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Here are answers to readers’ queries on the performance of their stock holdings.
I bought the stocks of Just Dial at ₹1,140 and Info Edge at ₹870. Should I hold or sell?
TVS Prakash Rao
Just Dial (₹818.8): Since registering a new high at ₹1,894 in August 2014, the stock has been on a long-term downtrend. Medium- and short-term trends are also down for the stock.
In August, the stock emphatically broke through a key support band that lies between ₹1,000 and ₹1,100 and marked a 52-week low at ₹749.
The stock hovers around this level. The indicators and oscillators in the daily and weekly charts feature in the bearish zone backing the downtrend.
The stock can break the immediate support at ₹749 and touch around ₹600 in the medium term. Therefore, you can wait and average the stock at a lower level with a stop-loss at ₹585.
An upward reversal from the long-term base zone between ₹600 and ₹620 can take the stock northwards to ₹900 and then to ₹1,000.
To alter the long-term downtrend, the stock needs to decisively rally above ₹1,300.
Such a break will give long-term targets of ₹1,400 and ₹1,500 levels. On the other hand, a fall below ₹600 can pull the stock to new lows.
Info Edge India (₹739.7): Following some whipsaws in November 2014, the stock has been consolidating sideways in a broad band between ₹700 and ₹930. The stock tested the upper boundary in late July and started to decline. Since then, it has been in a medium-term downtrend within the range.
The stock trades well below its 50 and 200-day moving averages. Moreover, the long-term uptrend that has been in place from late 2013, from around ₹286, is now losing strength. An emphatic fall below the lower boundary at ₹700 will intensify the downtrend and pull the stock down to ₹650.
Only a further fall below ₹650 can drag the stock lower to ₹550 levels in the medium to long term.
You can consider holding the stock and averaging at lower levels with a stop-loss at ₹540 levels.
An upward reversal from the key support levels can take the stock higher to ₹800 and then to ₹930 in the long run. The stock needs to decisively break the resistance at ₹930, before it can move higher to ₹1,000 levels.
What should I do with Lakshmi Vilas Bank bought at ₹97?
TS Jaganath Rayan
Lakshmi Vilas Bank (₹72.7): The stock of Lakshmi Vilas Bank has significant long-term resistance in the band between ₹104 and ₹107, from which it reversed in early 2008 and September 2010. This resistance kept the stock’s rally under check in April 2015. You have purchased almost near this long-term resistance area. After testing this resistance zone, the stock reversed direction, triggered by negative divergence. Since then, the stock has been on an intermediate-term downtrend.
In late July, the stock conclusively breached its moving average compression around ₹92. The short-term trend is also down.
The stock trades just above a key long-term base level at ₹68. It can pause around this support level and reverse higher.
But a strong fall below ₹68 will find support at ₹60 and then at ₹55 in the medium term.
You can consider averaging the stock at lower levels with a stop-loss at ₹53.
Key short-term resistances are at ₹77 and ₹90.
A strong rally above ₹90 is needed to alter the downtrend and take the stock northwards to ₹95 and ₹105 levels.
Send your queries to techtrail@thehindu.co.in
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