Technical Analysis

Indiabulls Housing slopes downwards

Yoganand D | Updated on September 15, 2019 Published on September 15, 2019

A break-out at ₹600 will bring back bullish momentum and take the stock up to ₹810

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

I have shares of Indiabulls Housing at ₹637. What is the short to medium term trend for this stock?

Harish Bale

Indiabulls Housing Finance (₹441.7): Following a strong rally in 2017, the stock of Indiabulls Housing Finance encountered a key resistance in the band between ₹1,400 and ₹1,440 in January 2018.

Since then, it has been in a long-term downtrend. This resistance band capped the rally in 2018. The stock had decisively breached the key supports at ₹1,100 and ₹1,000 in September 2018 and continued to trend down. In April 2019, it failed to go beyond the vital resistance at ₹900 and, subsequently, resumed the downtrend. It has been in a medium-term downtrend since then.

The price action since April appears to be a downward sloping channel or descending channel. The stock now hovers just above the lower trendline. It has a key support at around ₹400. Also, the daily moving average convergence divergence indicator is displaying positive divergence, indicating that trend reversal is on the cards.

There has been an increase in daily volume over the past seven weeks. The upper trendline and a crucial resistance are at ₹600.

A strong break-out of this barrier will bring back bullish momentum and take the stock up to ₹740 and ₹810 over the medium term. You can consider averaging the stock with a stop-loss at ₹390. Inability to move beyond ₹810 will be cue for booking partial profits.

A further rally beyond ₹810 can pave way for an up-move to ₹900 in the long run. An empathic break above this hurdle will alter the long-term downtrend and take the stock up to ₹1,000 and ₹1,100 levels. Key supports below ₹400 are at ₹370 and ₹350.

 

What are the prospects for the stock of CG Power, which I am holding for more than two years?

Sree Devi

CG Power and Industrial Solutions (₹14.2): The stock is in a downtrend across all-time frames — short, medium and long term. It breached a key support at ₹23 this July and continued to trend up.

 

However, recording a multi-year low at ₹8.25 in late August, the stock began to witness a corrective up-move.

Sell the stock in rallies and exit the stock. Investors with a long-term perspective should desist from taking positions. A rally above ₹18 can take it to ₹23. A further break above this level can test resistances at ₹30 and ₹40 over the long term. Supports are at ₹10 and ₹8.25.

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Published on September 15, 2019
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