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Here are answers to readers’ queries on the performance of their stock holdings.
I am holding shares of Hindalco at ₹140 per share. What is the outlook for the stock.
Gopal Setty
Hindalco Industries (₹83.6): The stock is in a downtrend across all time frames — long, medium and short. However, after recording a multi-year low at ₹67.5 in late September, the stock changed direction. Last week, the stock gained 18 per cent accompanied by above average volume.
The indicators in the daily and weekly charts are showing signs of strength. Nevertheless, the stock faces a key long-term resistance in the range between ₹87 and ₹90.
A strong breakthrough of this hurdle will alter the short-term downtrend and take the stock higher to ₹100 and then to ₹110 in the short to medium term.
You can consider averaging the stock in dips while maintaining a stop-loss at ₹67. Next resistance above ₹110 is at ₹125, which is a significant medium-term resistance.
Strong breakthrough of this level is needed for further rally to ₹140 levels. On the other hand, the stock’s decline can find supports at ₹78 and ₹67-70 band.
Only a conclusive fall below ₹67 will be a threat which can extend the long-term downtrend to ₹60 or even ₹50.
What is the outlook for Granules India and Alembic?
Loganayahi K
Granules India (₹162.4): In July 2015, the stock of Granules India broke out of a key resistance at ₹100 and continued its uptrend. With some volatility, the stock accelerated to new highs.
On Friday, the stock climbed 4.7 per cent and registered a new high at ₹163.5. With this rally, the indicators in the daily and weekly charts have entered overbought levels.
Also, the indicators in the monthly chart are in the overbought territory, indicating a trend reversal possibility. Therefore, investors sitting on reasonable profits can consider taking them off the table and re-entering at lower levels.
A trend reversal can pull the stock down to its key support levels at ₹140 and ₹130. Subsequent supports below ₹130 are at ₹120 and ₹110. Investors with a long-term perspective can hold the stock while maintaining a stop-loss at ₹95 levels.
Alembic (₹42.6): Since registering an all-time high of ₹69.5 in September 2014, the stock has been on an intermediate-term downtrend.
The significant resistance at ₹53 kept the stock under check in July 2015. The stock has been on a medium-term downtrend since then.
A conclusive breakthrough of the immediate resistance at ₹45 can alter this downtrend and take the stock northwards to ₹53. But to alter the intermediate-term downtrend, the stock needs to emphatically breach the level of ₹53 for an upmove to ₹60 or even ₹65 in the long run. Investors with a long-term horizon can stay invested with a stop-loss at ₹35.
A decisive fall below the immediate base level of ₹38 can drag the stock down to ₹30 in the medium term.
Send your queries to techtrail@thehindu.co.in
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