Technical Analysis

NBCC hits the roof

YOGANAND D | Updated on August 10, 2014 Published on August 10, 2014






NBCC hits the roof

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

What is the long-term outlook for Simplex Projects?

Ghanshyam Soni

Simplex Projects (₹53.7): The stock has been very volatile since facing resistance at ₹97 in early July 2014, and has fallen sharply since then. It is moving circuit to circuit and continues its long-term downtrend. It is tough to envisage a very long-term outlook for such a stock. Therefore, consider exiting the stock in rallies with a stop-loss at ₹50.

A decisive fall below ₹50 will drag the stock down to ₹40 and then to ₹25 or even to ₹15 in the long term. Conversely, the stock needs to strongly close above ₹100 for an up move to ₹130 in the long run. Immediate resistances are poised at ₹65 and ₹80 levels.

I bought NBCC at ₹375. Please give the stop-loss and resistances levels for the stock.

Rajendran N, G Somashekhar

National Buildings Construction Corporation (₹453.2): After breaching a key long-term resistance at ₹184 in late April 2014, the stock continued its uptrend. Its rally came to an end after recording a new high at ₹486 in early July. Ever since the stock has been moving sideways, testing resistance at ₹475. Volumes are declining and indicators on the daily chart are signalling a downward reversal.

Hence, investors can take profits off the table at this juncture. Stop-loss for the short term can be placed at ₹435. A decisive fall below ₹435 will strengthen the stock’s bearish momentum and drag it down to ₹400 or even ₹395. Next supports below ₹400 are at ₹350 and ₹300 levels. Resistance above ₹475 is at ₹500.

I bought CEAT at ₹695 and PTC India Financial Services at ₹35. Please advise on the technical outlook.


CEAT (₹533.1): Following a sharp rally in mid-June 2014, the stock encountered resistance at ₹717 and reversed its uptrend. It has been on a short-term downtrend since then. While trending down, the stock breached its immediate support at ₹600 in late July and halted at ₹500 last week. Consider holding the stock with a stop-loss at ₹495.

An upward reversal from this support level can take the stock higher to ₹600 and then to ₹650 in the short term. But a conclusive fall below ₹500 could strengthen the downtrend and pull the stock lower to ₹450 and ₹390 levels where its 200-day moving average is positioned.

PTC India Financial Services (₹34.2): The stock’s uptrend that started to gain momentum in May this year encountered resistance at ₹40 in early July. The movement thereafter has been choppy and trending negative. Exit the stock at current levels as the stock is experiencing selling pressure. Further, a fall below ₹30 can drag it down to ₹25 and then to ₹20 in the medium term. On the other hand, an emphatic rally above ₹40 is required to reinforce bullish momentum and take the stock higher to new highs. Immediate resistance is at ₹36.

Published on August 10, 2014
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