Your Stock Portfolio. Crompton Greaves reverses from a key hurdle

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

What is the outlook for Crompton Greaves and ICSA (India)?

Biswajit Das

Crompton Greaves (₹195.1): Since taking support around ₹80 in August 2013, Crompton Greaves has been on an intermediate-term uptrend. Breaking a key long-term resistance, the stock accelerated during April and May this year. After retracing 50 per cent Fibonacci retracement level of its prior downtrend, the stock encountered a significant resistance at ₹215 in early June and started to decline.

The stock’s current decline can extend and turn into a short or medium-term downtrend on a strong breakthrough of the immediate support at ₹188. In that scenario, the stock can decline to 160 over the medium-term. Next key supports below ₹160 are pegged at ₹ 135 and ₹110.

On the upside, an emphatic break out of ₹215 is required to alter the stock’s long-term downtrend, which can take it higher to ₹240 and then to ₹270. Subsequent important hurdle is at ₹290.

ICSA India (₹7.5): The stock continues to be in the bears’ grip. Desist trading or investing in this stock as the prospects are bleak. Of late, the stock has moved from circuit to circuit.

Encountering a key resistance at ₹10, it is moving downwards. Only a decisive move above ₹10 can take the stock higher to ₹13, ₹15 and then to ₹19 in the long-term. But a fall below ₹6.5 can drag the stock down to ₹5 and then to ₹4 eventually.

Please give technical outlook on Indian Metals and Ferro Alloys (IMFA) after recent up-move from ₹250 to ₹400.

Nayan Gangar

Indian Metals and Ferro Alloys (₹398.4): Yes, in the short span of two weeks, the stock skyrocketed from ₹250 to ₹430 in mid-May 2014. However, the stock encountered resistance at ₹440 thereafter and began to move sideways in a narrow band between ₹380 and ₹440. Strong decline below ₹380 can pave the way for a downtrend and pull the stock down to ₹350 and then ₹300 in the medium-term.

A further fall below the key long-term support of ₹300 will mar the stock’s intermediate-term uptrend and drag it lower to ₹250. Next support to note is in the zone between ₹190 and ₹200.

However, an upward reversal from the stock’s immediate support of ₹380 can take it to the upper boundary of ₹440. Conclusive breakthrough of ₹440 will signal a resumption of the stock’s intermediate-term uptrend and take it northwards to ₹510-₹520 range in the long-term.

Request long term investment outlook on BPCL and ONGC.

Pandurang D

Bharat Petroleum Corporation (₹570.1): Ever since bottoming out at the 2008 low of ₹103, the stock has been on a long-term uptrend. Taking support from the long-term support band between ₹250 and ₹270, the stock continued to trend northwards from last September. Breaking the key resistance of ₹430 in April 2014, the stock accelerated to register a new high at ₹650 in June. Profit taking and selling pressure is keeping the stock to moving sideways. A strong decline below ₹520 can mitigate the stock’s short-term uptrend and drag it down to ₹480 or ₹450 in the short to medium-term.

Only a decisive fall below the key long-term support band between ₹430 and ₹450 will mar the intermediate-term uptrend and pull it down to ₹400 and then to ₹350 levels. On the other hand, rally above the immediate resistance at ₹610 can take the stock higher to ₹650 and ₹700 levels in the forthcoming months. Investors with a long-term perspective can consider holding the stock with a stop-loss at ₹430.

Oil and Natural Gas Corporation (₹411): The stock broke out of its four and half year broad sideways consolidation range in early May this year. Subsequently, ONGC gathered bullish momentum and went on to make a new all-time high at ₹ 472 in early June.

However, the stock started to decline, triggered by negative divergence in the weekly indicators. The stock is now hovering above a key support at ₹400. A fall below this level will mar the short-term bullish momentum and pull the stock down to ₹370.

Further decline below ₹370 can drag the stock lower to ₹350 which is a significant long-term support level. Next key long-term supports are pegged at ₹330 and ₹290 levels. Investors with a long-term horizon can hold the stock with a stop-loss at ₹320 levels.

An upward reversal for the afore-mentioned supports can take the stock northwards to ₹444 and then to ₹470 in the medium-term. Subsequent key resistance will be ₹500.

COMMENT NOW