Your Stock Portfolio. Hindustan Unilever in consolidation mode

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

What is the medium as well as short-term outlook for the stocks of Hindustan Unilever and Jubiliant Food?

Roshan Mayani

Hindustan Unilever (₹803.8): The stock of Hindustan Unilever witnessed a sharp rally in January 2015 and encountered a key resistance in the band between ₹950 and ₹970. Since then, it has been on a sideways consolidation phase in the wide band between ₹770 and ₹950.

The upper boundary at ₹950 capped the stock's upside in early September this year. Subsequently, the stock changed direction and has been on a medium-term downtrend. It can extend its downtrend and test the key support in the band between ₹750 and ₹770 in the short term. Going forward, the possibility of the stock breaking this support band is high as the weekly and monthly indicators are weakening and are negatively biased.

Such a breakthrough can pull the stock down to ₹700 and then to ₹650 level where it can find support in the medium term.

Next key supports below ₹650 are placed at ₹600, ₹580 and ₹550 levels. The long-term uptrend will be intact as long as the stock trades above the key support at ₹550.

Investors with a long-term perspective can stay invested with a stop-loss at ₹530. An upward reversal from the immediate support band between ₹750 and ₹770 will keep the sideways consolidation phase intact. Immediate resistance is at ₹830.

The stock needs to decisively move beyond the next key resistance at ₹870 to alter the medium-term downtrend. Then, it can trend upwards to ₹900 and ₹950 in the medium to long term.

Jubilant FoodWorks (₹884.4): Ever since recording a new high at ₹1,984 in July 2015, the stock of Jubilant FoodWorks has been on an intermediate-term downtrend, forming lower peaks and troughs.

Though the key long-term support in the band between ₹950 and ₹970 halted the stock's decline in February and again in September, it failed to lend support this time around.

The stock's ongoing fall has emphatically breached the key support band and reinforced the downtrend.

Moreover, with the recent plunge below the key support band, the long-term trend has altered down.

Medium as well as short-term trends are also down. Significant resistance in the ₹950-970 band can limit the upside for the stock.

Following a minor corrective rally to this resistance, the stock can resume its downtrend and test the support at ₹800 and then at ₹700 in the medium term. Only a strong up-move beyond ₹970 can change the short-term downtrend and take the stock higher to ₹1,000.

Next resistances are at ₹1,150, ₹1,200 and ₹1,300. To alter the medium and intermediate-term downtrend, the stock needs to trend above ₹1,300 and ₹1,400 respectively.

Investors with a long-term horizon can consider buying the stock in declines with a stop-loss at ₹670 levels. Long-term targets are ₹1,500 and ₹1,650 levels.

I bought shares of Rajesh Exports at ₹488. What is its outlook?

Rangaiah Kota

Rajesh Exports (₹447.9): The stock witnessed a strong rally in 2015 but encountered a key resistance at ₹740 this January and reversed direction.

Since then, it has been on an intermediate-term downtrend. Key support around ₹430 has been providing base for the stock since late June.

Currently, the stock trades above this base level, with a negative bias. An emphatic breakthrough will strengthen the downtrend and pull the stock down to ₹400 and ₹370. Consider exiting the stock in corrective rallies and cut the loss. Significant resistances at ₹460, ₹480 and ₹500 can limit the stock's upside. Strong rally beyond ₹580 is needed to alter the intermediate-term downtrend and take the stock to ₹650.

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