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Here are some answers to readers’ queries on the performance of their stock holdings.
Please give technical outlook on South Indian Bank and Axis Bank.
M Ajikumar
South Indian Bank (₹29.7): The stock's price-volume breakout of the resistance level at ₹30 in July was short-lived. After recording an all-time high at ₹35, the stock began to fall. It now appears to have re-entered the long-term consolidation phase in the wide band between ₹20 and ₹30.
A decline below ₹26 can reinforce bearish momentum and pull the stock down to ₹23 and then to ₹20 in the medium term. Since 2010, the stock has been in sideways consolidation.
However, its long-term uptrend will remain intact as long as it trades above ₹20. Investors with a long-term perspective can consider holding the stock with a stop-loss at ₹19. Long-term targets are ₹35 and ₹40.
Axis Bank (₹387.5): The stock has been on an intermediate-term uptrend since taking support at ₹160 (adjusted for stock split) in September 2013. The medium-term trend is also up.
However, the short-term trend has been sideways after encountering resistance around ₹400 in early June this year. The stock has been swinging in the band between ₹350 and ₹400. A slump below ₹350 will pull the stock down to ₹330 and then to ₹300.
Only an emphatic breakthrough of the long-term support at ₹300 will alter the stock's medium-term uptrend. The next significant supports are at the ₹280 and ₹260 levels. The intermediate-term uptrend will remain in place as long as the stock trades above ₹260.
Supports at ₹220 and ₹200 will hold up the stock if it falls below ₹260, which is unlikely in the medium term. Key resistances above ₹400 are at ₹420 and ₹440.
Is Capital First a good buy at the current levels for the short- to medium-term?
Krish
Capital First (₹237.5): The stock has been on an intermediate-term uptrend from its January 2014 low at ₹125. However, it encountered a key long-term resistance at ₹250 in mid-July and is now moving sideways. It is not advisable to buy the stock at key resistance levels. Therefore, wait for corrective declines and buy at key support levels of ₹200 and ₹170 in the short- to medium-term.
Alternatively, a decisive breakout of the hurdle at ₹250 will also be a buying opportunity. In such a scenario, the stock can continue its uptrend and target ₹276 and ₹300 levels in the medium- to long-term.
In the short term, the stock may continue to hover between the ₹220 and ₹250 range with a negative bias. A fall below ₹220 can drag the stock down to ₹200. As long as the stock trades above ₹170, its intermediate-term uptrend will remain intact.
Investors can hold the stock with a stop-loss at ₹165 levels. Subsequent supports below ₹170 are at ₹150 and ₹130.
Please discuss the outlook for NHPC & Jaiprakash Power
Rajesh Reddy
NHPC (₹22.5): The long-term trend in NHPC has been down since its September 2009 high of ₹39. The stock failed to surpass its significant resistance band between ₹28 and ₹30 during February 2013 and June 2014.
This resistance zone is a key trend deciding level for NHPC. Only a conclusive breach of this level will alter the long-term downtrend and take the stock higher to ₹33.5 and then to ₹39.
But the stock is now in a short-term downtrend. An emphatic fall below the immediate support at ₹22 will pave way for a further drop to ₹20 and then to ₹18 in the short- to medium-term. A decisive close below the significant long-term support level of ₹18 will drag the stock down to ₹15 eventually.
Jaiprakash Power Ventures (₹18.5): The stock lost momentum while testing the significant long-term resistance level at ₹26 in late May and early June 2014 and started to trend lower.
Since then, the stock has been on a short-term downtrend. It breached its key support at ₹21 last month.
Nevertheless, the stock is hovering just above its immediate support and 200-day moving average at ₹17.5.
A further sell-off in the stock can trigger a decisive fall below ₹17.5. The stock can then plunge to ₹15 or even to ₹13 in the medium- to long-term. To alter the bearish trend, the stock has to conclusively break through its key resistance at ₹26 to move up to ₹30. The next key resistances are at ₹35 and ₹40.
Send your queries to techtrail@thehindu.co.in
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