IDFC First Bank (₹72.90): The stock has seen a strong rally over the last couple of months. On the charts, the picture is strong and bullish. There is room for more rise from the current levels. So, you continue to hold the stock. However, it is important for you to protect your profit. Support for the stock is at ₹68. Any pull-back from current levels can be limited to ₹68. A fall below ₹68 looks less likely as fresh buyers are likely to come into the market around this level.

IDFC First Bank share price can rally to ₹84-85 over the next three-six months or even before that. You can keep a stop-loss at ₹66. Move the stop-loss up to ₹68 when the price touches ₹78. Revise the stop-loss further up to ₹77 when IDFC First Bank share price moves up to ₹81. Exit the shares at ₹83. The region between ₹84 and ₹85 is a strong long-term trend resistance. As such, the chances are high for the current rally to halt there and reverse lower. That reversal may have potential to drag the stock price lower to ₹75-73 from a long-term perspective. So as suggested above, exit the stock at ₹83 rather than becoming greedy for higher levels at that time.

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I have subscribed to the Bharat 22 and CPSE Exchange Traded Funds (ETF) ETF during their NFO at the issue price. These ETFs have touched historic highs recently. Should I continue to hold these ETFs or book profits? 

V Rajesh

Since you are holding ETFs, we are giving the outlook for the index here. You can use the index levels to exit your position in the ETF accordingly.

S&P BSE Bharat 22 Index (5,239.79): Structurally, the trend has been up for the index since April 2020. There is no sign of a trend reversal visible yet on the charts. Supports are at 5,145 and 4,950. The trend will turn bearish only if the index declines below 4,950. But at the same time, there is a strong resistance coming up in the 5,570-5,600 region. So, there is not much room left on the upside from here. The rally can either halt and reverse or take pause for some time after testing the 5,570-5,600 resistance zone. For now, you consider 4,920 on the index as your stop-loss level.

Consider exiting 40 per cent of the holding when the index reaches 5,450. Make sure to deploy the sale proceeds in some other stock that has potential to rise from here. Revise the stop-loss for the balance holdings to 5,200. Exit the balance ETF holdings when the index touches 5,550 or 5,200, whichever comes first. Once again, after exiting the position reinvest the amount in a good stock.

Also read: Index Outlook: Uptrend likely to resume in Nifty 50, Sensex

S&P BSE CPSE (1,858.57): The trend has been up since April 2020. The index made a high of 1,882.71 in May and has been consolidating over the last four weeks. A corrective fall to 1,800 looks like a possibility in the short term. However, the trend will continue to remain up. We can expect the uptrend to resume either after some more consolidation around current levels or after a dip to 1,800.

That fresh leg of upmove can take the index up to 1,950 in the coming months. Have 1,780 on the index as the stop-loss level and hold your ETF. Move the stop-loss up to 1,820 as soon as the index moves up to 1,900. Exit your ETFs when the index touches 1,935. As mentioned above in the previous ETF, make sure to reinvest the sale proceeds in some good stock that has potential to rally.

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