Technical Analysis

Stock query: Strides Pharma in a consolidation phase

Yoganand D | Updated on March 15, 2020 Published on March 15, 2020

A decisive fall below ₹340 can test the long-term support at ₹300

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

I am a long-term investor. Can you inform about the long- and medium-term prospects of Strides Pharma shares purchased at ₹497?. Shall I dispose the shares at the current rate and book losses?

S Vanaja

Strides Pharma Science (₹401): The stock of Strides Pharma Science has been in a wide sideways consolidation phase between ₹300 and ₹550 since May 2018. Within this consolidation phase, it encountered a key resistance at ₹550 in February 2020 and began to decline. The short-term trend is down.

The stock recently took a support at ₹340 and bounced up strongly, but faces a key hurdle at ₹460 and ₹475. A break above these levels can push it northwards to ₹500 and then to ₹550 in the medium term.

However, failure to move beyond ₹475 can keep the short-term downtrend intact and drag the stock lower to ₹360 and then to ₹340 once again. A decisive fall below ₹340 can test the long-term support at ₹300. You can consider averaging the stock declines with a long-term stop-loss at ₹280. An emphatic break above the crucial long-term resistance at ₹550 can take the stock higher to ₹600 and then to ₹700 over the long run.

To alter the long-term downtrend that has been in place since the stock recorded a new high at ₹1,371 in late 2015, it needs to conclusively break above ₹850 (this is a vital long-term resistance to be noted). In that case, the stock can trend upwards to ₹900 and ₹1000.

I bought shares of Siemens at ₹1,560. It has been declining continuously. Should I hold or exit?

Manish Saraogi

Siemens (₹1,212.3): The stock recorded an intra-week low at ₹1,030 and bounced up strongly. But it faces a key barrier at ₹1,310 with an immediate resistance at ₹1,250.

A decisive break above this level can pave the way for a corrective rally to ₹1,400.

The next resistance is at ₹1,450, which is a key trend-deciding level of the intermediate-term downtrend that has been in place since an all-time high of ₹1,716 registered in October 2019.

The subsequent resistance are at ₹1,500 and ₹1,600.

On the downside, a decisive plunge below the immediate support at ₹1,100 can strengthen the downtrend and pull the stock lower to ₹1,050 and then to ₹1,000 in the medium term.

You can wait and average the stock at lower levels with a stop-loss at ₹980.

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Published on March 15, 2020
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