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I am holding the stock of Ashok Leyland at an average price of ₹124. Kindly advise regarding outlook for the stock.
S Gopalakrishnan
Ashok Leyland (₹125.4) : After recording a 52-week high at ₹138.8 in early February this year, the stock of Ashok Leyland began to decline. It was on a short-term downtrend until it found support at ₹110 in late March. This continued to provide a base thereafter and has become a significant support to note from a medium-term perspective.
In early May, the stock took support at ₹110 and started to trend upwards. It has jumped 11.9 per cent, accompanied by above-average volume in the past week.
The stock faces a vital barrier ahead at ₹130 and a strong breakthrough of this level will strengthen the long-term uptrend. Since the stock registered a multi-year low at around ₹33 in March 2020, it has been in a long-term uptrend. A rally above ₹130 can take it higher to ₹140. A further up-move beyond ₹140 will accelerate the stock northwards to ₹160 over the long run. You can consider booking profits at these resistances with a stop-loss at ₹110. Immediate supports are placed at ₹120 and ₹110. An emphatic plunge below the crucial base level of ₹110 will alter the medium-term uptrend and pull the stock down to ₹100. Next supports are placed at ₹90 and ₹80. Investors with a long-term perspective can stay invested with a stop-loss at ₹90.
I would like to invest in Larsen & Toubro Infotech. Please advise.
Ashish Pathrabe
Larsen & Toubro Infotech (₹3,659): The stock of Larsen & Toubro Infotech (LTI) breached a key resistance at ₹3,500 in late December 2020 and accelerated until it marked a 52-week high at ₹4,499.9 in mid-January this year. Subsequently, the stock started to move sideways in a wide range between ₹3,500 and ₹4,500. Now the stock is hovering above the lower boundary of the sideways movement. A conclusive slump below the lower boundary at ₹3,500 will reinforce the downtrend and drag the stock down to ₹3,250 and then to ₹3,000 levels. Next vital supports to note are placed at ₹2,750-₹2,800 band and then at ₹2,500. You can wait and consider investing in the stock at lower levels with a long-term stop-loss at ₹2,700 levels. On the upside, a clear rally above the crucial hurdle at ₹4,000 is needed to bring back bullish momentum and such a rally will also provide buying opportunity. Resistances above ₹4,000 are placed at ₹4,250 and ₹4,400. A rally above ₹4,400 can take the stock higher to ₹4,500 and then to ₹4,600 over the medium term.
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