Technical Analysis

Stock query: Sanofi India in a sideways phase

Yoganand D | Updated on August 16, 2020

Inability to move beyond ₹8,500 can keep it range-bound between ₹7,500 and ₹8,500

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

What is the outlook for Sanofi India?

Manohar Joshi

Sanofi India (₹8,325): The stock of Sanofi India has been on a long-term uptrend since it took support at a significant base at around ₹4,000 in late 2017.

After a sharp corrective decline in March this year, the stock bounced back strongly, taking support at ₹6,000.

Since then, the intermediate-term trend has been up.

However, after recording a new high at ₹8,528 in mid-April, the stock started to consolidate sideways in the band between ₹7,500 and ₹8,500.

Currently, it tests the upper boundary of the consolidation phase. An emphatic break above this barrier will reinforce the intermediate- as well as long-term uptrends and take the stock northward to ₹9,000 and then to ₹9,500 in the long run.

Having said that, inability to move beyond the vital level of ₹8,500 can keep it range-bound between ₹7,500 and ₹8,500 levels for a while. Within the range, the immediate supports are at ₹7,800 and ₹7,500.

A decisive fall below ₹7,500 can drag the stock down to ₹7,000. Further decline below 7,000 will alter the intermediate-term uptrend and pull the stock lower to ₹6,600 and then to ₹6000. The long-term uptrend will remain intact as long as it trades above ₹5,700 levels.

Investors with a long-term horizon can remain invested with a stop-loss at ₹5,500 levels.

I have purchased Tata Power at ₹49. What are the medium- and short-term price targets?

Amit Ajmera

Tata Power Company (₹54.9): The stock of Tata Power Company has been on a medium-term uptrend since recording a multi-year low at ₹27 in early May this year.

While trending up, the stock breached a key resistance at ₹45 and continued to trend up.

Last week, it gained 10 per cent accompanied by good volumes, strengthening the uptrend.

The daily as well as the weekly relative strength indices feature in the bullish zone, backing the upmove. The stock trades well above the 50- and 200-day moving averages. But the stock had encountered a key resistance at ₹55 recently and tests this level.

A conclusive break above this barrier will take the stock northwards to ₹62 and then to ₹70 over the medium term.

An emphatic rally beyond ₹77 will alter the intermediate-term downtrend and pave the way for an upmove to ₹85 or ₹90 levels.

The next vital resistance is at ₹100. On the downside, key supports at ₹50 and ₹45 can act a short term base.

A plunge below ₹45 can pull the stock lower to ₹40 and then to ₹35 levels over the medium.

You can consider booking partial profit if the stock fails to move beyond ₹62. Investors with a long-term view can stay invested with a stop-loss at ₹35.

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Published on August 16, 2020

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