Technical Analysis

Hero MotoCorp is poised above a key base

Yoganand D | Updated on April 28, 2019 Published on April 28, 2019

A fall below ₹2,500 can drag the stock down to ₹2,300 and ₹2,200 in the medium term

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

Can I buy Hero MotoCorp at the current price?

TVS Prakash Rao

Hero MotoCorp (₹2,604.1): The stock of Hero MotoCorp was on a long-term uptrend since taking support at around ₹1,450 in 2013 and it recorded a new high at ₹4,200 in August 2017. Subsequently, it changed direction and has been in an intermediate-term downtrend. The medium-term trend is also down for the stock.

In December, the stock encountered a key resistance at ₹3,360 and resumed the downtrend. But a significant support in the ₹2,500-2,560 band has been providing base since January this year. The stock had tumbled almost 5 per cent, witnessing selling pressure in the previous week. It currently hovers above the significant support band.

 

Both the daily and the weekly indicators are showing signs of weakness. An emphatic plunge below ₹2,500 can drag the stock down to ₹2,300 and ₹2,200 in the medium term.

Next key long-term support is placed at ₹2,200, which can cushion the stock. An upward reversal from this support is possible.

Subsequent support below ₹2,200 is at ₹2,000. You can wait and consider buying the stock at around ₹2,300 with a long-term stop-loss at ₹2,000.

On the upside, a decisive rally above the immediate resistance at ₹2,750 can take the stock up to ₹2,900 and ₹3,000 levels. An emphatic break above ₹3,000 will alter the medium-term downtrend and take it up to ₹3,200 and ₹3,400 in the medium term.

To alter the intermediate-term downtrend the stock needs to decisively move above the vital resistance in the ₹3,500-3,550 band.

Such a break can take it further higher to ₹3,800 and ₹4,000 over the long run. Investors with a long-term perspective can hold the stock with a stop-loss at ₹2,000.

I want to buy the share of Amara Raja. What should be my target over the next one to three years?

Sudhin Bathija

Amara Raja Batteries (₹667.5): The stock of Amara Raja Batteries is trending down and currently tests a key long-term support in the ₹650-665 band. A strong tumble below ₹650 will reinforce the downtrend that has been in place since the stock encountered a key resistance at ₹1,050 in 2016.

 

The medium as well as short-term trends are down for the stock. A decline below ₹650 can drag the stock down to ₹600 and ₹550 over the medium term. You can consider buying at lower levels with a long-term stop-loss at ₹540. To alter the short-term downtrend, the stock needs to decisively break above ₹730. Next key resistances above ₹730 are placed at ₹780 and ₹800.

A further rally above ₹800 will change the medium-term downtrend and take the stock higher to ₹850 and ₹900 levels. It needs to conclusively move above ₹900 to bring back bullish momentum and a rally to ₹950 and ₹1,000 is then possible over the long term.

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Published on April 28, 2019
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