Technical Analysis

Your Stock Portfolio

Yoganand D | Updated on March 30, 2014 Published on March 30, 2014




I purchased IDFC at ₹120. Please let me know the prospects.

N Raman

IDFC (₹125.5): After testing its key resistance at ₹115 in November and December 2013, IDFC conclusively broke out of this level last week, by gaining 13 per cent. With this, the stock has reached your purchase price.

You can consider holding the stock with a stop-loss at ₹108. After bottoming out at the August 2013 low of ₹76, the stock has been on an intermediate-term uptrend. The short-term trend is also up and the stock can rally to ₹135 in the short-term. A decisive break out of ₹135 will pave way for a medium term rally to ₹150 or ₹160.

But, failure to rally beyond ₹135 can result in a sideways move between ₹115 and ₹135. On the other hand, only a decisive fall below ₹100 will mar the stock’s intermediate-term uptrend and drag it down to ₹90 and then to ₹80.

The stock of Dishman Pharma has shed over 25 per cent since its January 2014 peak. Where do you see the near term support? Should I buy the stock at current levels, with a one-year view?

Balakrishnan V

Dishman Pharmaceuticals & Chemicals (₹82.1): Since encountering resistance at ₹110 this January, this pharma stock has been on a short-term downtrend. However, the stock took support from its key base between ₹75 and ₹78 in late January and mid-February and is hovering just above this zone. This is the near-term support zone for the stock. The stock’s 50 per cent fibonacci retracement level for the prior uptrend coincides with this zone.

An upward reversal from this support zone will be cue for buying the stock with a stop-loss at ₹72. The stock can trend upwards to ₹90 and then to ₹100 in the short to medium-term. A decisive breach of ₹100 will be mean that the stock is resuming its intermediate-term uptrend and the stock can move up to ₹110 and then to ₹122 in the next one year. However, an emphatic downward breach of ₹75 will mitigate the intermediate-term uptrend and drag the stock down to ₹65. Next key support below ₹65 is at ₹55.

Is the rally in HDIL sustainable or is the stock likely to correct?

Swamynathan S

Housing Development & Infrastructure (₹54.4): The recent rally in HDIL can be sustainable provided the stock emphatically breaks out of its key resistance at ₹55. The stock has gained 30 per cent in the month of March alone. It conclusively breached its 50- and 200-day moving averages in early March and is hovering well above them, which is a bullish sign. Strong breach of its current resistance will take the stock higher to ₹60 and then to ₹70 in the medium-term.

Conversely, a fall below its immediate support at ₹50 can pull the stock lower to ₹ 45 or to ₹40 in the short-term.

Further, decline below ₹40 will reinforce the long-term downtrend and drag the stock down to ₹32.

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Published on March 30, 2014
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