Here are answers to readers’ queries on the performance of their stock holdings.
I bought shares of Dewan Housing Finance Corporation Ltd (DHFL) at ₹305 and Sintex Plastics at ₹62. Should I average them at current prices. What are the long-term prospects for these stocks?
Rajeev Kumar
Dewan Housing Finance Corporation (₹232.4): The stock of DHFL encountered a key long-term resistance in the ₹670-680 band in August 2018. After testing this resistance in early September, it changed direction and began to decline. In late September, the stock nose-dived on speculation about a liquidity crisis in the company, breaking through the key supports at ₹500 and ₹400. Medium-term trend is down. However, the stock found support at ₹176 in late September and started to move up, triggered by positive divergence in the daily indicators. Since then, it has been on a sideways consolidation phase in a wide range between ₹180 and ₹275. The stock faces key resistances ahead at ₹250 and ₹275.
A conclusive break above ₹275 will strengthen the up-move and take the stock up to ₹300 and ₹320 levels in the medium term. A further rally above ₹320 can accelerate the stock northwards to ₹350 and to ₹400 in the long term. Immediate supports are placed at ₹200 and ₹180.
A decisive fall below ₹180 can bring back selling pressure and pull the stock lower to ₹155 and ₹140 levels in the medium term. You can consider averaging the stock at current levels with a stop-loss at ₹190 levels. A strong move beyond ₹450 is required to alter the medium-term downtrend. Subsequent targets are ₹500 and ₹550.
Sintex Plastics Technology (₹23): The stock is on a downtrend across all time-frames. Since listing in August 2017, it has been trending down. It now trades near the 52-week low of ₹22.6 recorded on November 21. There has been an increase in daily volume over the past three weeks.
Both the daily and weekly relative strength indicators hover in the oversold territory. A strong rally above the immediate resistances at ₹25 and ₹26.5 is needed to show signs of recovery. An emphatic break above the key resistance level of ₹30 can bring back buying interest and take the stock to ₹35 and ₹37 in the medium term.
You can consider averaging the stock on a strong rally above ₹30 with a stop-loss at ₹25. Key resistances above ₹37 are placed at ₹40 and ₹44. Only a strong rally beyond ₹75 will alter the long-term downtrend. But a fall below the immediate support at ₹22 can extend the downtrend to ₹20 and ₹18 in the short term.
I bought Borosil Glass Works at ₹335 with a medium-term prospective. Can I hold or sell it on rally?
Promod Joshi
Borosil Glass Works (₹240.4): After a sharp rally in early August, the stock of Borosil Glass Works recorded a new high at ₹397.9. It reversed direction subsequently and has been on a medium-term downtrend since then. But it currently tests a key medium-term support at ₹240. Indicators in the daily chart hover in the negative territory.
A downward break of ₹240 can drag the stock down to ₹225 and ₹200 in the short term. Consider exiting the stock on rallies and re-entering at lower levels with a stop-loss at ₹190. Key resistances are at ₹275 and ₹300 levels. A strong up-move beyond ₹320 is required to take the stock higher to ₹345 and ₹38 levels over the long run.
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