I intend to invest in shares of LIC Housing Finance. Is it advisable to invest at current levels? What are the prospects?
S. Subramanyan
LIC Housing Finance (₹365.7): The stock is in a strong long-term downtrend since 2017. The rally from the March 2020 low of ₹186 showed some sign of a reversal. But inability to sustain the break above ₹500 and a subsequent reversal from the high of ₹542, made in June last year, keeps the overall trend still down. The stock can move either up to ₹450-₹480 or fall to ₹290 and even ₹220-₹200 from current levels. ₹480-₹500 is a crucial resistance which will have to be broken to indicate bullishness. Such a break will then pave the way for a fresh rally to ₹600-₹700 levels again. At the moment you can stay out of this stock.
You have two options to buy this stock. Go for the one that happens first. One, if a fall is seen from current levels, buy in small quantity, say, 30 per cent of what you intend to invest in this stock at ₹305. Accumulate more at ₹240, another 30 per cent, and at ₹225 the balance 40 per cent. Keep a stop-loss at ₹120 and hold it for the long-term target of ₹720. Second option is that, if the stock rises from here and breaks above ₹500, you can buy with a stop-loss of ₹360 for the target of ₹720.
I hold IndiaMART InterMESH Ltd at an average cost ₹4,900. What is the outlook for this stock? Should I exit or accumulate at current levels?
G. Pratap Kumar
IndiaMART InterMESH (₹4,456.15): The stock has been in a strong downtrend since October last year. However, there is a strong long-term trend support around ₹3,900 which is holding very well for now. The stock made a low of ₹3,965 earlier in March and has been consolidating above ₹4,000. The chances are high that the current downtrend could be coming to an end. A sideways consolidation between ₹3,900 and ₹5,000 is a possibility for two-three months or even more than that. Thereafter a break above ₹5,000 will indicate a trend reversal. Such a break can take the stock up to ₹6,000 initially and then ₹7,000 eventually over the medium term. That, in turn, will open the doors to revisit ₹9,000-₹9,500 levels over the long term i.e., in the next one-two years.
You can accumulate the stock now and also on dips at ₹4,100. Assuming that you are a long-term investor, keep a stop-loss ₹3,100 and hold it for the target of ₹9,200. Revise the stop-loss up to ₹5,300 as soon as the stock moves above ₹6,200. Move the stop-loss further up to ₹6,700 as soon as the stock touches ₹7,700. Only a decisive monthly close below ₹3,900 will negate the above-mentioned bullish view. In that case, the danger of the stock tumbling to ₹3,000 and even lower levels will increase.
I have purchased shares of Glenmark Life Sciences and my average purchase price is about ₹710. The share price has been continuously decreasing. What is the outlook? Should I continue to hold or sell?
Dr. Anant Kanuga
Glenmark Life Sciences (₹492.6): The stock has been falling consistently ever since it got listed in August 2021. Although it has bounced well from the low of ₹376 made earlier in March this year, the trend still remains down.
The region between ₹550 and ₹570 is a strong resistance zone. The stock will have to rise past ₹570 decisively to become bullish. But there is no strong sign of that happening as seen from the charts. It might even take a very long time before breaking out of ₹570, if a breakout were to happen. So, you can sell and book loss on this stock at current levels. You can consider investing the sale proceeds of this stock in IndiaMart InterMESH as mentioned above.