Technical Analysis

Stock query: Siemens in consolidation phase

Yoganand D | Updated on July 26, 2020

A break above 1,250 can bring back bullish movement and take the stock higher to 1,350

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

I had bought Siemens at ₹1,400. Can you please tell about the prospects of this stock?

Vishal Salampuria

Siemens (₹1,159.9): Following an intermediate-term downtrend, the stock of Siemens found support at around ₹950 in late March this year. Subsequently, the stock reversed direction and witnessed a corrective rally.

But it encountered a key resistance at ₹1,250 in mid-April and continued to move sideways in a wide band between ₹1,000 and ₹1,250. Within this band, the stock has been in a near-term uptrend over the past few weeks. A strong break above ₹1,250 can push it northwards to ₹1,350, which is the 50 per cent fibonacci retracement level of the prior downtrend.

An emphatic break above ₹1,350 can take the stock higher to ₹1,400 and then to ₹1,450 over the medium term. But any failure to move beyond ₹1,250 will keep it range-bound for a while.

The key immediate supports are at ₹1,100 and ₹1,050. A plunge below ₹1,050 can pull the stock downwards to the lower boundary as well as the significant support at ₹1,000. A further decline below this base will strengthen the downtrend and pull the stock down to ₹950 or even to ₹900 over the medium term.

You can consider averaging the stock on declines with a long-term stop-loss at ₹980.

A strong break above ₹1,400 will alter the intermediate-term downtrend and take the stock northwards to ₹1,500 and then to ₹1,600 over the long run.

I have shares of Navin Fluorine International bought at ₹1,765. How strong is the share across time-frames?

Rohit Mallya

Navin Fluorine International (₹1,836): In October 2019, the stock broke through a key long-term resistance at ₹800, and since then, it has continued to trend upwards. Following a minor corrective decline in March this year, the stock found support at around ₹1,000 and continued to move up.

Across all-time frames, the stock is in an uptrend.

It had breached another key resistance at ₹1,650 in early July and extended the up-move. Reinforcing the bullish momentum, the stock jumped 2.8 per cent with above-average volume last Friday.

It can test an immediate resistance at ₹1,900.

A conclusive break above this barrier will take the stock higher to ₹2,000 levels over the medium term. However, a strong decline below the immediate support level of ₹1,650 will bring back initial selling interest and pull the stock down to ₹1,500. A further fall below ₹1,500 can strengthen the down-move and pull the stock lower to ₹1,400 and then to ₹1,200 over the medium term.

You can stay invested with a stop-loss at ₹1,640, and can consider booking profits if the stock fails to move beyond ₹1,900 levels.

Investors with a long-term perspective can stay invested with a stop-loss at ₹990 levels.

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Published on July 26, 2020

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