Technical Analysis

Adani Ports faces rough weather

Yoganand D | Updated on July 27, 2014 Published on July 27, 2014

27AdaniCL.eps

27AnsalCL.eps

27HimCL.eps

27IDFCCL.eps

27ILFSINvCL.eps

27RoltaCL.eps

The indicators in the daily and weekly charts signal a trend reversal



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

I am a long-term investor in Adani Ports. Can I accumulate more shares or should I book profit at current levels?

Y Suneeta

Adani Ports and SEZ (₹268.2): The stock recorded a new high of ₹294 last week and started to decline. It fell almost 7 per cent forming a bearish reversal pattern on the candlestick chart. Moreover, the daily as well as weekly indicators are displaying negative divergence, implying trend reversal.

Therefore, wait for the correction to pause at either ₹250 or ₹230. An upward reversal from these levels can take the stock higher to ₹280 and ₹294 in the medium term.

Buy at declines with a stop-loss at ₹225. Since the January low of ₹141, the stock has been on an intermediate-term uptrend. This trend will be intact as long as the stock trades above ₹210.

A fall below this level will mar the uptrend and drag the stock down to ₹200 and ₹185 levels.

Can I accumulate shares of IDFC for the long term?

K Ramkumar

IDFC (₹154.9): Since the August 2013 low of ₹76, the stock has been on an intermediate-term uptrend. But it faced a key resistance at ₹165 last week, and began to fall. You can accumulate the stock at key supports — ₹135 and then at ₹110 levels.

A decisive fall below ₹110 will mar the stock's intermediate-term uptrend and drag it down to ₹90 or even to ₹76 levels in the long term. On the upside, conclusive breach of ₹165 can take the stock higher to ₹185 and then to ₹200. Long-term targets are ₹215 and ₹235.

I hold Rolta and Himachal Futuristic Communications (HFCL). What is their future outlook?

Randhir Chaudhry

Rolta India (₹107): Following a sharp rally this May, the stock encountered resistance at ₹115 and started moving sideways with a negative bias.

A conclusive fall below the immediate key support level of ₹103 can take the stock lower to ₹90 and then to ₹80 in the medium term. Further decline below ₹80 will mar the stock's intermediate-term uptrend and drag it down to ₹65 or even to ₹50 in the long term.

An emphatic rally above ₹115 is needed to reinforce the stock’s bullish momentum and take it higher to its next resistance levels of ₹135, ₹150 and ₹165 in the medium- to long-term.

Himachal Futuristic Communications (₹15.3): The stock's long-term downtrend that started from the 2008 peak of ₹62 is still intact. The rallies in 2011 and May-June 2014 failed to breach the long-term resistance level of ₹20.

The stock is now in a short-term downtrend. Its daily volumes are declining implying weakness.

A strong dive below ₹14.7 will drag the stock down to ₹12.5 and then to ₹10.2 in the long term. Next supports are at ₹7.2 and ₹6, which will come to play if the stock declines below ₹10.2.

The stock needs to conclusively break its significant long-term barriers at ₹20 and ₹30 alter its long-term downtrend before trending higher to ₹40.

I purchased IL&FS Investment Managers at ₹25.8. What are its prospects?

Hitesh Dumaswala

IL&FS Investment Managers (₹26.8): After a strong rally in May and early June this year, the stock encountered resistance in the zone between ₹26.7 and ₹27.5 and started consolidating sideways. You have purchased the stock at this level and hence can exit. Further, the stock is testing this key long-term resistance band, and a downward reversal from here can drag it down to ₹23.

The stock’s weekly indicators signal a possibility of a conclusive breakthrough of ₹23. In such a scenario, the stock can decline to ₹20 and then to ₹16 in the medium- to long-term. Nevertheless, an emphatic breakout of ₹27.5 can take the stock higher to ₹30 and ₹32 levels.

Advise me on the future trends of Ansal Housing bought at ₹30.

Guru Madgeri

Ansal Housing & Construction (₹30.4): Early this June, the stock met with a key resistance at ₹32 and has been unable to surpass it.

Last week, it began to trend lower from this resistance level after witnessing selling pressure. Exit the stock at the current levels and switch to blue-chip stocks.

A decline below ₹27.5 can drag the stock down to ₹23. Next important support for the stock is pegged at ₹19. Only a decisive breach above ₹32 can take the stock higher to ₹40 in the long term.

Send your queries to techtrail@thehindu.co.in

Published on July 27, 2014
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