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

Please suggest what to do with shares of JSW Steel at an average price of ₹1,256. Can I average out now by buying more, or simply hold? What is the long-term prospect for the scrip?

Prabhu Shankar

JSW Steel (₹1,010.8): After encountering a key long-term resistance at ₹1,350 in September 2014, the stock reversed direction.

Since then, it has been on an intermediate-term downtrend. But the stock found support around ₹920 in early February after retracing 50 per cent Fibonacci retracement level of its prior uptrend.

The stock appears to have reversed higher from this base level. You can consider averaging the stock at around this level while maintaining a stop-loss at ₹820 levels.

Strong breakout of the immediate resistance level of ₹1,100 is needed to change the short-term outlook to bullish and take the stock higher to ₹1,200 and then to ₹1,300-1,350 range in the long term.

Conversely, a slump below the ₹885 and ₹920 medium-term support band will mitigate the uptrend and pull the stock down to ₹730 and ₹600 in the long term.

What are the future prospects of Federal Bank and V-Guard Industries.

Prashanth Pai

Federal Bank (₹142.4): The stock of Federal Bank bottomed out in September 2013, recording a low of ₹44.

Since then, it has been on a long-term uptrend forming higher peaks and troughs. But, after encountering resistance at around ₹150 in late November 2014, it began to move sideways in the band between ₹135 and ₹150.

The key support at ₹135 cushioned the stock from further declines in February. Nevertheless, a strong fall below the lower boundary can pull the stock down to the important support band between ₹110 and ₹115 in the medium term.

Such a fall can be utilised to buy the stock while maintaining a stop-loss at ₹105. On the upside, an emphatic rally above the immediate resistance level of ₹150 will strengthen the long-term uptrend and take the stock higher to ₹165 and then to ₹175 in the medium term.

V-Guard Industries (₹935.8): The stock is on an uptrend in the intermediate and long-term horizon.

But since recording a new high at ₹1,197 levels in January, the stock reversed direction triggered by negative divergence in the indicators and has been on a short-term downtrend.

It trades well below its 21- and 50-day moving averages. It is poised just above a key medium-term support band between ₹900 and ₹930.

A strong downward breakthrough of this band will pave the way for a fall to ₹800 and then to ₹720 in the medium term.

Investors can wait and buy at lower levels while maintaining a stop-loss at ₹700. An upward resumption and breach of the key resistance around ₹1,000 will reinforce bullish momentum and push the stock northwards to ₹1,100 and then to ₹1,200 in the medium to long term.

Please advice on the six months to one year outlook for Colgate.

D Pandurang

Colgate-Palmolive India (₹1943): Across all time frames, the stock is on an uptrend.

As long as it trades above the significant support level of ₹1,000, the long-term uptrend will continue.

Investors with a long-term perspective can hold the stock with a stop-loss at ₹1000. It now tests a key medium-term resistance in the range between ₹1,960 and ₹2,000.

The inability to break this resistance can shackle the stock to moving sideways in the band between ₹1,800 and ₹2,000 in the short term.

A decisive fall below ₹1,800 will alter the short-term uptrend and pull the stock down to ₹1,750 or ₹1,650 levels.

An emphatic downward break of the vital support level of ₹1,650 will mar the stock's medium-term uptrend and drag it down to ₹1,450 and then to ₹1,350 in the ensuing months. But a decisive breach of ₹2,000 can push the stock higher to ₹2,200 levels.

Send your queries to techtrail@thehindu.co.in

Send your queries to techtrail@thehindu.co.in

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