Technical Analysis

Your Stock Portfolio

Yoganand D | Updated on March 16, 2014 Published on March 16, 2014




I hold shares of SBI. Please advise on whether I should hold or sell.

S Subramanian

State Bank of India (₹1,653.5): The stock took support from its key long-term support band between ₹1,450 and ₹1,500 in February and started moving up. As long as this base zone holds, you can consider holding your long positions with stop-loss at ₹1,450. An emphatic breakthrough of the current resistance at ₹1,700 can take SBI to ₹1,900 in the medium term. Its next resistance is little further away at ₹2,050. A breakout of this level will pave the way for a long-term uptrend and the stock can move to ₹2,500. You can consider booking partial profits at this resistance level. Subsequent long-term resistance to note is in the band between ₹2,800 and ₹2,850.

On the other hand, a significant fall below the ₹1,450 and ₹1,500 support zone will be the cue for partially selling your holdings and buying it at lower levels. In this scenario, the stock can decline to ₹1,300 and then to ₹1,200 in the medium term.

Kindly suggest if TNPL and CARE should be bought.

S Subramanyan

Tamil Nadu Newsprint & Papers (₹120.7): Since taking support at ₹85 in August and September 2013, the stock went on rising until it registered a 52-week high at ₹143 in January 2014, gaining more than 60 per cent. However, TNPL began to decline thereafter and has been on a corrective downtrend.

Traders with a short-term perspective can consider buying at its immediate support at ₹115 with a stop-loss at ₹108. Resumption of the intermediate-term uptrend can take the stock northwards to ₹130 and then to ₹145. But a decisive fall below ₹110 can mitigate the intermediate-term uptrend and drag the stock down to ₹100 and to ₹94 in the long term. Next key support is pegged at ₹85. Credit Analysis and Research (₹729.1): CARE Rating has limited history, so to derive a clear long-term trend is difficult. Since its August 2013 low at ₹415, the stock has been on an intermediate-term uptrend. Nevertheless, this uptrend is under threat as the stock commenced to decline, after encountering a hurdle at ₹859 in February. The stock is now testing its uptrend-line and hovering just above its trend deciding support zone at ₹680 and ₹700. A conclusive fall below this band will mar the uptrend and drag the stock down to ₹600, which is a key base to watch and buy the stock. Next support levels below ₹600 are at ₹525 and ₹450. Alternatively, an upward reversal from the immediate support band between ₹680 and ₹700 will be cue for buying with a stop-loss at ₹670 level. In the medium term, the stock can trend higher to ₹770, ₹800 and ₹850. A strong move above ₹850 will take the stock higher to ₹950.

Please review technicals of Wim Plast and Indoco Remedies.

Supriya VV

Wim Plast (₹470.5): Following a one-and-a-half-year sideways consolidation in the broad range between ₹300 and ₹425, the stock broke out of this range last week, gaining 10 per cent. However, the stock is losing its bullish momentum and is also facing key psychological resistance ahead at ₹500. Long-term investors holding this stock can consider booking partial profits at this juncture. A downward reversal from ₹500 can pull the stock down to ₹425 and then to ₹380 in the short term. A fall below ₹350 will mitigate the intermediate-term uptrend and drag it down to ₹300. But a move beyond ₹500 can push it to ₹550 or to ₹600 in the long term.

The long-term uptrend will be under threat if the stock declines below its significant base level at ₹300. In that case, the stock can decline to ₹240-₹250 support band.

Indoco Remedies (₹128.4): The intermediate-term uptrend of the stock came to an end after encountering resistance in the zone of ₹155 and ₹160 in January 2014. After testing this resistance zone in late February and early March, the stock started to decline. The short-term trend is down. The stock has immediate support at ₹120. A dive below this level can pull it lower to ₹110 and then to ₹100 in the short term. A tumble below the key support at ₹100 will strengthen the downtrend and drag the stock down to ₹70 in the long term. Conversely, a move above ₹135 can push the stock higher to ₹145 and then to ₹155 in the medium term.

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Published on March 16, 2014
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