Technical Analysis

Stock Query: MOIL on revival mode, but hurdles ahead

Yoganand D | Updated on January 12, 2020 Published on January 12, 2020

A break above ₹160 will strengthen the uptrend and take it to ₹180 in medium term

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

I bought MOIL at ₹189. What is the long-term perspective of this holding?

Sathish S

MOIL (₹156.4): Following a long-term downtrend that commenced from the 2017 high of ₹285, the stock of MOIL found support in August 2019 at ₹118. It subsequently changed direction, and has been in a medium-term uptrend since then.

While trending up, the stock encountered a crucial resistance at ₹145 in October and November, 2019. However, it managed to surpass this barrier in early January, 2020. Further, the stock also decisively breached its 50-day and 200-day moving averages in early January, and trades well above them.

There has been an increase in daily volume over the past two weeks. The short-term trend is up. That said, the stock faces a key long-term resistance ahead at ₹160.

A strong break above this barrier will strengthen the uptrend and take the stock higher to ₹180 and then to ₹200 over the medium- to-long term. But an inability to move beyond ₹160 will keep the stock moving sideways for a while in the band between ₹145 and ₹160.

On the downside, a strong fall below the significant support at ₹145 will drag the stock down to ₹133. A further decline from this base will reinforce the long-term downtrend and pull the stock lower to ₹118 over the medium term. You can consider averaging the stock in dips while maintaining a fixed stop-loss at ₹130, and consider exiting if the stock reaches ₹200 in the long run. Investors with a low risk appetite can buy above ₹160 levels.

I have shares of NOCIL at ₹127 and DCB Bank at ₹220. Is it the right time to average these stocks?

Rakesh Kumar

NOCIL (₹113.3): The stock took support, recording a 52-week low at ₹73 in August, and started to trend upwards. But it faces difficulty in breaking above a significant long-term resistance at ₹120.

A breakthrough of this hurdle will reinforce the bullish momentum and take the stock northwards to ₹140 and ₹150 in the medium term.

Such a rally will strengthen the medium uptrend that has been in place from August 2019. A strong break above the key resistance level of ₹170 is required to alter the long-term downtrend and push the stock upwards to ₹185 and ₹200 over the long run.

Conversely, a fall below the vital base level of ₹95 would bring back selling interest and pull the stock lower to ₹90 and then to ₹80 levels. You can average with a stop-loss at ₹92 and exit if the stock struggles to move beyond ₹150 levels.

DCB Bank (₹185.9): The stock of DCB Bank is in a corrective rally now and tests resistance at ₹190. A break above this level will pave the way for a rally to ₹205, which is a long-term resistance level that needs to be conclusively breached thereafter. Such a move can push the stock northwards to ₹220 and then to ₹240 levels.

You can average in declines with a stop-loss at ₹160.

The immediate supports are at ₹175 and ₹165.

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Published on January 12, 2020
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