Here are answers to readers’ queries on the performance of their stock holdings.
I have shares of JSW Energy & Hindustan Zinc. I want to buy some more shares of these two companies. Can you brief me on the technicals of these companies.
Raajesh Reddy
JSW Energy (₹83.1): The stock of JSW Energy found support at around ₹60 in August 2015 and February 2016 and reversed upwards on both occasions. Since this February, it has been on a medium-term uptrend.
A key long-term resistance at ₹74 was emphatically breached with the stock surging 16 per cent in the first week of June, extending its up-move. It trades well above its 50- and 200-day moving averages.
However, the stock faces a significant resistance at ₹85 that occurs at the 38.2 per cent Fibonacci retracement of its prior downtrend that commenced in March 2015. An emphatic breakthrough of the immediate resistance at ₹85 can strengthen the uptrend and take the stock higher to ₹93 in the short term.
To alter the intermediate-term downtrend, the stock needs to conclusively breach the key resistance as well as 50 per cent retracement level at ₹93. Such a break-out can pave the way for an up-move to ₹105 and then to ₹120 in the long term.
You can make use of corrective declines to accumulate the stock while maintaining a stop-loss at ₹69. Strong fall below ₹79 can pull the stock down to ₹74 in the short term.
But a conclusive fall below ₹74 will mar the uptrend and drag the stock down to ₹70 and then to ₹65 levels. The stock has a significant long-term support at around ₹60 which can cushion the stock on a decline below ₹65.
Hindustan Zinc (₹177.4): Following a sharp fall, the stock took support at around ₹110 in August 2015 and reversed direction. It has been on an intermediate-term uptrend since then. While trending up, it has emphatically breached key resistances at ₹155 in late March and continued its upward journey. It is in an uptrend across all time frames — long, medium and short-term. Gaining bullish momentum, the stock climbed 4.5 per cent last week.
However, it faces a key resistance at ₹180. The short-term outlook is bullish for the stock.
A decisive breach of this barrier can push it higher to ₹200 and ₹220 in the short to medium term. Strong decline below the immediate support at ₹168 can pull it down to ₹160 in the short term.
Further fall below ₹160 will mitigate the short-term uptrend and pull the stock down to ₹155 or ₹145 thereafter. You can also accumulate the stock on declines while maintaining a long-term stop-loss at the level of ₹140.
I have shares of Bata bought at ₹520. Should I hold or book profits?
R C Bhatia
Bata India (₹549.1): Significant resistance in the band between ₹600 and ₹620 limited the stock's rally in August 2015 and May 2016.
The stock continues to be in an intermediate-term downtrend that started from the January 2015 peak at ₹747. Nevertheless, a medium-term uptrend that began from this January low at ₹438 is still in place.
A conclusive break through the aforesaid resistance band will alter the downtrend and take the stock up to ₹650 and ₹670 levels in the medium term. Further rally beyond ₹670 can take the stock to ₹700 and ₹720 in the long run.
Having said that, a slump below the immediate support at ₹520 will pose a threat to the uptrend and pull the stock down to ₹500 and then to ₹460 in the medium term. Investors with a medium-term view can hold the stock with a stop-loss at ₹510.
Send your queries to techtrail@thehindu.co.in
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.