Your Stock Portfolio. OIL India tries to gain support

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

I would like to invest in OIL India and Coal India from a long-term perspective. Can I can buy these stocks at the current levels.

Vasanthalakshmi D Pai

OIL India (₹444.4): Following an intermediate-term downtrend from the new high of ₹668 registered in September 2014, the stock of OIL India has been testing a long-term support in the band between ₹415 and ₹430 since early July this year.

The stock has reversed higher from this support band on many occasions in the past. If history repeats itself, as is the basic premise in technical analysis, then the stock could once again reverse higher from the support zone.

Investors with a long-term perspective can consider buying in small quantities, in dips with a stop-loss placed at ₹405. Moreover, the positive divergence in the weekly moving average convergence divergence indicator backs the reversal. Such a reversal can take the stock higher to ₹470 and then to ₹500.

A decisive break of ₹500 can push the stock higher to ₹530 and ₹550 in the long run. On the other hand, a strong fall below ₹415 can find support at ₹400 levels.

Coal India (₹333.8): The stock recorded a new high at ₹447 in early August this year. But it changed direction and witnessed a steep fall in the same month.

The stock found support at ₹332. Since its August peak, it has been on a medium-term downtrend and fallen 25 per cent from the new high.

The short-term trend is also down. However, the stock now tests a key support zone between ₹330 and ₹335. Investors with a long-term horizon can wait on the sidelines and buy in small lots on an upward reversal from the current support level.

A strong rebound can take the stock higher to ₹370 and then to ₹400 in the short to medium term. But an emphatic downward breakthrough of ₹330 can drag the stock down to the next key support band between ₹290 and ₹300.

This zone presents an opportunity to accumulate positions with a stop-loss at ₹280 levels.

Next key support below ₹290 is pegged at ₹250. To strengthen the long-term uptrend, the stock needs to conclusive break the resistance level of ₹400.This will pave way for an up move to ₹420 and ₹450 levels.

Please discuss the long-term target, supports and resistances for Zee Entertainment and Vedanta.

Raajesh Reddy

Zee Entertainment Enterprises (₹390.3): The stock of Zee Entertainment is in an uptrend across all time frames — long, medium and short term.

However, in early August, it encountered a key resistance at ₹420 and started to decline.

Key support at ₹360 provided cushion in late August and early September.

The stock has resumed its up move from this support. Now, the stock needs to clearly breakthrough the immediate resistance at ₹420 for a rally to ₹450 and then to the long-term resistance level of ₹475.

Conversely, a fall below the immediate support level of ₹360 will mar the stock’s medium-term uptrend and pull it down to ₹335 and then to ₹300 levels. Investors should tread with caution around this support level and can consider taking partial profits off the table if the stock decisively falls below ₹360. Next support below ₹300 is at ₹260.

Vedanta (₹97.1): This stock is in a downtrend across all time frames. After a fall below the psychological level of ₹100 in late August, the stock registered a 52-week low at ₹76 and bounced back. It now tests its resistance at ₹100.

A strong rally above this level will take the stock higher to ₹130 in the short term. But the inability to breach this level can pull it down once again to test support at ₹76 levels.

Next support below ₹76 is in the band between ₹60 and ₹70. On the upside, resistances above ₹130 are at ₹150 and ₹170 levels.

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