Here are some answers to readers’ queries on the performance of their stock holdings.
I have bought shares of Suven life at ₹90. What is the
long-term view?
Mahantesh Sankh
Suven Life Sciences (₹86.6): Suven Life Sciences is a small-cap stock that started gaining momentum after breaching its key long-term resistance at ₹30 in August 2013.
It was a multi-bagger. However, after registering an all-time high at ₹100.5 in late May 2014, the stock began to decline. Subsequently, it failed to surpass its key immediate resistance at ₹93 and is moving sideways with a negative bias. You have bought the stock at this key resistance level from which it is currently going down.
This could be a medium-term trend reversal. A strong decline below the immediate support band between ₹80 and ₹83 can drag the stock down to ₹70. Therefore, you can exit the stock at the current levels and re-enter at support levels of ₹70 or ₹65. An upward break out of ₹93 can take the stock higher to ₹100.5.
Long-term trend will remain up as long as the stock trades above the ₹58-60 band. A fall below this band can take the stock to lower levels at ₹50 and then to ₹45. Investors with a long-term perspective can hold the stock with a stop-loss at ₹58.
Indicate the long-term technical outlook for Mahindra Holidays. Can I buy the share at the current levels?
Ajit
Mahindra Holidays & Resorts India (₹297.8): The stock's long-term downtrend came to an end in September 2013 when it marked a new low of ₹206. Thereafter, it moved sideways in the band between ₹210 and ₹265 until it conclusively broke out of it in May 2014.
Nevertheless, the stock met resistance at ₹315 in the previous week and is now showing weakness. Investors with a long-term perspective can make use of declines and buy around ₹265 or ₹240 levels with a stop-loss at ₹227. Strong break out of the key long-term resistance at ₹315 can push the stock higher to ₹350 and then to ₹380 in the long run. On the downside, a decisive plunge below ₹230 can reinforce its bearish momentum and pull the stock down to ₹206 or to a new nadir in the long term.
I have brought Sudar Industries at an average price of ₹48. How long should I hold it?
Girish
Sudar Industries (₹32.2): After taking support at around ₹18 in late May 2014, the stock has rallied. But, it is now struggling to surpass ₹35.
The stock’s indicators and oscillators are projecting weakness and the stock can once again decline to ₹25 or ₹18 in the coming months.
A fall below ₹18 will drag the stock down to below ₹10. As the stock moves from one circuit to another, trading in this stock is highly risky. Kindly exit the stock as early as possible.
The likelihood of breaking the resistance at ₹35 is low. If the stock does breach this level, it could reach ₹40 or ₹48 in the long term.
What are the prospects for Sadbhav Engineering? Can I buy at the present level?
Urmila Kabra
Sadbhav Engineering (₹194.2): Following a strong accelerated uptrend in the months of April and May 2014, the stock encountered resistance at ₹210 in early June and started to decline thereafter.
It is not advisable to buy the stock around the resistance level. Moreover, there is a trend reversal on the cards.
A strong decline below ₹180 will mar the short-term uptrend and drag the stock down to its key long-term base level at ₹150 in the coming months.
Next important support is placed in the ₹125-₹130 zone. Investors with a long-term perspective can make use of these support levels to buy with a stop-loss at ₹125.
An upward revival from the afore-mentioned support can take the stock to ₹210 and then to new highs in the medium- to long-term.
Send your queries to techtrail@thehindu.co.in
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