Technical Analysis

Stock query: Raymond on long-term downtrend

Yoganand D | Updated on September 20, 2020 Published on September 20, 2020

To alter the trend, the stock needs to move beyond ₹800 levels

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

I am a long-term investor, holding shares of Raymond purchased in 2018 at ₹900. Could you kindly advise whether to hold or exit the stock?

Rajesh

Raymond (₹282.6): The stock of Raymond has been on a long-term downtrend since recording an all-time high of ₹1,151 in May 2018.

A key support at ₹540 cushioned the stock in late 2019 and as a result it witnessed a corrective upmove to ₹838 levels.

But the stock failed to surpass a key long-term resistance band between ₹840 and ₹850 in October 2019 and reversed the trend downwards.

In March 2020, it emphatically breached a significant long-term support between ₹500 and ₹540 and resumed the downtrend.

As the downtrend intensified, the stock slumped below another key support level of ₹370 in March.

It marked a 52-week low at ₹209 in late March and changed direction. Since then, the stock has been on a corrective up-move. It failed to move beyond the vital resistance at ₹370 in June and continued to move sideways.

The stock now faces resistance at ₹320. A decisive break above this hurdle will push it northwards to ₹350 and then to ₹370.

Further breakthrough of ₹370 will alter the medium-term downtrend and take the stock higher to ₹400 and then to ₹450 levels.

Key medium-term resistances are at ₹500 and ₹540 levels.

To alter the long-term downtrend, the stock needs to move beyond ₹800 levels. On the other hand, an immediate support is at ₹250, a plunge below which can pull the stock lower to ₹225 and then to ₹200 levels.

You can average the stock on declines with a stop-loss at ₹210 and consider exiting on rallies in the band between ₹500 and ₹540.

What is short-term outlook of JK Cement? I would like to buy for a short-term horizon.

Ashish Pathrabe

JK Cement (₹1,555.1): The stock is on an uptrend across all time-frames — short, medium and long term. The stock, which had recorded a 52-week low at ₹800 in late March this year, reversed the direction and has been trending northwards.

Since then, it has been on a medium-term uptrend. While trending up, the stock decisively breached key resistances at ₹1,250 and ₹1,400, which laterturned into a key support which cushioned the stock in July.

Moreover, the stock managed to move beyond a crucial resistance at ₹1,500, and registered a 52-week high of ₹1,613 in early August. A strong break above an immediate resistance at ₹1,600 can take the stock northwards to ₹1,650 and then to ₹1,700 levels.

On the downside, if the stock drops below ₹1,500, it can decline to ₹1,400 and then to ₹1,350 levels. Traders with a short-term view can buy with a fixed stop-loss at ₹1,485 levels.

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Published on September 20, 2020
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