I have bought HDFC Bank shares at ₹1,700. Please suggest what I should do now.

Zafar

HDFC Bank (₹1,607): The stock spiked to a high of ₹1,791.90 in the first week of this month and has come down sharply from there. The level of ₹1,790 is a very strong trendline resistance. That leaves the short-term outlook negative for the stock. There is a danger of the stock price declining further towards ₹1,500 and even ₹1,400 from here. Intermediate support is at ₹1,550. A break below it can trigger the above-mentioned fall. From a long-term perspective, a fall beyond ₹1,400 is unlikely. A fresh rise from around ₹1,400 can take HDFC Bank share price up to ₹1,800 over the next three-four quarters.

From a multi-year perspective, the stock can breach ₹1,800 and surge to ₹2,100-2,200 eventually. You have two options. The first option is to exit the stock at current levels considering the chances of seeing more fall from here. Then you can re-enter the stock at ₹1,550 and ₹1,450. Or you continue to hold the current position but buy more at ₹1,550 and ₹1,450. In either case, keep the stop-loss at ₹1,320. Revise the stop-loss up to ₹1,550 when the price goes up to ₹1,650. Move the stop-loss further up to ₹1,700 when the price touches ₹1,780. Exit 50 per cent of your holdings at ₹1,800. Thereafter for every ₹200-move, revise your stop-loss up by ₹100. Exit the balance holdings at ₹2,100.

I have bought shares of Gujarat Ambuja Exports Ltd (GAEL) at ₹165. What is the outlook for the stock? Should I accept loss and exit, or hold? I’m ready to wait for long term.

Arjunan KM 

Gujarat Ambuja Exports (₹134.65): The stock has been in a strong downtrend since March this year. The stock made an all-time high of ₹210 in February this year and has tumbled from there. The trend is still down and there is more room to fall. However, strong supports are also coming up, which may have the potential to halt the fall. The region between ₹122 and ₹120 is a very strong support. Below that, ₹110 is the next strong support.

The downtrend can halt either around ₹120 itself or at ₹110. A strong reversal from either of those two supports will have the potential to take Gujarat Ambuja Exports share price up to ₹220 over the next four-six quarters. Since you intend to hold the stock for long term, buy more at ₹125. Keep a stop-loss at ₹105. Move the stop-loss up to ₹140 when the price goes up to ₹165. Move the stop-loss further up to ₹170 when the price touches ₹195. Exit the stock at ₹220.

I have shares of Indian Overseas Bank (IOB). My purchase price is ₹66. What is the outlook for this stock? Can I continue to hold or exit?

Swathi, Delhi

Indian Overseas Bank (₹64): The long-term picture is looking bullish for IOB. The stock has been in a strong uptrend since April last year. This uptrend is intact. Within the uptrend, the price has been consolidating sideways over the last few months. This sideways consolidation can continue for some more time. Strong support is around ₹59. Below that, ₹53 is the next important support. We expect IOB share price to sustain above ₹59 itself. Resistance is around ₹75.

A decisive break above it can take IOB share price up to ₹91 initially. A break above ₹91 will then clear the way for IOB share price to target ₹110. We suggest you hold this stock for long term. Buy more shares at ₹60. Keep a stop-loss at ₹48. Trail the stop-loss up to ₹70 when the price goes up to ₹85. Move the stop-loss further up to ₹88 when the price touches ₹98. Revise the stop-loss up to ₹95 when the share price goes up to ₹105. Exit the stock at ₹110.

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