Technical Analysis

Avanti Feeds in revival mode

Yoganand D | Updated on August 05, 2018 Published on August 05, 2018

After finding support at around ₹400 in mid-July, the stock changed direction

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

What are the medium-to-long term targets for Avanti Feeds and Thirumalai Chemicals ?

Sadheesh Kumar

Avanti Feeds (₹511): The stock of Avanti Feeds gained 6 per cent on Friday, on the back of buying interest.

With this rally, the stock had surged 15 per cent, accompanied by good volume last week.

Since encountering a key resistance at ₹1,000 in November 2017, the stock has been in an intermediate-term downtrend. Medium-term trend is also down for the stock.

However, after finding support at around ₹400 in mid-July, the stock changed direction, triggered by positive divergence in the weekly relative strength index.

The weekly indicators and oscillators are recovering from the oversold territory.

Near-term trend is up and the stock has surpassed its 21-day moving average recently.

But it faces a significant resistance ahead at ₹540-560 band. An emphatic breakout of the barrier can take the stock higher to ₹600 and ₹650 levels.

To alter the intermediate-term downtrend, the stock needs to conclusively move beyond ₹700, and the ensuing targets are ₹750 and ₹850. Long-term targets are ₹900 and ₹1,000.

Investors with a long-term perspective can buy the stock on declines with a stop-loss placed at ₹380 level.

Conversely, if the stock tumbles below the key support level at ₹400, it will mar the positive outlook and drag it down to ₹335 and ₹290 levels. Immediate supports are placed at ₹480 and ₹450 levels.

Thirumalai Chemicals (₹1,515): After encountering a key resistance at ₹2,400 in late April, the stock fell sharply in May.

However, it found support in the ₹1,250-1,300 band in early June and began to move sideways in a wide range between ₹1,250 and ₹1,620.

Taking support from the lower boundary, the stock heads towards the resistance level of ₹1,620.

Although it surpassed its 21- and 50-day moving averages last week, it faces a crucial resistance ahead at ₹1,620 levels. Therefore, investors with a medium-to-long term perspective can buy the stock on a strong rally above ₹1,620 with a fixed stop-loss at ₹1,300 levels.

A decisive breakthrough of the upper boundary can pave way for an up-move to ₹1,800 and ₹1,900 in the medium term.

Further rally beyond ₹1,900 will alter the downtrend and can take the stock northwards to ₹2,000, ₹2,200 and ₹2,400 in the long run.

On the other hand, failure to move beyond ₹1,620 can extend the sideways consolidation phase for a while.

A downward break of the key support in the ₹1,250-1,300 zone will strengthen the downtrend that has been in place from late April. Subsequent supports below ₹1,250 are at ₹1,100 and ₹1,000 levels.

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Published on August 05, 2018
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