Technical Analysis

Stock query: Suven Pharmaceuticals on short-term downtrend

Yoganand D | Updated on November 22, 2020 Published on November 22, 2020

A decline below ₹320 can pull the stock down to ₹295 and ₹280 over the short term

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

Please advise on the stock of Suven Pharmaceuticals purchased at ₹305. What are the prospects for the medium and the long term for this stock?

Sudhakar

Suven Pharmaceuticals (₹332.3): After getting listed in early March this year, the stock of Suven Pharmaceuticals witnessed a downmove and recorded a fresh low at ₹87 (adjusted) in late March.

Subsequently, the stock changed direction, and has since been on an intermediate-term uptrend.

During the uptrend, the stock decisively breached a key resistance at ₹177 in June and continued to trend upwards.

In late September, it met with a key resistance at ₹400 and began to decline. Since then, the stock has been on a short-term downtrend.

It now tests a crucial support at ₹320. A decline below this base can pull the stock down to ₹295 and then to ₹280 over the short term. Further plunge below ₹280 can drag the stock down to ₹240.

As long as the stock trades above the vital support level of ₹240, the intermediate-term uptrend stays in place.

However, if the stock slumps below this support, it will alter the uptrend and pull the stock down to ₹200 and then to ₹177 over the medium term.

On the upside, a strong breakthrough above the immediate resistance level of ₹360 can reinforce the uptrend and take the stock northwards to ₹380 and then to ₹400 in the medium term.

An emphatic break-out of ₹400 will pave the way for an up-move to ₹440 and then to ₹460 over the long run.

You can consider booking partial profit on a fall below the immediate support level of ₹320 and repurchase at lower levels.

Investors with a long-term view can stay invested with a stop-loss at ₹220.

Can I buy shares of Sumitomo Chemical India at the current price? Kindly advise.

TVS Prakash Rao

Sumitomo Chemical India (₹281.4): Following a medium-term uptrend, the stock of Sumitomo Chemical India has been in a sideways consolidation phase in the band between ₹260 and ₹310 since this June.

Within the sideways band, the stock has been charting downwards since late September. A strong break above the immediate resistance level of ₹300 will alter this downtrend and take the stock higher to the upper boundary of ₹310.

An emphatic break above ₹310 can accelerate the stock northwards to ₹320 and then to ₹340 levels over the medium term.

You can buy the stock on decline with a stop-loss at ₹255. On the downside, a decisive fall below the lower boundary of ₹260 can pull the stock down to ₹240 and then to ₹220 over the medium term.

Send your queries to techtrail@thehindu.co.in

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Published on November 22, 2020
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