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Here are answers to readers’ queries on the performance of their stock holdings.
I purchased Colgate Palmolive at ₹1,050. What are the prospects?
TVS Prakash Rao
Colgate-Palmolive India (₹984.4): The stock of Colgate-Palmolive India took support in the band between ₹790 and ₹800 in March 2016 and again in late May and bounced up. Since then, the stock has been on a medium-term uptrend. While trending up, the stock decisively breached key resistances at ₹850 and then at ₹900. However, it encountered a significant resistance in the ₹1,000-1,020 range in early August.
The stock rose 3.4 per cent last week. But it currently faces some difficulty in surpassing the resistance range mentioned above. An emphatic breakthrough of the resistance can pave way for an up move to ₹1,090-1,100 band and then to new highs over the medium to long term. The long-term trend is up and will remain in place as long as the stock trades above key support at ₹800. Investors with a long-term perspective can consider holding the stock with a stop-loss at ₹780. The medium-term uptrend that is in place will stay as long as the stock trades above ₹900 levels. Strong downward break below ₹900 can alter the medium-term uptrend and pull the stock down to ₹850 initially and then to ₹800. Immediate support is at ₹935. You can hold the stock and consider averaging the stock on an upward reversal from the key support at ₹900 with a stop-loss at ₹890.
I am a long-term investor in Punjab National Bank and IDFC. What is the medium to long-term technicals for these two stocks.
Rajeshwar Reddy
Punjab National Bank (₹144.9): Last week, the stock of Punjab National Bank surged 15 per cent, decisively breaking out of a long-term resistance at ₹130. With this rally, the stock appears to have resumed its medium-term uptrend that commenced in May low at ₹71.
The stock has doubled since then. It trades well above its 50 and 200-day moving averages. However, the long-term trend continues to be downward as long as the stock trades below the trend deciding-level at ₹175. A conclusive breakthrough of this level can push the stock northwards to ₹200 and then to ₹230 in the long run. Investors with a long-term perspective can stay invested with a stop-loss at ₹95. Though the short-term trend is up, the stock currently tests a key resistance at ₹145.
A decisive breach of this barrier can take the stock upwards to ₹165 and ₹175 levels in the medium term.
On the downside, the key supports are at ₹130 and ₹115. Strong fall below ₹100 will mar the medium-term uptrend and pull the stock down to ₹90 and then to ₹80 or even to ₹70 levels in the long term.
IDFC (₹62.9): The stock of IDFC bottomed out in March 2016 after taking support at around ₹37. Since then, the stock has been steadily trending upwards, forming higher peaks and troughs.
The medium as well as short-term trends are up. It has retraced the 50 per cent fibonacci retracement level of the prior downtrend and now tests this level at ₹65. To alter the intermediate-term downtrend, the stock needs to emphatically break this level. Then, the stock can continue its progressing rally to ₹75 and then to ₹90 in the medium-term.
Strong break-out of the significant long-term resistance at ₹90 is required to reinforce the bullish momentum and take the stock of IDFC higher to ₹105 and ₹115 in the long term.
Supports to note are at ₹56, ₹51 and ₹46. Fall below ₹46 will mitigate the uptrend and pull the stock down to ₹42 and then to ₹37 levels.
Send your queries to techtrail@thehindu.co.in
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