Your Stock Portfolio. City Union Bank changes direction

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

I bought shares of City Union Bank at ₹110 and MRPL at ₹79. What is the outlook?

Sundeep

City Union Bank (₹155.1): The stock of City Union Bank has been in a long-term uptrend since the early 2016 low of ₹70. However, the stock encountered a key resistance in the band between ₹180 and ₹182 in mid-June 2017 and started to move sideways. It tested this resistance zone again in July and early August, but failed to break above it. Subsequently, the stock started to decline, triggered by negative divergence in the weekly indicators. Last week, it plunged 7.7 per cent, decisively breaching its 21- and 50-day moving average. Moreover, this fall has also breached the medium-term uptrend and an immediate key support at ₹158 levels.

Next significant medium-term support is placed at ₹150, which can be tested in the near term. A conclusive downward break of ₹150 can drag the stock down to ₹140 in the medium term.

Consider booking profits at this juncture as the upside is limited and the stock can remain in the downtrend for a prolonged period. Exit and re-enter at lower levels.

The long-term uptrend will remain in place as long as the stock trades above ₹125. Investors with a long-term perspective can buy at lower levels with a stop-loss at ₹120. Key resistances at ₹170 and ₹180 can cap the stock’s rally. A decisive break above ₹180 is required to strengthen the uptrend and take the stock higher to ₹190 and ₹200 in the long run.

Mangalore Refinery and Petrochemicals (₹118.5): The stock of MRPL slumped 8.6 per cent last week, after testing a key resistance at ₹140. This key resistance at ₹140 has limited the stock’s rally in May and also in early August. Last week, the stock fell sharply with a gap-down on Thursday, emphatically breaching a key support at ₹125 as well as its 50-day moving average.

Currently, the stock tests its long-term uptrend support at ₹117. A strong break below this level can pull the stock down to ₹112 and then to ₹100 in the short to medium term. Further fall below ₹100 can drag the stock down to ₹90, which is a significant long-term base.

You can consider taking profits off the table in this stock as well. Investors with long-term perspective can stay invested with a stop-loss at ₹88. Strong rally beyond ₹130 can push the stock higher to ₹140 or ₹150 levels.

What are the medium-term prospects for the stock of Bombay Dyeing?

Laxmanan R

Bombay Dyeing & Manufacturing Company (₹70.7): Key long-term support at around ₹40 provided base for the stock of Bombay Dyeing in February 2016 and again in last November. Since then, the stock has been in an intermediate-term uptrend.

On the upside, significant long-term resistance in the band between ₹90 and ₹94 is limiting the stock’s rally.

The stock tested this resistance band in April and once again in July this year and began to decline.

Witnessing selling pressure, the stock plummeted 13 per cent last week breaching a key support at ₹75.

The stock now tests ₹67, which is the next key support and the 50 per cent fibonacci retracement level of prior uptrend.

Hence, investors with a long-term view can remain invested as long as the stock trades above ₹67 levels with a stop-loss at ₹65. Next supports below ₹67 are pegged at ₹62 and ₹55.

Immediate resistances are at ₹85 and in the ₹90-94 band. Conclusive break above ₹94 can take the stock northwards to ₹100 and ₹110 levels in the long run.

Send your queries to techtrail@thehindu.co.in

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