Technical Analysis

GSK Pharma — unhealthy trends

Yoganand D | Updated on July 20, 2014 Published on July 20, 2014

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A fall below the ₹2,400-2,350 support zone will spell trouble for the stock



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

Will Camlin Fine Sciences sustain at current levels? What is the outlook for it?

Vageesh

Camlin Fine Sciences (₹96.1): Following a sharp up move in the months of May and June 2014, the stock recorded a new high at ₹106 on June 19.

Since then, the stock has been on a near-term downtrend triggered by negative divergence in both daily and weekly indicators. Volumes have dipped over the past three weeks.

The stock found support at ₹80 last week and bounced back, gaining 10.8 per cent. It surpassed its immediate resistance level of ₹94. But the sustainability of the uptrend is difficult.

A strong decline below the key support level at ₹80 can trigger selling interest and drag the stock down to ₹70 or even to ₹50 in the long-term. Key long-term support below ₹50 is pegged in the band between ₹27 and ₹30. Resistances to note are at ₹103 and ₹110.

What is the short- and long-term view for Suven Life Sciences, bought at ₹90?

Mahantesh Sankh

Suven Life Sciences (₹109.6): The stock has been on a medium-term uptrend, since taking support at ₹70 in April 2014. The stock’s short-term trend is also up.

However, after registering an all-time high at ₹118, the stock started to witness selling pressure. The volumes have also been declining.

The upside for the stock is limited. Hence, consider taking profits off the table at this juncture and re-entering again at lower levels.

Significant supports are at ₹95 and ₹80. Resistances are pegged at ₹115 and ₹120. A decisive fall below ₹70 will mar the stock’s long-term uptrend and drag it down to ₹60 and then to ₹50.

I bought shares of NCC at ₹150 and Visa Steel at ₹60 in 2008-09. Should I average at the current price?

Venkataraman

NCC (₹73.7) and Visa Steel (₹24.6): You missed the bus in both the stocks during the 2009 and 2010 rally, when they went above your purchase price. If you are a high risk appetite investor with a long-term perspective, you can consider averaging these stocks at lower levels.

A strong rally above ₹100 can take the stock of NCC higher to ₹124, ₹140 and ₹160 in the long-term. Key supports to note are placed at ₹60, ₹45 and ₹35 levels.

For VISA Steel, an emphatic rally beyond ₹40 is required to alter its long-term downtrend and take it northwards to ₹47 and then to ₹60. However, the stock has immediate resistances to surpass at ₹27 and ₹35. On the downside, supports are at ₹20 and ₹15.

What is the long-term outlook on GSK Pharma and Pfizer.

Pandurang Deshpande

GlaxoSmithKline Pharmaceuticals (₹2,487.8): The stock has been on a medium-term downtrend since marking a record high at ₹3,054.40 in March 2014. A further fall below the ₹2,400-2,350 support zone will reinforce the downtrend and pull the stock down to ₹2,200 levels. But, an upward reversal can take the stock higher to ₹2,650 and ₹2,750 levels.

As long as the stock trades above ₹1,900 its long-term uptrend will be intact and it can revisit ₹2,900 and ₹3,050 in the long-term. Investors with a long-term perspective can consider holding the stock with a stop-loss at ₹1,900.

Pfizer (₹1,392.8): Since bottoming out from its late 2008 low of ₹436, the stock has been on a long-term uptrend. Its long-term base zone between ₹1,030 and ₹1,050 has consistently provided support during 2013 and also in early 2014. The stock has been on a medium-term uptrend since February 2014.

Investors can hold the stock with a stop-loss at ₹1,030. A fall below this long-term base level can mar the uptrend and drag the stock down to ₹900 and then to ₹700. Strong rally above ₹1,500 can take the stock higher to ₹1,630 and then to ₹1,750 in the long-term.

Send your queries to techtrail@thehindu.co.in

Published on July 20, 2014
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