Technical Analysis

Stock query: Indian Bank records multi-year low

Yoganand D | Updated on March 08, 2020 Published on March 08, 2020

The stock has a vital long-term support in the band between ₹60 and ₹63

 

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

I have shares of Indian bank at ₹107 and JK Tyre at ₹80. Should I hold or sell?

Shah Umesh

India Bank (₹69.9): The stock of Indian Bank is trading near multi-year low of ₹66 recorded in the past week.

Ever since recording an all-time high at ₹428 in November 2017, the stock reversed direction and started to trend downwards. Since then, the stock has been in a long-term downtrend.

While trending down, the index had emphatically breached a significant long-term support at around ₹210 in July last year and, thereafter, the stock continued to head southwards without an major corrective up-move. In early February the stock breached the key psychological base level of ₹100 and extended the down-move.

Nevertheless, the stock has a vital long-term support in the band between ₹60 and ₹63 that could provide a cushion in the short term.

But, a conclusive fall below this base can drag the stock to a new low. Subsequent supports could be seen at ₹55 and ₹50. That said, the daily as well as the weekly indicators and oscillators are hovering in the oversold, indicating a minor corrective up-move or a sideways movement in the short term. In that case, the stock can witness a corrective rally to ₹80.

A decisive break-out of this hurdle can take the stock northwards to ₹90 and then to ₹100 over the medium term.

If you are a high-risk appetite investors with a medium term perspective can consider averaging the stock on an upward reversal from ₹60-63 zone with a stop-loss at ₹57. Alternately, you can buy above ₹80 with a stop-loss at ₹68 and consider exiting at around ₹100.

JK Tyre & Industries (₹62.7): This stock is also in a long-term downtrend. Key long-term resistance in the band between ₹85 and ₹90 had limited the stock’s upside in mid-January this year. Since then, the stock has been in a budding medium-term downtrend. While trending down, the stock breached key supports at ₹75 and ₹68.

It trades well below its 50- and 200-day moving averages. If the stock stays below the key resistance level of ₹68 then there is a possibility of it testing the medium-term support level of ₹55. Next support is at ₹50.

But a decisive rally above ₹68 and then ₹75 can experience a short-term uptrend to ₹80 and then to ₹87 levels. You can average on a rally above ₹68 with a fixed stop-loss.

Send your queries to techtrail@thehindu.co.in

Published on March 08, 2020

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!

Sincerely,

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.