Technical Analysis

Bank of India faces a strong hurdle

Yoganand D | Updated on January 24, 2018 Published on March 29, 2015





The stock is in a long-term downtrend

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

Kindly guide me on the short-term view for Bank of India.

BS Sreenivasa Sarma

Bank of India (₹198.3): The stock of Bank of India has been on a long-term downtrend since marking an all-time high at ₹588 in October 2010. Following a corrective medium-term uptrend, retracing 50 per cent of the fibonacci retracement level, the stock encountered resistance at around ₹350 in May 2014 and resumed its downtrend. Since then, BOI has been on an intermediate-term downtrend.

The medium as well as short-term trends are also down. Last week, the stock fell almost 7 per cent strengthening the downtrend and also breaching a key short-term support at around ₹210. It hovers well below the 50- and 200-day moving averages. Any corrective rally can test resistance at ₹210, ₹225 and ₹250 levels. A downward resumption from these levels can drag the stock down to 170 in the short to medium term. Next important long-term support is pegged at ₹130. To alter the medium-term and long-term views, the stock needs to rally beyond ₹300 and ₹350 levels, respectively.

I am holding Graphite India. What is the medium to long- term outlook for this stock?


Graphite India (₹81.3): Since recording a new high at ₹126 in June 2014, the stock has been in an intermediate-term downtrend. Medium-term trend is sideways between ₹80 and ₹93. The short-term trend for the stock is down. An emphatic fall below ₹80 will strengthen the downtrend and pull the stock down to ₹70 in the ensuing months. If the stock's significant long-term support zone between ₹65 and ₹70 fails to arrest its decline, a fall to ₹55 or even to ₹50 in the medium to long term is possible. On the upside, the stock needs to move above ₹93 to alter the medium-term view and take it higher to ₹96 and then to ₹100. Next significant resistances are at ₹106 and ₹115.

Please advise about the short and medium-term prospects of HEG which I have been holding for a long time with no positive movement in the prices.


HEG (₹205.6): HEG reversed direction encountering resistance at ₹340 in September 2014. While trending down, the stock breached multiple key supports and eventually found base around ₹200 in February.

However, the subsequent rally lost grip and the stock tumbled 4 per cent in the past week continuing the downtrend. An inability to hold at or stay above the current base level of ₹200 in the short term, could lead to the stock breaching it and fall to ₹175 or even to ₹150 in the medium term. Key long-term support below this level is placed at ₹100. Important resistances are at ₹225, ₹250 and ₹300.

I bought Hero MotoCorp shares at ₹2,850. Can I hold this stock for three months? I would like to know the technical levels.


Hero MotoCorp (₹2,576.7): One leg of the stock’s long-term uptrend came to a halt after registering an all-time high at ₹3,271 in December 2014. Subsequently, the stock changed direction and has been on a medium-term downtrend. Currently, the stock is in a crucial medium-term trend deciding band between ₹2,500 and ₹2,600. An upward reversal from this band can push the stock higher to ₹2,700 or ₹2,850 levels in the short to medium-term horizon. Nevertheless, a conclusive downward break of ₹2,500 can drag the stock down to ₹2,400 or even to ₹2,200 in the medium term.

Therefore, traders should tread with caution now and can consider averaging at lower levels with a stop-loss at ₹2,250 levels. Key resistances above ₹2,850 are placed at ₹3,000 and ₹3,200 levels.

Published on March 29, 2015
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