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

I have bought shares of Tata Elxsi at ₹1790. Now the stock is trading above ₹2000. Should I accumulate more shares or wait?

Rakesh Tahilramani

Tata Elxsi (₹2,194.4): The stock of Tata Elxsi is on an uptrend across all-time frames — short, medium and long-term. It has significant medium-tern support at ₹1,700, which has acted as a strong base in the last four months.

Taking support in mid-November, the stock started to trend northward.

You have acquired the stock at this support level and it has gained 22.5 per cent since then, which is a good return, considering market volatility.

But the stock faces key resistance ahead at ₹2,300 and the indicators in the weekly as well as monthly charts suggest the stock is overbought. This means that a trend reversal is on the cards.

Therefore, you can consider booking profits on the stock at this juncture, to re-enter at lower levels or can consider switching to blue-chip stocks. A downward reversal from the current resistance can pull the stock down to ₹2,000 and then to ₹1,700 in the short to medium term.

A slump below ₹1,700 can alter the medium-term trend and even drag it down to ₹1,400. The next supports below ₹1,400 are at ₹1,100 and ₹1,000.

The long-term uptrend will be under threat only if the stock falls below ₹1,000 levels, which can drag the stock to ₹800. Investors with a long-term perspective can hold the stock with a deep stop-loss at ₹1,000.

A strong rally above the immediate resistance at ₹2,300 can take the stock higher to ₹2,500.

I hold Omax Autos and Nelco. What is the medium to long term outlook for these stocks?

Anil

Omax Autos (₹86.9): An emphatic breakthrough of the key long-term resistance level at ₹65 in the last week of November, has taken the stock to the next level.

The momentum has continued and the stock has surged 13 per cent last week. The medium as well as short-term trend for the stock is positive. Nevertheless, the short-term trend is weakening as the stock's daily indicators are showing negative divergence and daily volumes are decreasing.

Investors who have made profits on the stock can consider taking partial profits.

A fall below the immediate support level of ₹75 will mar the short-term uptrend and trigger a decline to ₹65.

But as long as the stock trades above ₹65, the uptrend will continue to be in place.

Only a decisive fall below this level will alter the uptrend and take the stock down to ₹60 or ₹53 levels.

A resumption of the upmove from the support level of ₹75 or ₹65 can take the stock higher to ₹95-100 in the long run.

Nelco (₹105.8): The stock's strong rally in November met with a key resistance, as a result of which it is witnessing a corrective decline. But strong support in the range between ₹90 and ₹95 is cushioning the stock.

A fall below this base zone will drag the stock down to the next support band between ₹75 and ₹80 in the medium term. Investors with a long-term perspective should tread with caution. On a fall below ₹75, the stock can decline to ₹60 or even ₹55 levels. There is no clear long-term trend that we can discern for the stock from its charts.

But a strong rally above the significant resistance level of ₹120 will reinforce the bullish momentum and pave the way for it to hit ₹145 over a long-term horizon.

Send your queries to techtrail@thehindu.co.in

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