Technical Analysis

Biocon in a medium-term downtrend

Yoganand D | Updated on January 08, 2018 Published on October 01, 2017

As long as the stock trades above the support of ₹280, the long-term uptrend will continue



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

I want to invest a significant amount in the stock of Biocon for the long term. Should I invest?

Riyaz Sarvaiya

Biocon (₹332.9): The stock of Biocon tumbled 6 per cent last week, breaching a key support at ₹350 and 200-day moving average.

With this fall, the stock appears to have resumed its medium-term downtrend that has been in place from the all-time high of ₹424 in July 2017. The short-term trend is also down for the stock. It hovers well below its 50 and 200-day moving averages. However, the stock has an immediate support at ₹325 levels.

An emphatic slump below this support will strengthen the downtrend and pull the stock down to ₹310 and ₹300 levels.

As long as the stock trades above the significant support level of ₹280, the long-term uptrend will continue. You can consider buying the stock in declines or on strong a fall below ₹300 levels with a stop-loss at ₹270.

An upward reversal from the key supports mentioned above can take the stock higher to ₹350 and ₹370 levels. An emphatic break above ₹370 can push the stock higher to ₹400 and ₹420 levels in the long term. Key supports below ₹280 are at ₹250 and ₹240 levels.

Please let me know the long-term prospects for Allied Digital Services

M X Thomas

Allied Digital Services (₹19.5): Ever since registering a multi-year high of ₹64.8 in January 2016, the stock of Allied Digital Services has been in a long-term downtrend. Medium as well as short-term trend are down for the stock. Last week, the stock plunged 10.3 per cent and recorded a new 52-week low of ₹19.45 levels. The outlook is bearish. It can continue to trend downwards and test supports at ₹17 and ₹15 levels.

The stock needs to rally beyond ₹27 to alter the short-term downtrend. Strong up move beyond ₹35 is required to alter the medium-term downtrend. Investors with a long-term perspective should desist investing in the stock.

Should I buy the stock of MBL Infrastructures?

Kiran

MBL Infrastructures (₹21.9): The stock of MBL Infrastructures has been in a long-term downtrend since marking a new high of ₹329 in March 2015. Both the intermediate and medium-term trends are also down for the stock. However, in the short term, the stock has been moving sideways since early August 2017 in the band between ₹21.5 and ₹26.5. Though the weekly indicators and oscillators show signs of trend reversal, the price action lacks strength. Avoid buying the stock at this juncture. Strong break above the key resistances at ₹30 and ₹36 will be cue for taking long positions with a stop-loss at ₹28. Targets ₹50 and ₹60.

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Published on October 01, 2017
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