I have shares of HCL Technologies. My purchase price is ₹1,236. My entire portfolio is in this stock. I am holding 12,357 shares of HCL Technologies since September 2021. What is the outlook for the stock?

Nirav Shah

HCL Technologies (₹1,308.50): First of all, please note that it is not correct to have all your investments in one specific stock. Diversification is very important. Always remember not to put all the eggs in one basket. Coming to the outlook for the stock, on the charts the long-term picture is bullish. But we would not advise you to keep your entire lot. Keep a stop-loss at ₹1,245 for 50 per cent of your holding. For the other 50 per cent, keep a stop-loss at ₹1,130. Intermediate resistance is around ₹1,400. Exit 50 per cent of your holding at ₹1,380 and move the stop-loss up to ₹1,260 for the remaining 50 per cent.

Reinvest the sale proceeds into some other stock as a part of diversification. HCL Technologies stock has potential to target ₹1,700 over the next one-two years. Move the stop-loss up to ₹1,380 when the price touches ₹1,530. Revise the stop-loss further up to ₹1,540 when HCL Technologies share price moves up to ₹1,620. Exit the share at ₹1,670. Since the outlook is bullish to target ₹1,700, you may be tempted not to exit the 50 per cent holding at ₹1,380 as mentioned above. But as a part of risk management, we would suggest you to do so.

I have 1,000 shares of Finolex Industries. My purchase price is ₹75. Shall I exit the stock and switch to Astral from the same sector? Please give your suggestion.

T Sri Krishna, Bengaluru

Let us first look at the outlook for both the stocks and see whether it is worth to switch the stock or not.

Finolex Industries (₹199.95): The long-term outlook is bullish. But within that, the short-term picture is slightly weak. The recent fall from the high of ₹259.90 made in September indicates that there is more room on the downside. Immediate resistance is around ₹230. Finolex Industries share price can fall to ₹170-160. Thereafter, a fresh leg of rally can take the share price up to ₹300-310 over the next one year or so.

Astral (₹1,932.85): The immediate outlook is mixed. There is resistance near ₹2,100. Failure to rise past this hurdle can drag the price down to ₹1,600 in the next couple of quarters. But a fall below ₹1,600 is less likely. A fresh rise from around ₹1,600 and a break above ₹2,100 can take Astral stock price up to ₹2,500. The region around ₹2,500 is a very strong trendline resistance. So, the upside in this stock could be capped at ₹2,500, as seen from the charts.

Considering the limited upside in Astral, we suggest you remain invested in Finolex Industries itself. Keep a stop-loss at ₹145. Move the stop-loss up to ₹210 when the price rises to ₹245. Revise the stop-loss further up to ₹260 when Finolex Industries share price touches ₹280. Exit the stock at ₹300.

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