Tech Query: Has HPCL found its bottom?

Gurumurthy K |BL Research Bureau | Updated on: Aug 06, 2022

Bull and bear , symbolic beasts of market trend. | Photo Credit: UGURHAN

We zoom in on HPCL’s prospects, as also that of two other stocks — Repco Home Finance and Pix Transmissions

What is the long-term outlook for Hindustan Petroleum Corporation Ltd (HPCL)?

Rujuta Panse

HPCL (₹250.7): The stock has been broadly range bound between ₹155 and ₹355 for a prolonged period of time since May 2018. There is resistance at ₹260 which might hold for now. One more leg of down move targeting ₹200-190 could be on the cards in the next three months or so. This ₹200-190 is a strong long-term trend support zone. A break below ₹190 might be difficult. We can expect the stock to see a fresh rally from around ₹200. That can take HPCL up to ₹350 over the next one year. If the stock breaks above ₹260 from here itself, then the rally to ₹350 can happen much quicker.

Investors with a long-term perspective can buy, say, 20 per cent of the intended amount at current levels. Buy the rest on a fall at ₹205. Keep the stop-loss at ₹155. Trail the stop-loss up to ₹225 as soon as the stock moves up to ₹280. Move the stop-loss further up to ₹290 when the stock touches ₹325. Exit 40 per cent of the holding at ₹345 and move the stop-loss for the rest of the holding to ₹330. Watch the market. In case the stock manages to break above ₹355, then it can pave the way for a strong rise to ₹450-480 thereafter.

What is the long-term outlook for Repco Home Finance? I have bought this share at ₹159. Can it touch ₹250 in the next one year?

Adithyan

Repco Home Finance (₹154): The broader trend is down. Within the downtrend, the stock made a low of ₹113.35 in June and has bounced from there. However, this bounce-back move seems to lack strength.  An important resistance is at ₹169. Only a strong rise past this hurdle will bring the chances of seeing ₹250 into the picture. Even in that case, the rally may not be swift. It might take about six months or more than that to touch ₹250 after a break above ₹169. So, you need to be very patient. If you have the patience to see the slow rise, then you can hold the stock by keeping a stop-loss at ₹132.

Alternatively, you can either exit the stock at current levels with a small loss or at ₹167 with a minor profit. You can reinvest the same amount in some other stock that can fetch you much better return within the same time span of six months. The ideal option that you could choose is the second. Sell the shares of Repco Home Finance and reinvest the amount in some other stock.

I have bought Pix Transmissions at ₹890 recently. What is the short- and long-term outlook for this stock?

Shirjeel Ahmed Khan

Pix Transmissions (₹929.25): The overall trend is up. But within the uptrend, the stock has been highly volatile in a very broad range for almost a year now. For the short term, the stock can oscillate inside ₹850-1,050 (narrow) or ₹750-1,100 (broad) range. The level of ₹750 is a very crucial support. As long as the stock stays above this support, the uptrend will remain intact. You can keep a stop-loss at ₹720 and hold the stock. Resistance is at ₹1,050-₹1,100.

A strong break above ₹1,100 will boost the bullish momentum. Such a break will take the stock up to ₹1,400-1,500. Trail the stop-loss up to ₹940 as soon as the stock breaks above ₹1,100. Move the stop-loss further up to ₹1,180 as soon as the stock touches ₹1,300 on the upside. Exit the stock at ₹1,400.

Published on August 06, 2022
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