Sizzling Stocks

Pantaloon Retail (Rs 145.9)

The stock plummeted 17.5 per cent, breaking through a key support at Rs 170 in the previous week. It has resumed its medium-term downtrend that has been in place from its January peak of Rs 275. The stock is hovering well below its 50- and 200-day moving averages. However, the daily indicators feature in the oversold levels, implying that a near-term corrective up-move in the stock price is in the offing.

Moreover, the stock has breached the lower boundary of the daily Bollinger Bands, indicating it is oversold. An upward reversal from current levels can encounter important resistances at Rs 170 and Rs 188.

The stock needs to rally above Rs 220 to alter its medium-term downtrend and take the stock higher to Rs 240 or to Rs 265 in the medium term.

On the downside, the stock has significant long-term support at Rs 130. Conclusive decline below this support will reinforce the stock’s long-term downtrend and the stock may fall to Rs 110 or even to Rs 100 in the medium term.

Reliance Communications (Rs 54)

Last week, the stock nose-dived almost 19 per cent with good volumes. It has broken an important support at around Rs 60. Since its January 2013 peak of Rs 91, the stock has been on a medium-term downtrend. Short-term trend is also down. The stock is testing key support at Rs 53.5 and has breached the lower boundary of the daily Bollinger Bands, implying it is oversold. A small up-move can encounter resistance at Rs 57 or Rs 59 and subsequently, the stock can resume its primary downtrend. Continuation of the stock’s downtrend and an emphatic decline below Rs 53.5 will pull the stock down to Rs 50 and then to Rs 46 in the medium term. Important resistance levels above Rs 59 are at Rs 65 and Rs 77. The stock needs to move above Rs 77 to reverse its medium-term downtrend and take it upwards to Rs 83 or to Rs 90.

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