Here are answers to readers’ queries on the performance of their stock holdings.
Please give your view on Reliance Capital and Reliance Infra.
Amita Khurana
Reliance Capital (₹588): Following an intermediate-term uptrend, the stock of Reliance Capital encountered a key resistance at ₹780 in early September this year.
The stock subsequently changed direction, triggered by negative divergence. Since then, the stock has been in a short-term downtrend.
While trending down, the stock emphatically breached key support at ₹650 and ₹600 levels. It is currently in a near-term corrective rally which can encounter resistances at ₹600 and ₹650 levels. Resumption of the short-term downtrend can pull the stock down to ₹550 and ₹500 levels in the medium term. A decisive fall below the medium-term key support level of ₹500 will be a threat to the intermediate-term uptrend that has been in place since the December 2016 low of ₹341 levels. The next supports are at ₹470 and ₹450 levels.
On the upside, a strong rally beyond ₹670 is required to alter the short-term downtrend and take the stock higher to ₹700 and ₹750 levels once again.
A conclusive break above the key hurdle at ₹780 can push the stock to ₹800, ₹850 and even to ₹900 in the long run. Investors with a long-term perspective can stay invested with a long-term stop-loss at ₹480.
Reliance Infrastructure (₹490.5): The stock of Reliance Infrastructure has been consolidating sideways in the broad range between ₹450 and ₹620 since March 2016.
Within this band, the stock has been moving sideways in the band between 450 and ₹550 from June 2017.
After taking support at the lower boundary at ₹450 last week before, it witnessed a sharp rally. But immediate resistance at ₹505 halted the stock upmove last week.
A decisive break above ₹505 can take the stock northwards to ₹520 and ₹540 levels in the short term. A further rally beyond ₹540 can push the stock higher to ₹580 and ₹620 in the medium term.
Key supports at ₹480 and ₹450 can cushion the stock in the near term.
Investors with a long-term perspective can remain invested as long as the stock trades above ₹450 levels with a stop-loss at ₹435.
A strong downward break of ₹450 will alter the sideways consolidation phase and pull the stock down to ₹425 and ₹400 levels.
Investors with a high-risk appetite can buy the stock with a stop-loss at ₹435. Long-term targets are ₹550 and ₹600.
I purchased Shilpi Cable at ₹57 and it has now declined to around ₹17.
Is it worthwhile to hold it for the long term?
Nagesh H D
Shilpi Cable Technologies (₹18.9) : In April, the stock of Shilpi Cable Technologies breached a key support level of 200 and plunged sharply. Since then, the stock has been in a bear grip and trending down, hitting the lower circuits.
After recording a multi-year low of ₹14.1 in early October, the stock has been moving sideways with a negative bias.
Exit the stock as the long-term outlook remains bearish.
Send your queries to techtrail@thehindu.co.in
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