Your Stock Portfolio. Merck in a medium-term uptrend

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

I want to buy Merck and Infibeam shares. Please advise?

Manoj

Merck (₹981.1): Last week, the stock of Merck gained 4.8 per cent resuming its medium-term uptrend. However, the stock now faces a key resistance at ₹1,000. Conclusive breakthrough of this hurdle will strengthen the stock’s medium- as well as long-term uptrend.

The stock can trend upwards to ₹1,060 and then to ₹1,100 levels. Fall below the immediate support level of ₹935 will bring back selling pressure and pull the stock down to ₹900 and then to ₹870 levels in the medium term.

As long as the stock trades above the key support band between ₹830 and ₹845, its intermediate-term uptrend will remain intact.

You can either buy at the current level and exit around ₹1,100 or wait for a correction and buy at lower levels of ₹900 with stop-loss at ₹845.

Infibeam Incorporation (₹1,274.2): Ever since listing in April 2015, the stock of Infibeam Incorporation has been on a steady uptrend. In a short span of less than a year, the stock has become a multi-bagger, gaining three-fold.

As long as the stock trades above the significant long-term support band between ₹880 and ₹900, the uptrend will remain intact. Investors with a long-term perspective can hold the stock with stop-loss at ₹860 levels. The stock can reach ₹1,400 levels on a breach of ₹1,338 which is the immediate key resistance. The upside looks limited for the stock as indicators such as relative strength index and price rate of change on the daily as well as weekly charts show negative divergence, implying trend reversal. Therefore, you can wait and buy at lower levels.

Strong downward breakthrough of the immediate key support level of ₹1,200 will alter the short-term uptrend and pull the stock down to ₹1,150 and then to ₹1,050 in the medium term.

Further fall below ₹1,050 can drag the stock down to ₹1,000 and then to ₹950 levels.

I bought Supreme Industries at ₹926. Shall I hold?

TC Rajashegaran

Supreme Industries (₹964.2): The stock of Supreme Industries is in an uptrend across all time frames. Last November, the stock took support at around ₹800 and resumed its uptrend.

Since then, it has been in a medium-term uptrend. The stock rose 2.4 per cent in the previous week, breaching the immediate resistance at ₹940.

Recently, the stock breached its moving average compression at around ₹890 strengthening the medium-term uptrend.

The stock’s current uptrend can extend and encounter resistance at ₹1,000 in the near term.

You can hold the stock with a stop-loss at ₹940 and consider exiting partially if the stock struggles to move beyond the key long-term resistance level of ₹1,000.

Strong break-out of ₹1,000 can take the stock higher to ₹1,050 and ₹1,100 in the medium-term.

But a fall below the key support level of ₹910 will alter the short-term uptrend and a fall below ₹860 can threaten the medium-term uptrend. Conclusive fall below ₹860 can pull the stock down to ₹800 levels.

Important supports below ₹800 are placed at ₹750 and ₹730. Investors with a long-term perspective can stay invested with a stop-loss at ₹750 levels.

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