Technical Analysis

Oracle Financial trades above a key base

Yoganand D | Updated on November 03, 2019 Published on November 03, 2019

A strong break above ₹3,200 will strengthen the bullish momentum

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

I would like to buy shares of Oracle Financial Services and IOL Chemicals. Please give your views on the medium- and long-term target prices.

Wasudeo, Pradeep Kabra

Oracle Financial Services Software (₹3,164.3): The stock of Oracle Financial Services Software (OFSS) has been on an intermediate-term downtrend since recording a new high at ₹4,655 in September 2018. But in August 2019, the stock found support in the long-term base between ₹2,850 and ₹3,000 and began to move sideways with a positive bias.

It recently surpassed its 21- and 50-day moving averages and now tests a resistance at ₹3,200. A strong break above this barrier will strengthen the bullish momentum, taking the stock out of its sideways consolidation range. It can then trend higher to ₹3,400 in the short term.

 

 

The daily relative strength index (RSI) is on the brink of entering the bullish zone from the neutral region and the weekly RSI hovers in the neutral region. Moreover, the daily as well as the weekly price rate of change indicators have entered the positive terrain signifying buying interest.

As the stock has a significant long-term support in the ₹2,850-₹3,000 zone, investors with a long-term perspective can buy in declines with stop-loss at ₹2,830. An emphatic break above ₹3,400 can push the stock northwards to ₹3,700 over the medium term. To alter the intermediate-term downtrend, the stock needs to decisively break above the key resistance level of ₹3,700.

Subsequent resistances are at ₹3,900 and ₹4,000. But a conclusive fall below the immediate support level of ₹3,300 can pull it lower to ₹2,850. A strong decline below ₹2,850 will reinforce the downtrend and drag it lower to ₹2,700 and then to ₹2,600 in the medium term.

IOL Chemicals & Pharmaceuticals (₹197.9): The stock of IOL Chemicals & Pharmaceuticals jumped 5 per cent accompanied by above-average volume on Friday, breaking a key resistance at ₹191.

This rally has strengthened the short-term uptrend that has been in place since the stock took support at ₹165 in early October. Also, the ₹165 level being a long-term support, can cushion any corrective decline.

 

 

Investors with a long-term perspective can buy with stop-loss at ₹160. A clear breakthrough of the resistance at ₹210 will reinforce the bullish momentum and take the stock upwards to ₹220 and then to ₹230 over the medium term.

A further break above ₹230 will underpin the long-term uptrend and take it to new highs. Supports below ₹191 are at ₹180 and ₹165.

Send your queries to [email protected]

Published on November 03, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.