Your Stock Portfolio. Reliance Communications on a strong rally

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

I hold shares of Reliance Communications bought at ₹133 and Batliboi at ₹43. Should I hold, sell or accumulate?

Varadarajan K

Reliance Communications (₹90.5): The stock of Reliance Communications plunged below ₹50 in August 2015 and revisited the level recorded in August 2012. After registering an all-time low at ₹45.6, the stock changed direction.

Since then, the stock has been on a medium-term uptrend. It decisively breached the key resistance at around ₹84 and moved out of a broad sideways consolidation range between ₹55 and ₹84 in late December.

Last week, the stock surged almost 5 per cent, extending its medium-term uptrend. The short-term trend is also up for the stock.

The indicators on the daily and weekly charts feature in the bullish zone, backing the stock’s progressing uptrend. Its medium-term uptrend is intact.

The stock trades well above its 50- and 200-day moving averages. Any decline in price can find support at ₹84 or ₹75 in the short term. You can consider averaging the stock on such declines with a stop-loss at ₹70.

A conclusive breakthrough of the psychological resistance level of ₹100 can pave the way for an upmove to ₹115 and then to ₹135 or ₹150 in the medium to long term.

Envisaging a move beyond ₹150 is tough at this juncture. Therefore, consider exiting the stock in the band between ₹135 and ₹150 in the long run.

Batliboi (₹28): The stock met with resistance at ₹38 in August 2014 and started to decline. However, it found support at around ₹17.5 in early March 2015 and began to consolidate sideways in a the ₹17.5-₹32 range. You can consider averaging the stock on declines, while maintaining a stop-loss at ₹17.5.

A strong rally above ₹32 can take the stock northwards to ₹40, a key long-term resistance level. As the stock may face difficulty in rallying above the long-term resistance level, you can exit at around ₹40.

On the other hand, an emphatic fall below the significant support at ₹17.5 can bring back selling pressure and drag the stock down to ₹13 or even to ₹10 in the same time period.

In such a scenario, you can exit and switch to a blue-chip stock.

What is the outlook for Simplex Infrastructures bought at ₹450. Should I sell or hold?

AK Rakshit

Simplex Infrastructures (₹321.3): After bottoming out at ₹40 in August 2013, the stock of Simplex Infrastructures has been on a long-term uptrend. However, after encountering resistance at ₹485 in March 2015, the stock started to decline and has been on an intermediate-term downtrend.

The long-term uptrend will be in place as long as the stock trades above the significant support band between ₹250 and ₹260. Investors with a long-term perspective can hold the stock with a stop-loss at ₹250.

In the short term, the stock will move in a sideways range between ₹305 and ₹360. A fall below ₹305 will provide an opportunity to accumulate the stock, with stop-loss at ₹250.

An upward break of ₹360 can take the stock northwards to ₹400 in the short to medium term. A strong rally above ₹400 will imply continuation of the uptrend and take the stock higher to the long-term targets of ₹450 and ₹485 levels.

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