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

I have shares of Rural Electrification Corporation bought at ₹144. What is your outlook on the same? What are the support and resistance levels?

Tom Jose

Rural Electrification Corporation (₹119.6): The long-term downtrend in the stock that commenced from the new high at ₹223.8 in May 2017, appears to have come to a halt this July. The stock found support at around ₹90 in July and reversed direction — triggered by positive divergence, daily relative strength index and price rate of change indicator.

Subsequently, it began to move up sharply, backed by good volumes. Since then, the stock has been in a short-term uptrend.

Moreover, the price action since May has formed an inverse head and shoulders pattern, which is a bullish reversal pattern, with neckline at around ₹119. Last week, the stock surged 7.3 per cent with good volumes and now tests the neck-line with a positive bias.

 

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The daily relative strength index has entered the bullish zone from the neutral region. Both the daily and weekly price rate of change indicators feature in the positive territory, implying buying interest.

The short-term outlook is positive for the stock.

A decisive break above the neck-line can strengthen the uptrend and take the stock higher to the price targets of ₹132 and ₹150 in the medium term. You can buy the stock and average at dips with a stop-loss at ₹97. A strong rally beyond ₹150 can take the stock northwards to ₹160 and ₹170 levels. Supports are at ₹108 and ₹100.

I had purchased Intrasoft Technologies at ₹700. Shall I hold or average at current levels. Please share your views.

Venkatesan

Intrasoft Technologies (₹200.4): The stock of Intrasoft Technologies has been in an intermediate-term downtrend since recording a new high at ₹855 in December 2017. While trending down, it decisively breached key supports at ₹600, ₹515 and ₹300. The stock continues to trend down. It fell 13 per cent last week.

 

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However, it now tests a key support at ₹200. Both the daily and weekly indicators hover in the oversold territory. There is also an increase in daily volumes. The stock can find a temporary base at the current support level and witness a corrective up-move. Such a corrective up-move will be short-lived and the stock can encounter resistances at ₹250 and ₹300 levels in the short term.

Further rally beyond ₹300 can take the stock up to ₹350 and ₹370 levels. Next significant resistance is at ₹400. To alter the intermediate-term downtrend the stock needs to decisively rally above ₹515 levels.

In such a scenario, the stock can trend up to ₹550 and ₹600 in the long run. On the downside, if the stock conclusively plunges below the current base level, it can move lower to the subsequent vital support in the ₹140-150 band in the short term. You can consider averaging the stock at lower levels with a stop-loss at ₹150. Also, consider exiting the stock in rallies by booking profit.

Send your queries to techtrail@thehindu.co.in

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