Technical Analysis

Good times ahead for Titan

Yoganand D | Updated on January 17, 2018 Published on July 17, 2016

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BL18TITAN

COIMBATORE, TAMILNADU, 22/12/2013: Titan Raga, Pearl and Purple, watches on display at Brookfields Mall, in Coimbatore, Tamilnadu. PHOTO: S. SIVA SARAVANAN   -  The Hindu

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A break-out of the resistance zone between ₹435 and ₹445 will lift the stock up



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

I am holding shares of Titan Company bought at an average price of ₹378 per share. Please suggest short and medium term outlook.

Vamsi

Titan Company (₹417.5): The stock of Titan Company is in an uptrend across all-time frames — long, medium and short-term. Significant long-term support in the band between ₹300 and ₹310 arrested the stock's decline that started from the February 2015 peak at ₹448. This support band again provided base for the stock this February and helped it reverse direction.

Since then, the stock has been on a medium-term uptrend. In April, the stock emphatically breached its moving average compression at around ₹345, confirming the trend reversal. Later, the stock broke through a key medium-term resistance at ₹380 by surging 12.6 per cent in June. Continuing the uptrend, the stock advanced 4 per cent last week.

However, the stock experiences selling pressure near its key long-term resistance zone between ₹435 and ₹445, from which it began its fall in February 2015. Therefore, investors can consider taking partial profits off the table if the stock faces difficulty in surpassing this resistance zone.

Moreover, the daily price rate of change indicator and relative strength index are displaying negative divergence implying trend reversal. Having said that such a reversal could be a corrective phase and the stock can find support at ₹400 or ₹380 in the short term.

Only a decisive fall below ₹380 will mar the short-term uptrend and drag the stock further down to ₹370 or ₹350 levels in the medium term. Long-term trend is up. A strong break-out of the key resistance zone between ₹435 and ₹445 will strengthen the long-term uptrend and take the stock higher to ₹470 and then to ₹500 levels in the long run.

You can consider taking partial profits at the resistance zone and re-entering at lower level with a stop-loss at placed at ₹370. Investors with a long-term perspective can hold the stock with a stop-loss at ₹310.

What are the long-term prospects for Camlin Fine Sciences and PTC India? I have bought these stocks at an average price of ₹106 and ₹74 respectively.

Yogesh Kumar Bhawsar

Camlin Fine Sciences (₹91.6): The stock had a good run in 2014 and early 2015 and turned out to be a multi-bagger. However, since recording a new high at ₹128 in June 2015, the stock started to decline and has been on an intermediate-term downtrend.

It encountered a key resistance at ₹105 in April and has been on medium-term downtrend since then. Last week, it met with a resistance — which is also the 200-day moving average at ₹96 and resumed its downtrend by declining 4.8 per cent. A fall below the immediate support at ₹89 can strengthen the downtrend and drag the stock down to ₹80 in the medium term. Significant long-term support at ₹80 can provide base.

A conclusive breakthrough of the immediate resistance at ₹96 can take the stock higher to ₹105. Strong rally beyond ₹105 is needed to reinforce the bullish momentum and take the stock northwards to ₹120 and then to ₹130 in the long term. You can consider averaging the stock in declines with a stop-loss at ₹77.

PTC India (₹79.5): In early June, the stock decisively broke out of its intermediate-term sideways movement in the band between ₹55 and ₹70. It’s up-move encountered a significant resistance at ₹80 (also the long-term resistance) recently.

Conclusive break of this resistance can strengthen the ongoing short-term uptrend and take the stock higher to ₹89 and then to ₹100 in the coming months. Key supports at ₹75, ₹70 and ₹66 can cushion the stock in corrective declines.

But a plunge below the vital base at ₹62 will mitigate the uptrend and pull the stock down to ₹55 or even to ₹50 in the medium term. Hold the stock with a stop-loss at ₹67.

Send your queries to techtrail@thehindu.co.in

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Published on July 17, 2016
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