Technical Analysis

PFC in reversal mode

Yoganand D | Updated on January 20, 2018 Published on May 15, 2016




PFC in reversal mode

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

What are the support levels for PFC and REC stocks and can I buy at current levels?

M Kannappan

Power Finance Corporation (₹174.6): The stock of Power Finance Corporation has a significant long-term support in the price band between ₹145 and ₹150.

After testing this band in January and February, the stock price changed direction, triggered by positive divergence in the weekly relative strength index and price rate of change indicator.

Since then, the stock has been on a medium-term uptrend. It jumped more than 5 per cent with above-average volumes being witnessed on Friday, breaching its 21 and 50-day moving averages.

You can make use of declines to buy the stock, while maintaining stop-loss at ₹140.

Currently, the stock faces a significant near-term resistance at ₹182. An emphatic breakthrough from the above resistance level can pave the way for an up move to ₹200, which is also the 200-day moving average.

Further, rally above ₹200 can take the stock up to ₹230 and ₹250 over the medium to long-term. The stock has near-term support at ₹162. A slump below this level can drag the stock down to ₹145 over the medium term. Further key support levels to watch out for would be at ₹130 and ₹120.

Rural Electrification Corporation (₹164.7): Ever since the stock price faced a resistance at around ₹360 in March 2015, it has been on an intermediate-term downtrend. Subsequently, the stock price found support at its long-term base zone between ₹145 and ₹155 in February 2016 and started moving sideways.

Since February, the short-term trend has been a sideways movement in the price range of ₹150-180. Historically, the stock has reversed higher from the significant base range between ₹145 and ₹155.

Therefore, there is a possibility of such reversal if the stock retests this base. You can make use of dips to buy the stock while maintaining stop-loss at ₹140.

A decisive breakthrough of the upper boundary of the sideways range at ₹180 can take the stock higher to ₹195-200 band in the short term. Rally beyond ₹200 can push the stock up to ₹225 and ₹250 levels over the medium term. But to alter the intermediate-term downtrend, the stock needs to emphatically breach the key level at ₹265. Such a break can take the stock higher to ₹300 in the long run.

Send your queries to

Published on May 15, 2016

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.