Here are answers to readers’ queries on the performance of their stock holdings.
What are the medium-term prospects for CARE Ratings and Avadh Sugar & Energy. Is entry advisable at current prices?
Vasudeo Pat
CARE Ratings (₹1,362.5): On Friday, the stock of CARE Ratings fell 2 per cent, decisively breaching a key support at ₹1,400 levels. Moreover, in the week before, the stock tumbled 3.7 per cent, emphatically breaking below the significant medium-term support level of ₹1,450.
This has strengthened the stock’s intermediate-term downtrend that has been in place from the July high of ₹1,800. In early November, the stock encountered a key resistance at ₹1,550, after retracing 50 per cent fibonacci retracement level of the prior downtrend and continued to decline.
Since then, the stock has been in a short-term downtrend. While trending down, the stock emphatically breached its 50 and 200-day moving average and now trades well below them.
Short and medium-term outlook is bearish for the stock. It may continue to trend down and test support at ₹1,300 in the ensuing weeks.
A conclusive plunge below this key support level will mar the long-term uptrend and drag the stock down to ₹1,250 and ₹1,200 levels in the long term. Key supports at ₹1,200 and ₹1,100 can provide base for the stock. You can wait and consider buying the stock on an upward reversal from the key base level of ₹1,300. Such an upward reversal can take the stock higher to ₹1,400 levels. A decisive upward breakthrough of ₹1,450 is required to alter the short-term downtrend and take the stock northwards to ₹1,500 and ₹1,550 levels.
Only a strong rally beyond ₹1,550 will alter the intermediate-term downtrend and take the stock higher to ₹1,600 and then to ₹1,700.
Avadh Sugar & Energy (₹1,362.5): The stock has been trending higher from July’s low of ₹420. However, it met with a key resistance at ₹1,300 in early November and started to move sideways. The stock is moving from one circuit to another with very low volume, indicating high risk. A strong tumble below the immediate support level of ₹1,100 can pull the stock down to ₹1,000. Avoid buying this stock.
I have shares of IDFC Bank bought at ₹63.97. Should I accumulate or book loss?
Murugesan M
IDFC Bank (₹54.7): The stock has been in a long-term downtrend since recording a new high of ₹83 in September 2016.
But it found support at ₹53 in August 2017 and started to trend sideways in the ₹53-₹62 thereafter.
The stock encountered resistance at ₹62 recently and began to decline.
A decisive plunge below the key immediate support level of ₹53 can pull the stock down to ₹50 and then to ₹48 in the medium term. Next key support is in the ₹45-₹46. You can wait and consider averaging the stock at lower levels with a stop-loss at ₹44.
An upward reversal from the immediate support can keep the sideways range intact and take the stock higher to ₹59 and ₹62 levels.
Strong breakthrough of ₹62 can push the stock northwards to ₹65, ₹67 and then to ₹70 levels in the medium term.
Send your queries to techtrail@thehindu.co.in
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