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Here are answers to readers’ queries on the performance of their stock holdings.
What is the technical outlook for eClerx Services? Can I buy at current levels?
Sudhin B
eClerx Services (₹938.4): The stock of eClerx Services has been in a long-term downtrend since recording a new high at ₹1,775 in August 2016. The stock has been forming lower peaks and troughs since then.
Following a corrective rally in the second half of 2017, it encountered a key resistance at ₹1,600 in January 2018 and resumed the downtrend.
While trending down, the stock had emphatically breached the key long-term support at ₹1,200 in August 2018. This level had turned into a crucial resistance for the stock and limited the upside last November. After facing difficulty in surpassing the key resistance band between ₹1,180 and ₹1,200 in March 2019, the stock continued to trend downwards once again.
The stock has slipped below a key support at ₹1,000 after the ex-date of buyback of shares in early May, and it continues to move sideways in a narrow band.
The daily relative strength index and price rate of change indicator show positive divergence and there is possibility of a trend reversal. The stock is poised above a key long-term support at ₹900.
An upward reversal can take the stock up to ₹1,000 in the short term. A strong break above ₹1,000 will push the stock higher to ₹1,100 and ₹1,200 over the medium term. To alter the medium-term downtrend, the stock needs to conclusively break above ₹1,200 levels. Such a break can take the stock up to ₹1,300 and ₹1,400.
On the other hand, a tumble below ₹900 will reinforce the downtrend and drag the stock down to ₹800 and then to ₹650 in the long term. Investors should avoid taking fresh positions on a fall below ₹900. Investors with a long-term perspective can consider buying with a stop-loss at ₹880 levels.
I bought shares of ICICI Securities in the IPO. What is the outlook for the stock?
Kanagu Raj
ICICI Securities (₹231.7): Since listing in April 2018, the ICICI Securities stock has been in a long-term downtrend, forming lower troughs and peaks. However, it found support in the ₹190-200 band this February and began to trend up. After encountering resistance at ₹265, the stock again took support in this band and began to move higher in late May.
Witnessing buying interest, the stock has gained 16 per cent in the last two weeks, with good volumes. Consider averaging the stock at current levels with a long-term stop-loss at ₹185. A strong break above the key resistance at ₹255 will strengthen the uptrend and take the stock up to ₹285 and ₹300.
An emphatic rise above the resistance at ₹300 is needed to alter the downtrend and take the stock up to ₹330 and ₹365. Inability to move beyond ₹255 will keep the stock consolidating sideways between ₹200 and ₹255. A decisive fall below ₹190 will bring back selling pressure and drag the stock to ₹170.
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