Here are answers to readers’ queries on the performance of their stock holdings
I have shares of Adani Ports bought at ₹294 and Coal India at ₹353. Should I buy more to average my price or sell and book loss.
After four years (2010-13) of sideways consolidation, the stock breached the upper boundary at ₹170 in early 2014. The stock then witnessed a strong rally in 2014 and mid-2015. But after registering an all-time high at ₹374 last August, it started to decline.
This downtrend found support at ₹170 in February and changed direction. However, after retracing the 38.2 fibonacci retracement level of prior downtrend, the stock encountered key resistance at ₹250 in early April. Since then, the stock has been on a short-term downtrend. It breached the 21 and 50-day moving averages and trades well below them.
The stock currently tests a support at ₹195. A fall below this level can find support at ₹180 and then at ₹170, which is a significant long-term base. You can consider averaging the stock in these declines with a stop-loss at ₹165. An upward reversal for the supports mentioned above can take the stock upwards to ₹210 and ₹220 levels.
Further move above this level can take the stock higher to the key resistance level at ₹250 in the medium term.
Conclusive breakthrough of ₹250 will strengthen the uptrend. Strong rally above ₹270 will alter the downtrend and take the stock higher to ₹300 in the long run. Key supports below ₹170 are at ₹155 and ₹145.
Coal India (₹281.9): Since recording a new high at ₹447 in August 2015, the stock of Coal India has been on an intermediate-term downtrend. The medium-term trend is down for the stock. But over the short term, it is in a sideways trading range between ₹272 and ₹290.
The stock has a key immediate support in the band between ₹270 and ₹272. A strong break below this base will strengthen the downtrend and drag the stock down to ₹250 and then to ₹240 in the medium term.
However, the stock has a significant long-term support in the ₹240-250 zone, which can arrest the stock's decline. You can consider averaging the stock on declines with a stop-loss at ₹240. An emphatic breach of the immediate resistances at ₹290 and ₹300 will reinforce short-term bullish momentum in the stock. Next resistances above ₹300 are at ₹320 and ₹340.
To alter the intermediate-term downtrend, the stock needs to emphatically move beyond ₹370. Such a move can take the stock upwards to ₹400 and then to ₹420 in the long term.
Investors with a long-term perspective can hold this good dividend yielding stock with a stop-loss at ₹240.
I have Bajaj Finance shares. What are the long term prospects of the stock?
Gajaria Gokaldas
Bajaj Finance (₹7,255.1): In mid-2013, the stock took support at around ₹1,000 and started to trend upwards. It has been on a long-term uptrend since then.
The stock has marked an all-time high at ₹7,532 in mid-April and began moving sideways.
It now faces resistance at ₹7,500. Strong break of this resistance can accelerate the stock upwards to ₹8,000 and then to ₹8,500.
However, the indicator and oscillators in the monthly chart are displaying negative divergence, indicating the uptrend is on the brink of reversal.
Such a trend reversal will be from a short to medium-term perspective and could provide buying opportunity for investors. The stock has immediate supports at ₹6,800 and ₹6,300.
A decisive fall below the second support will indicate that the short-term trend has reversed down and the stock can decline to ₹5,650, which is a key medium-term base level.
Next significant supports are at ₹5,000 and ₹4,500. Investor with a long-term perspective can stay invested with a stop-loss at the level of ₹4,350.
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