Technical Analysis

NTPC continues to lose steam

Yoganand D | Updated on January 23, 2018 Published on May 10, 2015

BL11NTPC   -  THE HINDU

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10MunjalCL.eps

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10EscortsCL.eps

The stock has been consolidating sideways in the ₹130-164 band since May 2014



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

I have been holding NTPC for the last five years at an average cost of ₹215. Should I sell it now and book a loss?

Anil Menon

NTPC (₹142): Since encountering a key resistance at around ₹239 in January 2010, the stock has been on a long-term downtrend. However, it found support at around ₹110 in early 2014 and saw a corrective rally which failed to surpass ₹164 — a key resistance level which is also the 38.2 fibonacci retracement level of the downtrend.

The stock has been on a sideways consolidation phase in a wide range between ₹130 and ₹164 since May 2014.

Currently, the stock is on a decline after testing the upper boundary this March. Last week, the stock fell 5.5 per cent, strengthening this downtrend.

It can breach the immediate support at ₹137 and find support at ₹130, which is also a key long-term support, in the coming months. Next significant supports are at ₹120 and ₹110 levels. Having said that, NTPC is among the top dividend-paying company; so, you can consider holding it and averaging at lower levels with a stop-loss at ₹105 levels.

An upward reversal from the key supports can push the stock higher to ₹164. For further upside, the stock needs to decisively breach its long-term resistance at around ₹180 for an up move to ₹200 and then to ₹220 levels.

What is your technical view on Munjal Showa Ltd?

Padmini Gahtyari

Munjal Showa (₹170.7): The long-term uptrend in Munjal Showa — a small-cap auto component company — that started from the August 2013 low of ₹54 came to a halt after recording a new high at ₹252 in November 2014. Since then, the stock has been on a medium-term downtrend. The short-term trend is also down for the stock.

However, a significant long-term support around ₹160 is providing base.

A decisive fall below this base level will reinforce the medium-term downtrend and drag the stock down to ₹160 and then to ₹125 in the months ahead.

On the other hand, an emphatic rally above ₹206 can push the stock higher to ₹220. A conclusive breakthrough of ₹220 is required to strengthen the bullish momentum and take the stock northwards to ₹250 and then to new highs in the long run.

What is the short and long-term target for Bank of Baroda?

Sudheer P

Bank of Baroda (₹145.1): The stock of Bank of Baroda reversed direction and started to decline after a registering a new high at ₹228.9 (stock split-adjusted) in late January 2015.

This downtrend got intensified as the stock plunged 14 per cent with good volumes, breaching a long-term trend deciding level at ₹160. This level also coincides with the 50 per cent fibonacci retracement level of the stock's prior uptrend.

Investors with long-term perspective, sitting on profits, can consider taking them off the table at this juncture and re-entering at lower levels.

The stock's on going medium-term downtrend can extend and it can test support at ₹130 in the ensuing weeks.

A decisive fall below ₹130 will further reinforce the downtrend and drag the stock down to ₹110 or ₹100 in the medium to long-term. Next key support below ₹100 is at ₹86. For a bullish reversal, the stock needs to surpass ₹160 initially and then ₹180 levels. Such a breakthrough can take the stock higher to ₹200 and ₹220 in the long term.

Please provide long term view on Escorts.

Suhel Yadav

Escorts (₹115.7): One leg of the stock's long-term uptrend has come to an end after recording a multi-year high at ₹174 in October 2014. Since then, the stock has been on an intermediate-term downtrend. It has a significant long-term support in the band between ₹105 and ₹110 which has provided support many times in the past.

However, this support is likely to give way this time as the stock’s downtrend is gaining momentum. It can decline to ₹95 in the medium- to long-term. Next key supports are pegged at ₹85 and ₹75 levels.

On the upside, an emphatic breakthrough of ₹140 is required to strengthen the uptrend and take the stock higher to ₹160 or ₹174 levels.

Send your queries to techtrail@thehindu.co.in

Published on May 10, 2015
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