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Here are answers to readers’ queries on the performance of their stock holdings.
Can I buy South Indian Bank at the current level? What is the outlook for the stock compared to Federal bank?
Deepak Jose
South Indian Bank (₹29.3): South Indian Bank has been in a long-term uptrend since taking support at ₹14.8 in early 2016. While trending up, the stock emphatically breached a key resistance at ₹23 in April 2017 and continued its uptrend. However, significant long-term resistance in the band between ₹30 and ₹32 halted the stock’s rally in late July and again during last week. After testing this resistance band, the stock retreated, falling 5.6 per cent on Friday. The near-term outlook is bearish for the stock. A fall below the immediate support level of ₹27.5 can pull the stock down to ₹26 and ₹25 levels in the short term.
Further fall below ₹25 can drag the stock down to ₹23, which is a key long-term support level. You can wait and consider buying the stock below ₹26 while maintaining a fixed stop-loss at ₹22. An upward reversal from the key supports can take the stock higher to ₹32 in the short to medium term. Strong break above ₹32 will strengthen the long-term uptrend and take the stock higher to ₹35 and ₹37 levels.
Long-term uptrend will be in place as long as the stock trades above ₹23. Key supports to note below ₹23 are at ₹21.5, ₹20 and ₹18.
Federal Bank (₹113.7): Even the stock of Federal Bank has been on a long-term uptrend since early 2016. Breaking a key long-term hurdle at ₹80 in February 2017, the stock continued its uptrend. This uptrend got accelerated in late April and early May this year. But the stock met with a key resistance at ₹120 in May and has been facing difficulty in surpassing this hurdle. Last week, the stock tested this resistance and reversed direction. It fell four per cent with extraordinary volume on Friday, witnessing selling pressure and has breached immediate support at ₹116 level.
Short-term outlook will remain bearish as long as the stock trades below ₹120. A strong fall below the next support level of ₹110 can pull the stock down to ₹105 and ₹100 in the short term.
A conclusive fall below the significant support level of ₹100 will be a threat to the medium-term uptrend and drag the stock down to ₹90 level.
Further fall can pull the stock down to ₹80 in the medium to long term.
On the other hand, strong upward breakthrough of ₹120 can strengthen the stock’s long-term uptrend and take it higher to ₹130 and ₹140 levels.
I am holding shares of Sunil Hitech at ₹16.86. Can I hold them long term or sell partially?
AV Vijaya Sankar
Sunil Hitech Engineers (₹13): Following a sharp rise in the months of September and October 2016, the stock recorded a new high at ₹23.4. But the stock changed direction subsequently and started to decline. Since December 2016, the stock has been in a sideways consolidation phase in the band between ₹11 and ₹15. An emphatic fall below the lower boundary of ₹11 can pull the stock down to ₹10 and ₹8.7 in the medium term. Exit the stock in rallies with a fixed stop-loss. Immediate resistance at ₹15 can limit the upside for the stock. Key resistances beyond ₹15 are at ₹16.5 and ₹19.
Send your queries to techtrail@thehindu.co.in
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