₹23.2) : The stock is in a downtrend across all time frames — long, medium and short-term. However, significant long-term support in the band between ₹20 and ₹22 has been providing base for the stock since May 2015.

Currently, the stock trades just above this support band. If you are an investor with a high risk appetite then consider averaging with a stop-loss at ₹19. An upward reversal from the base zone can take the stock higher to ₹28.5 and then to ₹33 in the medium to long term.

A strong rally above ₹40 is difficult to envisage at this juncture as the stock has a significant long-term resistance at that level which would be difficult to move past. Hence, consider exiting at this level. On the other hand, strong downward break of ₹20 can drag the stock to new lows so exit on such a fall.

Aries Agro (₹97.4): The intermediate-term downtrend in the stock of Aries Agro, that started from the January 2015 high of ₹164, came to an end in February, after recording a 52-week low at ₹63.7. Since then, the stock has been on a nascent short-term uptrend. While trending higher, the stock decisively breached key resistances at ₹75 and ₹85, which have turned into key supports now. Strengthening the uptrend, the stock has jumped 7.5 per cent with good volume last week.

However, it currently tests its 200-day moving average and faces a vital resistance ahead at ₹100. A conclusive break-out of this resistance can accelerate the stock northwards to ₹115 and then to ₹130 in the medium term. You can consider averaging the stock with a stop-loss at ₹82 and exit at ₹130 in the medium term.

Further, breach of ₹130 will alter the downtrend and take the stock higher to ₹165 in the long run. But, inability to rally above ₹100 can keep the stock moving sideways between ₹85 and ₹100 for a while.

Conversely, a strong fall below the immediate support at ₹85 can pull the stock down to ₹75 and then to ₹65. Investors with a long-term perspective can buy the stock with a stop-loss at ₹65.

Send your queries to techtrail@thehindu.co.in

Related Topics