Technical Analysis

Force Motors is going strong

Yoganand D | Updated on January 22, 2018



The uptrend will continue as long as the stock trades above the support level of ₹1,400

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

Please let me know the medium-term trend for Force Motors and BEL (Bharat Electronics)

Vedavyas L Pai

Force Motors (₹2,275.6): Since bottoming out at the August 2013 low of ₹225, the stock has been on a long-term uptrend. The intermediate-term trend is also up for the stock.

However, the short-term trend has been down since recording a new high at ₹3,288 in early August 2015. A fall below the immediate support at around ₹2,000 can pull the stock down to the next support band between ₹1,700 and ₹1,720 in the short to medium term.

As long as the stock trades above the ₹1,700-1,720 support zone, the intermediate-term uptrend will be in place. An upward resumption from these supports can take the stock higher to ₹2,400, ₹2,600 and then to ₹2,900 levels. Subsequent key resistance is at ₹3,150.

The long-term uptrend will continue as long as the stock trades above the significant support level of ₹1,400. Before this level, the stock has a key support at ₹1,575. Investors with a long-term perspective can hold the stock with a stop-loss at ₹1,350.

Bharat Electronics (₹1,089.3): In February 2015, the stock of Bharat Electronics (BEL) encountered significant resistance in the zone between ₹1,350 and ₹1,380 levels.

The stock has been on an intermediate-term sideways consolidation phase in the wide band between ₹1,000 and ₹1,380. In early August, the stock changed direction after testing the key resistance band between ₹1,350 and ₹1,380, which is the upper boundary. Since then, the stock has been on a short-term downtrend within the sideways range.

Currently, the stock tests its 200-day moving average. Strong breach of this average line can pull the stock down to the lower boundary at ₹,1000 levels in the coming weeks; this level can provide a temporary base for the stock.

Further fall below ₹1,000 will strengthen the downtrend and drag the stock down to ₹900 or even to ₹850 levels in the medium term.

The long-term uptrend that has been in place since the early 2014 low of around ₹300 will be under threat only if the stock slips below the key base level of ₹850. Next significant supports are at ₹800 and ₹750 levels. On the other hand, a decisive breakthrough of the immediate resistance at 1,200 can take the stock higher to ₹1,380. Strong break-out of the upper boundary can push the stock upwards to new highs.

What is the technical view on the Lovable Lingerie stock for the short to medium term?

Sabera Begum

Lovable Lingerie (₹269.1): The stock of Lovable Lingerie has been on a long-term downtrend from its September 2011 peak of ₹636.

Both medium and short-term trends are also down for the stock. However, it has a significant long-term support in the range between ₹220 and ₹240 from which it reversed higher in March 2013 and August 2013. Last month, the stock tested this support range and is attempting to reverse upwards.

Within the long-term downtrend, the stock has been moving sideways over the past four months in the broad band between ₹220 and ₹310. Investors with a long-term horizon can take exposure with a stop-loss at ₹220 levels.

A strong rally above the immediate resistance level of ₹310 will alter the short-term downtrend and take the stock northwards to ₹350 levels. Next key resistances are at ₹380 and ₹410 levels.

An emphatic rally above the important resistance level of ₹430 is required to alter the long-term downtrend and take the stock higher to ₹480 and ₹500 levels in the long run.

Conversely, a plunge below ₹220 can see the stock recording new lows in the medium term.

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Published on September 20, 2015
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