Technical Analysis

Colgate smiles at new high

Yoganand D | Updated on November 22, 2014 Published on October 12, 2014

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12ColgateCL.eps

12HILBW.eps

12HILCL.eps

12JkbankCL.eps

12SyndCL.eps

12pfizerCL.eps

However, indicators in the weekly charts are showing some signs of weakness







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



Request technical outlook (2 year plus) for the stock of Colgate and Pfizer.

Panini Deshpande

Colgate-Palmolive India (₹1704.1): The stock is in an uptrend across all time frames — short-, medium- and long-term. After breaching a key resistance, the stock recorded a new high recently at ₹1,767 levels.

Currently, the indicators in the weekly chart are showing signs of weakness. However, it is early to judge the direction of the price movement. Await further price action for a long-term outlook. Near-term support is at ₹1,665.

A decline below the next crucial support at ₹1,540 can drag the stock down to ₹1,450 and ₹1,350 in the medium term. Next key long-term support is placed at ₹1,200.

Pfizer (₹1601): Following an intermediate-term uptrend, the stock encountered a significant resistance at ₹1,730 in September. It is currently facing difficulty in breaching this long-term resistance level. Investors can consider taking profits off the table at this juncture.

A conclusive fall below the immediate support at ₹1,475 will have bearish implications and pull the stock down to the next key support level of ₹1,300. Further, a breakthrough of the significant long-term support at ₹1,300 can mar the intermediate-term uptrend and drag the stock down to ₹1,200 and then to ₹1,050 in the long term.

But, a strong close above ₹1,730 can push the stock higher to ₹1,800 or ₹1,824.



I hold Jammu & Kashmir Bank and HIL (formerly Hyderabad Industries Ltd). What is the medium- and long-term outlook for these stocks?

Anil

Jammu & Kashmir Bank (₹135.1): Since an early 2009 low of ₹21(post-split), the stock has been on a long-term uptrend. It has delivered good returns over the long term.

However, the stock encountered resistance around ₹199 in May 2014 and has been on a medium-term downtrend. With this it appears that one leg of the long-term uptrend has come to an end. In recent times, the stock breached a key support at around ₹145 and is nearing the next key support at ₹130. There is a possibility for the stock to breach this level too and decline to its next important support levels of ₹120 and ₹110 in the medium term.

However, there is no threat to the stock's long-term uptrend as long as it trades above ₹110. An upward reversal from key supports can take the stock higher to ₹145 and then to ₹155. An emphatic breakout of the significant resistance will strengthen the long-term uptrend and take the stock northwards to ₹188 and ₹200 in the long term.

HIL (₹636.9): The intermediate-term uptrend that began from a significant long-term support level of ₹250 in February 2014 is coming to an end, with the stock meeting with a key resistance at ₹700 last month. It struggled to surpass ₹700 and has been moving sideways in the band between ₹600 and ₹700 over the past month.

The indicators in the daily chart indicate a negative trend, and weekly indicators are featuring in the overbought levels, implying a possible trend reversal. Therefore, investors sitting on good gains can exit at current levels.

A decisive fall below ₹600 can pull the stock down to ₹490 and then to ₹420 in the medium- to long-term. A fall below ₹420 will imply that the intermediate-term uptrend has mitigated and the stock can even decline to ₹350 levels. On the hand, conclusive upward breakout of ₹700 can take the stock higher to ₹761 and then to new highs in the long-term.



Please discuss the short- to medium-term view on Syndicate Bank.

Rajesh Reddy

Syndicate Bank (₹112.3): After forming a double-top pattern in June 2014, the stock has been on a medium- to intermediate-term downtrend. The stock is now testing a significant long-term support at ₹107. The 61.8 per cent fibonacci retracement level also coincides with this support level.

A strong fall below ₹107 will reinforce the downtrend and drag the stock down to ₹90 or even to ₹80 in the medium term. Subsequent long-term support is pegged around ₹61.

To alter this bearish outlook, the stock needs to emphatically rally above the significant resistance at ₹140 to move up to ₹160 and ₹180 levels. Immediate resistance to note is at ₹130.

Send your queries to techtrail@thehindu.co.in



Here are the answers

Published on October 12, 2014

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