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What is the outlook for the stock of Karur Vysya Bank (KVB)?
Farhan, Salem
KVB (₹109.90): The trend is up and strong. However, there is an important resistance coming up at ₹123-125. Since the current rally has been sharp and swift, the chances are high for the upmove to pause around ₹125. A corrective fall from around ₹125 to ₹105-100 can be seen over the next couple of quarters. Indeed, a sideways consolidation between ₹100 and ₹125 is also a possibility for some time that cannot be ruled out. However, a fall beyond ₹100 is less likely. The moving average cross-overs on the monthly chart also strengthens the bullish case of seeing limited downside from here.
So, the overall trend will continue to remain up. As such, we can expect the stock of KVB to break above ₹125 eventually. Such a break will pave way for a fresh rally in KVB targeting ₹165-170 over the next couple of years. If you are a long-term investor, buy at current levels. Accumulate on dips at ₹103. Keep a stop-loss at ₹85. Move the stop-loss up to ₹115 as soon as KVB rises to ₹135. Move the stop-loss further up to ₹130 when the stock touches ₹145. Exit KVB at ₹165.
I have purchased the shares of Tata Chemicals at ₹1,000. Where can I accumulate this stock? What are the long-term supports and resistances?
Gurunathan
Tata Chemicals (₹948.10): The trend has been up for the stock of Tata Chemicals since April 2020. Within this, it has been in a correction phase ever since it made a high of ₹1,214.65 in October last year. The 21-Month Moving Average (MA) is at ₹917 and a trendline support is around ₹900. The price action indicates that every time the stock falls below the 21-Month MA, it is getting bought. So, the chances are high for Tata Chemicals to sustain above ₹900 and keep the uptrend intact.
A strong bounce breaking above ₹1,000 in a month or two can boost the momentum. In that case, the stock can test ₹1,250 over the next six months. A decisive break above ₹1,250 will have the potential to take Tata Chemicals up to ₹1,650 in the first half of next year. You can accumulate at current levels. Keep a stop-loss at ₹830. Trail the stop-loss up to ₹1,140 as soon as the stock moves up to ₹1,310. Move the stop-loss further up to ₹1,430 when Tata Chemicals touches ₹1,520 on the upside. Exit the stock at ₹1,600.
I hold shares of CARE Ratings. My purchase price is ₹480. Should I book profits now or continue to hold it?
Avinash Kumar Ojha
CARE Ratings (₹607.35): You can continue to hold the stock. However, it is very important for you to protect your profits. So, in the first place, keep a stop-loss at ₹530 and lock-in some profits. The outlook is bullish. Supports are at ₹570 and ₹540 which can limit the downside from here. If the current momentum continues, CARE Ratings can target ₹860 over the next six-eight months. Move the stop-loss further up to ₹660 when the stock rises to ₹710.
There is some resistance at ₹760 which can hold on its first test. A sideways consolidation between ₹660 and ₹760 is a possibility for some time. Thereafter, CARE Ratings can break above ₹760 and rally targeting ₹860. Revise your stop-loss up to ₹740 when the stock reaches ₹800. Exit the stock at ₹845.
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