Technical Analysis

Sizzling Stocks

Yoganand D. | Updated on January 30, 2011



DLF (Rs 223.1)

After testing its key long-term support in the band between Rs 250 and Rs 260, the stock nose-dived 11.6 per cent last week, conclusively breaking through it. The stock has been on an intermediate-term downtrend from its October 2009 peak of Rs 490. In October 2010, the stock peaked at Rs 397 and has been on a steady medium-term downtrend as well. It has fallen almost 44 per cent from this peak. The stock slipped below its 200-day moving average in last November and is also trading well below 50- and 200-day moving averages. Both daily and weekly relative strength indices are hovering in the bearish zone. Daily as well as weekly moving-average convergence-divergence oscillators are featuring in the negative territory.

A strong surge above Rs 330 only will alter the ongoing medium-term bearish view and lift the stock higher to Rs 390. Immediate resistance for the stock is in the band between Rs 250 and Rs 260. An emphatic close above this band can push DLF upward to the next resistances at Rs 280 and Rs 300. However, inability to breach this significant resistance band can drag the stock down to Rs 200 in the medium-term. Key support below Rs 200 is at Rs 180.

TVS Motor Company (53.6)

TVS Motor plunged 13.6 per cent in the last week. The stock reversed direction in late November 2010, after encountering its long-term key resistance near Rs 85. Since then, it has been on a medium-term downtrend. It is hovering way below its 50 and 200-day moving averages. Both daily and weekly relative strength indices are featuring in the bearish zone. The daily moving average convergence divergence indicator is hovering in the negative territory and weekly MACD is on the verge of entering this zone. This indicates downward momentum.

We are bearish on the stock from a medium-term perspective. Its current downtrend can prolong further to Rs 50 and then to Rs 45. Key short-term resistances are pegged at Rs 60 and Rs 63. Significant medium-term resistances are at Rs 70 and Rs 75.

Published on January 30, 2011

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