Technical Analysis

NBCC hits the roof

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

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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.

Loganayhi

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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