Here are answers to readers’ queries on the performance of their stock holdings.
I had bought shares of MCX at ₹1,100. Can I average out more at the current price? What are the medium and long-term prospects for this stock?
Rajeev Gera
Multi Commodity Exchange of India (₹922.2): Since bottoming out from the August 2013 low of around ₹240, the stock has been on a long-term uptrend, forming higher peaks and troughs. Nevertheless, it encountered a key resistance at ₹1,289 in March 2015 and has been on an intermediate-term downtrend from that high.
The stock is now getting support in the ₹900 and ₹920 zone over the past two months. A strong fall below this level will strengthen the downtrend and drag the stock down to ₹830 or even to ₹750 levels.
Hence, you can consider averaging the stock at lower level on a fall below the immediate support level with a stop-loss at the level of ₹730.
The long-term uptrend will be in place as long as the stock trades above the significant support level of ₹750. An upward resumption of the uptrend can take the stock higher to ₹1,000 and then to ₹1,150 in the medium term.
A strong rally above ₹1,150 can accelerate the rally to ₹1,300 levels in the long term. Key resistances beyond ₹1,300 are pegged at ₹1,450 and ₹1,600. On the other hand, significant supports below ₹750 are pegged at ₹650 and ₹500 levels.
Please let me know the future performance of the stock of IL&FS Transportation Networks purchased at ₹147.
Shrikant Wagh
IL&FS Transportation Networks (₹94.5): The stock of IL&FS Transportation Networks is in a downtrend across all time frames. We had reviewed the stock in June when it was hovering around ₹142 and indicated that a fall blow the key support at ₹130 can drag it down to ₹100.
In August, the stock emphatically declined below ₹130 as well as ₹100 to record an all-time low at ₹85. Since then, the stock has been on a gradual rally.
It finds difficulty in breaching the key psychological resistance at ₹100. An emphatic breakthrough of this resistance can take the stock higher to ₹115 and then to ₹130 in the short to medium term.
Further rally above ₹130 will pave way for an up move to ₹145 and subsequently to ₹170 levels. To alter the intermediate-term downtrend, the stock needs to emphatically breakthrough ₹170. Strong rally beyond this level can hit ₹190 and ₹225 levels in the long run.
You can consider averaging the stock above ₹100 with a stop-loss at ₹85.
However, a decisive fall below ₹85 can drag the stock to new lows. So stay cautious.
I am holding shares of Rolta India. Should I keep them?
PK Krishnan
Rolta India (₹107.9): The stock of Rolta India witnessed an accelerated rally to around ₹190 in February. In a similar fashion, the stock plummeted sharply in April andhas been on an intermediate-term downtrend.
However, the stock found support at its key medium-term base level of ₹90 in late August. Since then, it has been on a nascent uptrend.
But the stock faces an important resistance ahead at around ₹115. A decisive breakthrough of this level is needed to strengthen the uptrend and take the stock higher to ₹135 and ₹155 levels in the medium term.
Investors with a long-term perspective can hold the stock with a stop-loss at ₹90. Key supports below ₹90 are at ₹80 and ₹65 .
Send your queries to techtrail@thehindu.co.in
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