What is the long-term outlook for the stock of SBI?
Rajeshwar Reddy
SBI (₹496.5): The stock has been in a strong uptrend since May 2020. This uptrend is currently facing resistance at ₹550. The stock has been struggling to breach this hurdle since November last year. The short-term outlook is negative while the stock remains below ₹550. The chances are high for SBI to see a fall to ₹400-380 in the next two-three months. Intermediate support is at ₹460. A break below it can trigger the above-mentioned fall to ₹400-380.
From a long-term perspective, the region between ₹400 and ₹380 is a very strong support that can limit the downside. A steeper fall beyond ₹380 is less probable. We can expect fresh buyers coming into the market at this level. As such, there is a strong likelihood of the stock bouncing sharply from the ₹400-380 support zone. That move will have the potential to take the stock above ₹550 in the coming months. Such a move above ₹550 will have the potential to take SBI up to ₹720-750 over the long-term, say in the next couple of years. Investors with a long-term perspective can buy at ₹430 and accumulate at ₹410. Keep the stop-loss at ₹320. Trail the stop-loss up to ₹460 as soon as the stock rallies to ₹580. Move the stop-loss further up to ₹560 as soon as the stock touches ₹660 on the upside. Exit the stock at ₹735.
What is the technical outlook for the stock of Bharat Petroleum Corporation Ltd (BPCL)?
Rahul
BPCL (₹363.1): This stock has been oscillating in a very broad sideways range for a prolonged period of time. The range of trade has been between ₹220 and ₹510 since February 2006. Within this broad range, the stock made a high of ₹468 in October last year and has been coming down since then. The outlook is negative. Chances are high for the stock of BPCL to fall towards ₹285 over the next two-three months. Intermediate support is at ₹338.
A break below it can drag it to ₹285. A bounce from ₹285 can see a corrective rally to ₹330-350. But that is likely to be short-lived. The strong is likely to reverse lower again and break below ₹285. Such a break can then drag BPCL down to ₹220 – the lower end of the range and even ₹200. Investors who are holding the stock can exit at current levels. However, the expected fall to the lower end of the range can be a good opportunity to enter the stock again. Long-term investors can buy at ₹230. Keep the stop-loss at ₹180. Trail the stop-loss up to ₹270 as soon as the stock moves up to ₹360. Move the stop-loss further up to ₹420 as soon as the stock touches ₹480. Exit the stock at ₹510.
I have shares of Hindustan Unilever (HUL). My average purchase prize is ₹2,300. What is the long-term outlook for this stock?
Ramana
HUL (₹2,237.1): Structurally, this stock has been on a strong uptrend with intermediate corrections. Within the overall uptrend, HUL has been in a corrective phase just now. The stock made a high of ₹2,859 in September last year and has been falling consistently. HUL has to rise past ₹2,400 decisively to mark the end of the correction. Such a rise will open doors for the target of ₹3,200-3,300 that can be seen next. But as long as it remains below ₹2,400, the stock will remain vulnerable to break the ₹2,000-1,900 support range.
A decisive break below ₹1,900 can drag the stock down to ₹1,600 and even ₹1,400 over the next three to six months. Thereafter the stock can see a fresh long-term rally targeting ₹3,200-₹3,300 over the next couple of years. Since you are a long-term investor, you can buy more when the stock falls to ₹1,550 and ₹1,430. Keep the stop-loss at ₹1,280 and hold it for the target of ₹3,200.
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