Technical Analysis

Amara Raja Batteries — losing charge

Yoganand D | Updated on March 04, 2018 Published on March 04, 2018

A downward breach of ₹800 can drag the stock to ₹750 in the short to medium term

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

What is your view on Amara Raja Batteries bought at ₹783?

M Prashanth

Amara Raja Batteries (₹812.7): The stock of Amara Raja Batteries has been in an intermediate-term downtrend since registering an all-time high at ₹1,132 in August 2015. Key resistance at ₹1,050 limited the stock's rally in October 2016. Subsequently, the stock resumed its downtrend and continued to trend down.




However, after retracing 50 per cent fibonacci retracement level of the prior uptrend, the stock found support at ₹665 in November 2017. The corrective up-move had encountered a significant long-term resistance in the band between ₹850 and ₹870 this January. The stock finds difficulty in surpassing this resistance band. It has an immediate support at ₹800. An upward reversal from this base level can keep the stock in consolidation mode in the ₹800-870 band for a while.

But a decisive downward breach of ₹800 can drag the stock down to ₹770 and then to ₹750 in the short to medium term. The stock has a significant long-term support in the ₹675-700 range. As long as the stock trades above this range, the long-term uptrend will remain in place and those with a long-term perspective can stay invested with a stop-loss at ₹675.

You can consider averaging the stock in dips while maintaining a stop-loss at ₹740. An emphatic breakthrough of the key resistance at ₹870 will weaken the downtrend and take the stock higher to ₹900 and ₹950 levels. Further rally above ₹950 is needed to strength it and take it northwards to ₹1000 and ₹1,050 in the long run.

What are the short and medium outlooks for SQS India BFSI and De Nora India?

Balakrishnan M R

SQS India BFSI (₹515.1): Since recording a new high at ₹1,290 in January 2016, the stock has been in a long-term downtrend. Nevertheless, it found support at around ₹400 in August 2017 and has been moving sideways in the wide range between ₹400 and ₹600. A plunge below the immediate support at ₹500 will strengthen the short-term downtrend and pull the stock down to ₹450 levels. On the other hand, a conclusive rally above the immediate resistance at ₹550 can take the stock higher to ₹600. Next long-term resistances are at ₹650 and ₹750. A strong up-move beyond ₹850 is required to alter the downtrend and take the stock higher to ₹900 and ₹1,000 levels.

De Nora India (₹523.5): Following a range-bound movement between ₹215 and ₹325, the stock made an upward break-out from this range in late January this year. The stock accelerated and doubled in a very short span of time to record a new high at ₹633 in mid-February. Later, it changed direction and started to decline. Last week, it tumbled 10.8 per cent, breaching a support at ₹550.



Subsequent supports at ₹500 and ₹450 could be tested in the short term. Further decline below ₹450 can pull the stock down to ₹430 and ₹400 levels. Resistances above ₹550 are at ₹600 and ₹630.

I have bought High Ground Enterprise at ₹16.9. Should I stay invested or sell it?

Lal Krishnesh N S

High Ground Enterprise (₹11.12): The stock is in a medium-term downtrend. If you are a high-risk appetite investor, then consider averaging the stock with a stop-loss at ₹9.5.


A rally above ₹13.5 can take the stock higher to ₹15.5 and ₹17.5 or even to ₹20 in the medium term. Consider exiting the stock at these resistances. Supports are at ₹10.5 and ₹10.

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Published on March 04, 2018
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