Your Stock Portfolio. TCS in sideways consolidation phase

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

What are the near-term supports and resistances for TCS and Sun Pharma?

M Kannappan

Tata Consultancy Services (₹2,290.2): In August 2016, the stock of TCS encountered a key long-term resistance in the band between ₹2,730 and ₹2,750 and reversed lower. Since then, the stock has been on a medium-term downtrend. While trending down, it decisively breached a vital support at ₹2,425 in early September, which has subsequently turned into a key resistance for the stock. It has been on a corrective up-move after taking support at ₹2,100 in November. Investors with a high risk appetite and a long-term horizon can consider buying the stock in declines while maintaining a stop-loss at ₹2,070. Strong breakthrough of ₹2,425 can take the stock northwards to ₹2,500 and ₹2,550 . Further rally beyond ₹2,550 can target ₹2,650 and ₹2,750 over the long term. Since early 2014, the stock has been on a sideways consolidation phase in the broad range between ₹2,100 and ₹2,750. Key support below ₹2,100 is at ₹2,000.

Sun Pharmaceutical Industries (₹623.8): The 3.6 per cent fall last week breaking below the key support level of ₹650 is posing a threat to the stock’s long-term uptrend. However, one more weekly close below ₹650 is required to confirm a trend reversal. If the stock sustains below ₹650 and extends its downmove, it can test the next support at ₹570 over the medium term.

You can consider buying on declines with a long-term stop-loss at ₹550.

Strong break-out of the significant resistance at ₹730 will pave way for an up-move to ₹800 and then to ₹850 . To alter the downtrend, the stock needs to emphatically move beyond ₹880. Next targets are at ₹900 and ₹950 levels.

I am a long-term investor, have shares of WABCO India purchased at ₹5,925. What are the prospects for the stock? Should I hold them now?

Guntha Ramesh

WABCO India (₹4,886.4): After a strong rally in 2014 and 2015, WABCO India encountered resistance at around ₹7,400 in October 2015. Since then, it has been on an intermediate-term downtrend. After breaking below a key support at ₹5,300 in November, the stock breached another important support at ₹5,000 by declining 2.8 per cent last week. The stock can now test next support at ₹4,760. Further decline below this level will strengthen the downtrend and pull the stock down to ₹4,400 and ₹4,000 in the medium term.

Nevertheless, if the stock reverses higher from the immediate support level of ₹4,760, it can move up to ₹5,000 and then to ₹5,300. To alter the intermediate-term downtrend, the stock needs to conclusively breach the key resistance level of ₹6,400. Next targets are ₹6,700 and ₹7,000. You can consider averaging the stock on a strong rally above ₹5,300 with a stop-loss at the level of ₹5,150.

I have purchased Greaves Cotton at ₹137. What is the future for the stock?

Hitesh Kumar

Greaves Cotton (₹119.7): The stock of Greaves Cotton has been on a sideways consolidation phase in a wide range between ₹105 and ₹160 since August 2014. Within this range, the stock had encountered resistance at ₹146 in July 2016 and has been on a medium-term downtrend. It currently tests a key support at ₹120. A conclusive plunge below this support will strengthen the downtrend and pull the stock down to ₹115 and ₹105. A strong break below the long-term support at ₹105 will strengthen the downtrend further and drag the stock down to ₹94 and then to ₹80 in the long run.

However, a fall below ₹105 looks unlikely at this moment. You can consider averaging the stock at lower levels with a long-term stop-loss at ₹98. Strong rally beyond ₹130 is required to alter the short-term downtrend and take the stock higher to ₹140 and then to ₹146 in the medium to long term. Key resistance beyond ₹146 is at ₹155.

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