Technical Analysis

Asahi India breaks through the ceiling

Yoganand D | Updated on January 24, 2018 Published on May 31, 2015

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The stock surged past its long-term resistance at ₹154 last week



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

What is the prospect for Crompton Greaves and Asahi India Glass?

Biswajit Das

Crompton Greaves (₹167): The stock encountered significant long-term resistance at around ₹215, which is also the 50 per cent Fibonacci retracement level of prior downtrend, in June 2014. After repeated testing, the stock failed to break this resistance decisively and started falling from September.

Since then, the stock has been on an intermediate-term downtrend. But the key support at ₹160 provided base in early February 2015.

Within this downtrend, the stock has been moving sideways with a negative bias over the past four months.

Strong downward breakthrough of the support level of ₹160 will strengthen the downtrend and pull the stock down to ₹135-140 band in the medium term. Only a strong rally above the trend-deciding level of ₹190 will alter the downtrend and take the stock northwards to ₹215 levels.

For long-term bullish momentum, the stock needs to emphatically break the key resistance at ₹215. Such a breakthrough can take the stock higher to ₹250 in the long run. Investors with a long-term perspective can hold the stock with a stop-loss at ₹125 levels.

Asahi India Glass (₹166.2): On Friday, the stock of Asahi India Glass skyrocketed almost 10 per cent with good volume, decisively breaking a long-term resistance level at ₹154. It is in an uptrend across all time frames — long, medium and short-term.

The stock hovers well above its 50- and 200-day moving averages. The long-term outlook will stay bullish as long as the stock trades above ₹80. Investors with a long-term horizon can hold the stock with a stop-loss at ₹80.

Medium-term investors can stay invested with a stop-loss at ₹115 levels. The stock can extend its rally to reach ₹180 and then ₹200 in the medium term.

How will HDIL and Shree Cement fare from a medium and long-term perspective?

Venugopal Kandala

Housing Development & Infrastructure (₹109.2): Since bottoming out at its August 2013 low of ₹26, the stock has been trending upwards. Nevertheless, it met with a key long-term resistance at ₹120 this February. Following a blip above this resistance in April, the stock failed to decisively close above it. While the short-term trend is down, the medium-term trend continues to be up for the stock. As long as the stock trades above ₹90, it has the potential to break through the ₹120 resistance level and begin trending northwards in the coming months.

But a conclusive fall below ₹90 will mar the uptrend and drag the stock down to ₹80 and then to ₹60 eventually. On the upside, an emphatic breakthrough of ₹120 can push the stock higher to ₹140 and then to ₹175 levels in the long term. Investors with a long-term view can remain invested with a stop-loss at ₹80.

Shree Cement (₹10,992.9): In August 2013, the stock took support at ₹3,412 and resumed its long-term uptrend.

Within this trend, the stock began to consolidate sideways from February 2015 in the broad range between ₹10,000 and ₹12,000. The stock recently recorded a new high at ₹12,388 but fell back into the sideways range. Now, it is heading towards the lower boundary of the range.

A decisive fall below ₹10,000 will change the trend from sideways to drag the stock down to ₹9,000 and then to ₹8,000 in the medium term. Conversely, a strong rally above the upper boundary at the level of ₹12,000 can take the stock higher to ₹13,000 in the medium term.

Investors sitting on profits can consider booking some on a fall below ₹10,000 and holding with a stop-loss at ₹7,800 levels. Immediate support is at ₹10,000 and resistance is placed at ₹11,500 levels.

Send your queries to techtrail@thehindu.co.in

Published on May 31, 2015
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