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Here are the answers to readers’ queries on the performance of their stock holdings.
I hold shares of Asian Paints. What is the outlook for the stock for the short, medium and long terms?
Ravi Sankar
Asian Paints (₹2,213): The stock of Asian Paints is on an uptrend across all time-frames — long, medium and short terms.
The stock had encountered a key resistance at ₹1,900 in February and early March this year.
It depreciated and recorded a 52-week low at ₹1,431 in late March. It then started to trend upwards, but witnessed another sharp fall in May. But the stock took support at ₹1,500 in late May and continued to trend upwards. Since then, it has been on a medium term uptrend.
While trending up, the stock emphatically breached a key resistance at ₹1,900 in late August, which turned into a key support thereafter and provided base for the stock. With this breakthrough, the stock resumed the long-term uptrend and continues to trend upwards.
It trades well above the 50- and 200-day moving averages. In early October, the stock conclusively surpassed the psychological resistance level of ₹2,000, and trades well above this level — this could act as a vital short-term support for the stock in the future.
The weekly relative strength index (RSI) features in the overbought territory and the daily RSI is showing initial signs of weakness; so, exercise caution in the short term.
The immediate resistance is at ₹2,300. A conclusive break above this barrier can push the stock northwards to ₹2,500 over the medium term. The key supports below ₹2,000 are placed at ₹1,900 and ₹1,830. A decisive fall below the second support will alter the short-term trend downwards and can pull the stock down to ₹1,700.
The next medium-term supports are placed at ₹1,600 and ₹1,500.
Investors with a long-term perspective can stay invested with a stop-loss at ₹1,200 levels.
I have shares of Ester Industries bought at ₹55 approximately 10 years ago. Please provide technical outlook with a long-term stop-loss.
Chintamani K
Ester Industries (₹121.6): The stock took a long-term support in the band between ₹20 and ₹22 in March this year and started to trend upwards.
Since then, it has been on an intermediate-term uptrend.
In early October, the stock accelerated, breaking a key resistance at ₹80; thereafter, in mid-October, it emphatically surpassed another vital barrier at ₹100.
Currently, the daily as well as the weekly relative strength indices (RSIs) are hovering in the oversold territory, implying that a short-term correction is likely.
Historical price action of the stock suggests that after every strong accelerated rally, it witnesses a prolonged downtrend.
So, you can consider booking partial profits if the stock fails to move above the near-term resistance at ₹130.
You can hold the stock with a long-term stop-loss at ₹95. A strong rally beyond ₹130 can take the stock higher to ₹140 and then to ₹150. But a conclusive fall below the key support level of ₹100 can drag the stock down to ₹90 and then to ₹80. The subsequent support is at ₹60.
Send your queries to techtrail@thehindu.co.in
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