Technical Analysis

Stock query: Natco Pharma on medium-term uptrend

Yoganand D | Updated on October 04, 2020 Published on October 04, 2020

But the stock faces a significant resistance ahead at ₹1,000

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

I hold shares of Natco Pharma. What is the outlook for the stock for the short, medium and long terms?

Sarvesh Goel

Natco Pharma (₹939.2): The stock of Natco Pharma has been on an intermediate-term uptrend since registering a 52-week low at ₹450 in late March this year. While trending up, the stock decisively breached a key long-term resistance at ₹700 in late July and continued to trend northwards.

Both the medium- and short-term trends are up for the stock.

The stock trades well above its 50- and 200-day moving averages. That said, it faces a significant long-term resistance ahead at ₹1,000, which is also a psychological level to note.

A strong break above this level can pave the way for an upmove to ₹1,100 and then to ₹1,200 over the medium term.

Key medium-term resistances above these barriers are pegged at ₹1,350 and ₹1,500 levels.

But failure to move beyond ₹1,000 can witness a sideways corrective phase in the band between ₹900 and ₹1,000.

A slump below the immediate support level of ₹900 can drag the stock down to ₹800 over the short term.

A strong fall below ₹800 will alter the medium-term uptrend and pull the stock lower to ₹740 and then to ₹700.

As long as the stock trades above ₹700, the intermediate-term uptrend will remain intact.

Investors with a long-term perspective can stay invested with a long-term stop-loss at ₹660.

I am a long-term investor and have been holding shares of Eros Media for the past two years. What is the future prospect of the stock?

Jyotiprakash M

Eros International Media (₹21.5): Across all-time frames — short, medium and long term — the stock of Eros International Media is on a downtrend. Since recording a multi-year low at ₹7.17 in late March, the stock has been on a corrective phase in which it rallied to ₹30.4 — a 52-week high marked in late August this year — and declined to ₹20.

Currently, the stock trades above the base level of ₹20 with a negative bias.

A fall below this level can drag the stock lower to ₹17.5 and then to ₹15 over the medium term.

The next supports are at ₹13 and ₹10.

On the other hand, a decisive rally above the near-term resistance levels of ₹25 and ₹30 can take the stock higher to ₹40 and then to ₹50 over the long run.

You can consider exiting the stock on rallies.

Send your queries to techtrail@thehindu.co.in

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Published on October 04, 2020
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