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Here are answers to readers’ queries on the performance of their stock holdings.
I have bought the stock of Canara Bank at ₹260. Should I hold or sell?
Rajendran N
Canara Bank (₹279.4): After encountering a significant long-term resistance at ₹470 in January 2015, the stock changed its direction. Since then, it has been on an intermediate-term downtrend.
Nevertheless, the stock found support at its long-term base of ₹250 in July and September. It is good that your purchase price is around this key support area.
The stock’s recovery is weak in spite of the fact that there is a strong increase in daily traded volume over the past two months.
An emphatic breakthrough of the immediate resistance at ₹300 will alter the short-term downtrend and take the stock higher to ₹340 and then to ₹364 levels in the medium term.
If you have a medium-term perspective, you can hold the stock with stop-loss at ₹245 and exit at around ₹364. Next long-term resistances are pegged at ₹400 and ₹470 levels.
Only a decisive breakthrough of the significant resistance band between ₹470 and ₹490 can reinforce a long-term bullish momentum and accelerate the stock to ₹550 levels. Conversely, a strong plunge below the immediate base level of ₹250 can drag the stock down to the support zone of ₹210-220. Investors with a long-term perspective can consider averaging at this level with a stop-loss at ₹190.
Can you let me know the short-term trends for the stock of SKM Egg? Also, is it advisable to hold this stock for the long run?
Venkat
SKM Egg Products Export India (₹172.5): Last week, the stock skyrocketed 20 per cent, decisively breaking the resistance level of ₹150. However, it faces a crucial resistance at ₹180 from which it had reversed down in April 2015. Investors with a medium-term horizon can consider taking some profits off the table at this resistance level.
An emphatic breakout can push the stock northwards to ₹200 and then to ₹220 in the medium term.
On the other hand, the stock has key supports at ₹150 and ₹120. A strong fall below ₹120 will strengthen the bearish momentum and drag the stock down to ₹100 or further down. In late 2014, the stock jumped from circuit to circuit; it witnessed a similarly strong decline between April and June, 2015.
As the stock is very volatile, holding it for the long term is not advisable; consider exiting at around ₹180 and switch to a blue-chip stock.
Please advise me on the support and resistance for Eveready Industries for a short to medium term buy.
Sabera Begum
Eveready Industries India (₹289): The stock’s one leg of the long-term uptrend came to an end as it registered an all-time high of ₹374 in July 2015. Since then, the stock has been on a medium-term downtrend.
However, the key long-term support in the band between ₹245 and ₹250 arrested the stock’s decline in late August and early September. After that, the stock bounced back and is in a near-term upmove.
It now faces a key resistance at ₹305 levels. Only a conclusive rally above this resistance will take the stock higher to the next resistance levels of ₹325 and ₹370 levels in the medium term.
But a downward reversal from ₹305 can pull the stock down to test the support band between ₹245 and ₹250.
A decisive breakout of this level will pave the way for a down move to ₹220 and ₹190 in the short to medium term.
In that scenario, investors with a medium-term horizon should exit their long positions and remain on the sidelines.
Send your queries to techtrail@thehindu.co.in
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