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

I bought Eicher Motors shares at around ₹14,000 in 2014. Technically, how is the stock performing?

V Ganapathy

Eicher Motors (₹15,616.2): The stock of Eicher Motors is in a long-term uptrend. However, after registering a new high at ₹21,618 in late July 2015, the stock changed direction and began to decline. Since then, it has been on a medium-term downtrend. For the past two weeks, the stock has been on a steep decline.

It breached a key medium-term support at around ₹17,000 in recent times. Last week, the stock plunged 6.5 per cent with good volume, strengthening the downtrend.

It now trades just above the next key support level of ₹15,500 and there is a possibility of further declines. Therefore, you can consider taking partial profits now and re-entering at lower levels with a stop-loss at ₹13,800. Further fall below ₹15,500 can drag the stock down to ₹14,000 levels in the short term which can provide a base.

An upward reversal from these support levels can take the stock northwards to ₹19,000. Only a decisive breach of this resistance will pave way for an up-move to ₹20,000 or ₹21,600 in the medium term. As long as the stock trades above the trend-deciding level of ₹12,000, its long-term uptrend will be in place.

I am holding shares of JK Tyre at ₹107 per share. What are your views?

Sai Naveen

JK Tyre & Industries (₹92.3): The significant long-term resistance at ₹130 has been limiting the stock of JK Tyre from gaining further since February 2015. In August, the stock started to decline from this resistance level and has been on a medium-term downtrend.

It decisively breached its 50 and 200-day moving average and trades well below these levels. Currently, the stock tests a key support at around ₹90. Strong fall below this level will pave the way for a decline to ₹80 or even ₹65 levels in the medium term. You can consider averaging the stock at lower levels with a stop-loss at ₹60.

To alter the medium-term downtrend, the stock needs to strongly breakthrough the important resistance level of ₹105.

Such a break can take the stock upwards to ₹120 and ₹130. But to strengthen further bullish momentum, the stock has to emphatically move above the long-term resistance level of ₹130. Long-term targets are ₹150 and ₹160 levels.

What is the technical view for the stock of KPIT Technologies from a short to medium perspective?

Iqbal Ahmed Khan

KPIT Technologies (₹154): The stock of KPIT Technologies has been on a medium-term uptrend since registering a 52-week low of ₹85 in June 2015. Last week, the stock surged 7 per cent and closed above a key resistance level of ₹150.

However, the stock has not decisively breached the key resistance level; it appears to be testing it. Further, the indicators in the daily chart are weakening and showing signs of negative divergence, implying that trend reversal may be on the cards. Hence, traders with a short-term view should tread with caution.

A strong tumble below ₹130 will mitigate the short-term uptrend and take it down to ₹120. As long as the stock trades above ₹120, its medium-term uptrend will be in place. An upward resumption from either ₹130 or ₹120 can take the stock higher to ₹170 or ₹180 levels.

An emphatic breakthrough of ₹180 can strengthen the uptrend and take the stock higher to ₹200 or ₹230 in the long run. Investors with a long-term horizon can hold the stock with a stop-loss at ₹105. On the downside, a decisive slump below ₹120 can pull it down to ₹100 and then to ₹90 levels in the medium term.

Send your queries to techtrail@thehindu.co.in

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