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

I have bought the stock of Wabag at ₹680. Kindly indicate the prospects.

TVS Prakash Rao

VA Tech Wabag (₹590.2): The stock of VA Tech Wabag found support at ₹450 in November and December 2016 and started to trend upwards. During February and March this year, the stock accelerated strongly, breaking key resistances at ₹520 and ₹640 levels.

However, the stock encountered a key resistance in the band between ₹735 and ₹750 in late March as well as in June and began to decline. Since then, it has been in a medium-term downtrend. Short-term trend is also down for the stock. Nevertheless, a key medium-term support at around ₹580 has been providing base since late July. The stock now tests this base with a negative bias. It trades well below the 50 and 200-day moving averages.

A strong downward break of ₹580 will strengthen the downtrend and drag the stock down to ₹560 and ₹520 over the medium term. You can wait and consider averaging the stock at these support levels with a long-term stop-loss at ₹500.

Having said that, avoid taking fresh positions if the stock falls further below ₹500 as the selling pressure can increase and pull the stock down to ₹450 or ₹430 in the long term. On the other hand, a decisive break above the significant long-term resistance level of ₹640, can target ₹670 and ₹700.

Further rally beyond ₹700 can push the stock northwards to ₹750 in the long run. Investors with a long-term perspective can stay invested with a fixed stop-loss at ₹500.

I have shares of UCO Bank bought at an average price of ₹51 and IDBI Bank at an average price of ₹63. Should I accumulate or book loss.

Dhanam Murugesan

UCO Bank (₹32.5): The stock of UCO Bank is in a downtrend across all-time frames, long, medium and short term.

It has a significant long-term support in between ₹28 and ₹30, which has been providing base since August this year. After taking support in this band, the stock skyrocketed almost 20 per cent on Wednesday, but subsequent selling pressure has wiped out some of the gains. Immediate supports are at ₹31 and ₹29. An upward reversal from these supports can take the stock higher to ₹35 and ₹37 again in the short term.

However, to alter the medium-term downtrend, an emphatic break above ₹37 is needed. Such a break can target ₹40 and ₹45 in the medium to long term.

Conclusive break above the long-term resistance level of ₹45 is required to alter the broad sideways consolidation phase in the band between ₹28 and ₹45, that has been in place since early 2016. Next resistances are at ₹50 and ₹55. Consider accumulating the stock above ₹37 and make use of rallies to exit it. On the downside, if the stock declines below ₹28, it can record multi-year lows. Subsequent supports are at ₹25 and ₹22.5 levels.

IDBI Bank (₹62.3): The stock of IDBI Bank is in a long-term downtrend. However, the key long-term support in the range between ₹50 and ₹52 provided base for the stock in the months of August and October.

Reversing from this support band, the stock surged 20 per cent last week with extra-ordinary volume. This rally has changed the short-term trend but the medium-term trend continues to be down.

To alter this, the stock needs to decisively breach₹70. In such a scenario, the stock can trend upwards to ₹75 and ₹85 in the medium term. You can accumulate the stock with a stop-loss at ₹55. On the downside, a strong plunge below ₹50 can drag the stock down to ₹47, ₹45 and ₹42 .

Send your queries to techtrail@thehindu.co.in

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