Technical Analysis

Clariant Chemicals forms a key base

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

The stock is on the brink of trend reversal as the support in the ₹560-600 band has arrested its fall

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

Should I hold or sell Clariant Chemicals purchased at around ₹700 for the long term.

Brij Mohan Lal

Clariant Chemicals (₹589.8): The stock of Clariant Chemicals (India) has been in a long-term downtrend since encountering a key resistance at around ₹1,040 in April 2015. Intermediate-term trend is also down. However, significant long-term support in the ₹560-600 band arrested the stock's decline in early August this year and it continues to test this support by moving sideways.

The positive divergence in the daily and weekly indicators can trigger a trend reversal in the stock and take it higher to ₹650 levels. You can average the stock at current level with a fixed stop-loss at ₹550.

The stock can trend upwards and test an immediate resistance at ₹650 in the short term. Further break above this level can push the stock higher over the medium-term to ₹685 or ₹700. To alter the intermediate-term downtrend, the stock needs to emphatically break above the significant resistance level of ₹700.

Next medium-term targets are ₹740 and ₹760 levels. Long-term targets are ₹800 and ₹840. Investors with a long-term perspective and high-risk appetite can consider buying the stock with a stop-loss at ₹550. On the other hand, key supports are pegged at ₹560 and ₹550 levels. Strong tumble below ₹550 may strengthen the long-term downtrend and pull the stock down to ₹500. In that case, desist buying the stock.

What is the outlook for the stock of Supreme Petrochem bought at ₹370 per share.


Supreme Petrochem (₹378.1): After forming a strong base above the key support level of ₹100 during late 2015 and early 2016, the stock of Supreme Petrochem started to trend upwards. Since then, it has been in a long-term uptrend and has become a multi-bagger for the investors. Nevertheless, after recording an all-time high of ₹447 in April this year, the stock reversed lower and has been in an intermediate-term downtrend. Significant resistance at ₹400 capped the upside in late September this year.

With the weekly and monthly indicators and oscillators showing signs of weakness, the stock could encounter resistance at ₹400 and continue to decline. Therefore, you can consider taking profits off the take and re-purchasing at lower levels. A fall below the immediate support band between ₹350 and ₹360 can pull the stock down to ₹320 and ₹300 levels in the medium-term. Resistances above ₹400 are at ₹415 and ₹440. Investors with a long-term horizon can stay invested with a stop-loss placed at ₹270 levels.

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Published on October 08, 2017
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