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I would like to invest in the shares of Tech Mahindra. What is the technical outlook for this stock?
Pradeep Kabra
Tech Mahindra (₹1,114.55): There is an early sign of a bottom in the stock of Tech Mahindra. The stock made a low of ₹914.67 in June and has been trying to move up. This level of ₹914 was an important long-term trendline support at that time. Currently this trendline support is at ₹940. The 61.8-per cent Fibonacci retracement support is at ₹950. A crucial resistance is at ₹1,200. A decisive break above it will confirm the trend reversal and take Tech Mahindra up to ₹1,450-1,500. That will also leave the doors open for the stock to target ₹1,800-1,850 from a long-term perspective, say a couple of years.
Assuming that you are a long-term investor, buy Tech Mahindra at current levels. Accumulate on dips at ₹1,060 and ₹980. Keep a stop-loss at ₹770. Trail the stop-loss up to ₹1,170, when the stock rallies to ₹1,340. Move the stop-loss further up to ₹1,450 when Tech Mahindra touches ₹1,600 on the upside. Exit the stock at ₹1,780. Please note that before a breakout above ₹1,200, the chances of a sideways move between ₹950 and ₹1,200 for another quarter or two is a possibility. So, you will need patience.
I have purchased shares of TTK Prestige at an average price of ₹1,010. The share price has been falling over the last few weeks. Should I hold the stock or exit with a minimum loss?
K Jayasekar, Chennai
TTK Prestige (₹881.9): The long-term trend has been up for the stock of TTK Prestige. There is a strong support at ₹820 and at ₹770. A further fall from here to test ₹820 cannot be ruled out. However, we see high chances for the stock to sustain above ₹820. A fresh leg of rally, thereafter, can break the resistance at ₹1,050 and take TTK Prestige up to ₹1,250 and ₹1,350 over the long term.
Assuming that you are a long-term investor, we suggest you to hold the stock. Buy more on dips at ₹850. Keep a stop-loss at ₹790. Move the stop-loss up to ₹1,020 when the stock moves up to ₹1,110. Revise the stop-loss further up to ₹1,150, when the stock touches ₹1,260 on the upside. Exit the stock at ₹1,320. In case your risk appetite is very low and if you don’t have room to accumulate on dips and have wide stop-loss, then you can consider exiting at current levels itself.
I hold shares of Suven Life Sciences. Please advise me about the upside potential. Should I hold the stock or sell it?
T Meena, Hyderabad
Suven Life Sciences (₹63.50): The stock has been in a strong downtrend since October last year. There is no sign of a bottom yet. So, the downtrend is very well intact. Support is at ₹54. So, there is still room left for the stock to fall from here. Strong resistance is in the broad ₹70-75 region. Suven Life Sciences will have to rise past ₹75 decisively to confirm a trend reversal. Only in that case the chances of revisiting ₹100-levels will come back into the picture. However, looking at the price action on the charts, a break above ₹75 might not happen anytime soon.
A strong trigger will be needed for Suven Life Sciences to breach ₹75 from here. Preference is to see a fall to ₹54 first and then a bounce. Though you have not mentioned your purchase price, we suggest you exit the stock at current levels even if it is in a loss. You may consider reinvesting the sale proceed in some other good stock.. Maybe you can consider Tech Mahindra explained in the previous query.
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