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Here are answers to readers’ queries on the performance of their stock holdings.
I purchased shares of MOIL at ₹290. Should I hold or average them to reduce costs?
N Raman
MOIL (₹244.3): After struggling to decisively break the key resistance band between ₹325 and ₹335, the stock started to decline in December 2014. Since then, it has been on an intermediate-term downtrend.
However, the stock changed direction in late July, after recording a 52-week low at ₹228 levels. The stock has been on a nascent up move since then. This uptrend is backed by positive divergence in daily indicators and a key long-term support at ₹230 levels.
The stock has managed to move above its 21- and 50-day moving average by gaining 5 per cent last week.
But it now faces a key immediate resistance at ₹250, which it is likely to test in the coming weeks.
A decisive break can take the stock northwards to ₹275 in the medium term. The trend deciding level is at ₹285.
A conclusive break-out of this level will alter the downtrend and push the stock higher to ₹310 and then to the key resistance band between ₹325 and ₹335.
You can consider averaging the stock at the current levels with a stop-loss at ₹225.
I have shares of IDBI Bank bought at ₹97. What is the price at which I can average the stock?
Murugesan
IDBI Bank (₹67.1): The long and intermediate-term outlook continues to be down for the stock of IDBI Bank. Nevertheless, the significant support at ₹60 is providing base. The stock bounced from this level in October 2014 and again in the last two months. As long as this base level holds, investors with a long-term perspective can consider holding the stock with a stop-loss at ₹57.
The stock now faces an important resistance level as well as 200-day moving average at ₹70. An emphatic break out of this level is needed to strengthen the near-term up move and for investors to average their holdings.
Next targets are at ₹82 and ₹90. A strong rally beyond ₹90 can alter the intermediate-term downtrend and take the stock upwards to ₹100 and then to the level of ₹115.
To alter the long-term downtrend, the stock needs to conclusive breach the vital resistance band between ₹120 and ₹130.
On the downside, a strong fall below the base level of ₹60 will strengthen the downtrend and drag the stock down to ₹52.
What is the long-term outlook for Metalyst Forgings at ₹370 levels?
AK Padwal
Metalyst Forgings (₹127.6): Following a strong rally in 2014 and marking a new high at ₹519 in November 2014, the stock started to reverse down.
It plummeted 75 per cent from its new high and is in a downtrend across all-time frames. However, the stock found support at ₹123 in late June and July and is moving sideways. A fall below this support can pull it down to the psychological base level of ₹100.
Investors with a long-term perspective can consider averaging the stock on such a fall with a stop-loss at ₹85.
An upward reversal from the support level can take the stock higher to ₹150 and then to ₹200 in the medium to long term. Subsequent resistance is in the zone between ₹260 and ₹270.
Send your queries to techtrail@thehindu.co.in
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