Your Stock Portfolio. HDFC in a long-term uptrend

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

I want to invest for the long-term in HDFC. What is the stock’s outlook for the next twelve months?

Sudhin

Housing Development Finance Corporation (₹1,783.8): The stock of Housing Development Finance Corporation (HDFC) surged 8.6 per cent with good volume last week. This optimism was due to a foreign brokerage firm upgrading the stock to outperform. Better subsidiary valuation, post the Q1 results, triggered this upgrade. Since the January 2017 low at around ₹1,200, the stock has been on an intermediate-term uptrend. Accelerating the uptrend, the stock registered a new high of 1,798 on Friday. The long-term trend is also up for the stock.

The stock trades well above its 21- and 50-day moving averages. Following a sharp rise in the stock price, the daily and weekly relative strength indices have entered the overbought territory, indicating corrective decline is in the offing. Other indicators such as price rate of change are showing signs of weakness.

Thus, you can wait for the corrective decline to the immediate support level of ₹1,700 or even to ₹1,670 or ₹1,600 levels to buy the stock.

Such a corrective decline can bring in fresh buying at lower levels. You can consider buying the stock in declines with a stop-loss at ₹1,570 levels. Resumption of the uptrend can take the stock northwards to ₹1,900 and then to ₹2,000 in the long run. Key supports below ₹1,600 are placed at ₹1,500 and ₹1,450. Only a strong plunge below ₹1,450 will be a threat to the stock’s intermediate-term uptrend.

Can I buy the stock of South Indian Bank at the current levels?

Rahul Nigotiya

South Indian Bank (₹30.3): Since taking support at around ₹17 in late December 2016, the stock of South Indian Bank has been on an intermediate-term uptrend. It breached key hurdles at ₹23 and ₹27 during this rally. However, the stock encountered a key long-term resistance at ₹30 in late June and started a short-term sideways consolidation movement.

Last week, the stock gained 6 per cent with good volume and, once again, tests a key resistance at around ₹30. On the downside, the support level of ₹27 is providing base for the stock.

The weekly indicators and oscillators are showing signs of weakness. A downward break below ₹27 can pull the stock down to ₹25 and then to ₹23 in the medium term.

You can consider waiting and buying the stock in declines with a stop-loss at ₹22. On the other hand, a decisive break above ₹30 will be a positive sign and can be considered as a buying opportunity for the stock, with a stop-loss at ₹25. The stock can trend up to ₹32 once again and a strong rally above this level can push it higher ₹35 or ₹37 levels in the medium to long term.

What is technical view and levels for Shilpi Cable Technologies? I want to buy this stock for the long term

Iqbal Ahmed Khan

Shilpi Cable Technologies (₹34.8) : The stock decisively breached a key support at ₹210 in late April this year and continued to decline. It began to hit the lower circuit thereafter until the stock found support at ₹20 in mid-June this year.

The stock was on a corrective rally, which got capped at ₹57.9 recently.

Near-term trend is down. Key immediate supports are placed at ₹30 and ₹25. Resistances are at ₹37 and ₹40. The long-term trend is down for the stock. Desist taking any positions in the stock as the probability of revival is very low. Investors should avoid the stock.

Send your queries to techtrail@thehindu.co.in

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