Technical Analysis

Indraprastha Gas re-bounds from a key base

Yoganand D | Updated on July 31, 2018 Published on July 29, 2018

An emphatic break above ₹300 can take the stock up to ₹340 over the long term

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

I want to buy Indraprastha Gas and V-Guard Industries for the long term. What is the technical outlook for these two stocks?

Y Suneeta

Indraprastha Gas (₹294.9): Following a medium-term downtrend from the 52-week high of ₹344 (adjusted) in early January 2018, the stock found support in the band between ₹242 and ₹252 in late May. It re-tested this support band in late June and changed direction, triggered by a positive divergence in the daily and weekly indicators. Since then, the stock has been in a nascent uptrend. While trending up, it breached the key resistances at ₹265 and ₹280. The stock has surged 16.5 per cent with good volume over the last two weeks.


However, the stock now tests a significant resistance at ₹300 and its 200-day moving average. Hence, there could be a near-term corrective decline which medium-term investors can consider as a buying opportunity and accumulate the stock with a stop-loss at ₹240. An emphatic break above ₹300 can take it northwards to ₹320 and ₹340 over the medium-to-long term.

Conversely, a strong below the key support level of ₹242 can bring back selling pressure and drag it lower to ₹225 and ₹220 in the long run. The long-term uptrend will remain in place as long as the stock trades above ₹190. Long-term investors can stay invested with a stop-loss at ₹180 levels.

V-Guard Industries (₹213.8): The stock gained 3.5 per cent with an above average volume on Friday, decisively breaching a key resistance at ₹206 and 50-day moving average as well. For the week, the stock had surged 10.6 per cent conclusively, breaking above a long-term resistance level of ₹200. But a key resistance is ahead at ₹220.



An emphatic breakthrough of this barrier can take the stock up to ₹235 in the short term. A strong rally beyond ₹235 can lift the stock to ₹250 levels in the medium term. An eventual break above the medium-term hurdle at ₹250 will reinforce the long-term uptrend and take the stock to new highs.

On the other hand, a fall below the immediate support level of ₹200 can drag the stock down to ₹190 and ₹180 levels in the short-to-medium term. However, a plunge below the significant long-term support level of ₹180 will begin to threaten the primary uptrend and drag the stock down to ₹170 or ₹160 levels.

Long-term uptrend will remain in place as long as the stock trades above ₹150 levels. Investors with a long-term horizon can stay invested with a stop-loss at ₹140 levels.

Send your queries to

Published on July 29, 2018

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.