Technical Analysis

Tech Query: Is there much upside left for stock of MSTC?

Gurumurthy K BL Research Bureau | Updated on October 16, 2021

I want to invest in MSTC and NMDC. Please let me know the technical outlook for these stocks from a medium to long-term perspective.

Rajeswar Reddy

MSTC (₹458): The stock price of MSTC has skyrocketed 46 per cent in the last couple of weeks. The price movement since February 2020 is in the form of a strong bull channel. The stock is now approaching the upper end of this channel resistance poised at ₹520. So, there is not much room left on the upside from current levels. We expect ₹520 to cap the upside.

A pull-back from around ₹520 will keep the channel movement intact and can drag the stock lower to ₹350 and even ₹300 in the coming months. So, it is not advisable to enter this stock at current levels. Maybe you can consider buying the stock later in the ₹350-₹300 region when the correction happens.

NMDC (₹153.4): The stock of NMDC has been in a prolonged sideways consolidation between ₹60 and ₹205 since 2012. The stock made a high of ₹213 in May this year and has been coming down since then, thereby keeping the sideways range intact. As such, the chances are high for the stock to move down towards the lower end of this range in the coming months. Wait for a fall to buy at the lower end of the range in the ₹60-₹55 region. Alternatively, in case the stock surges from here and makes a strong weekly close above ₹185, then you can consider buying the stock. In that case the stock can surge to ₹300-₹310 initially and even higher eventually over the long term.

I have bought shares of Punjab National Bank at an average price of ₹58. What is the medium term outlook?

Subash KollaPunjab National Bank (₹42.55): The stock of Punjab National Bank been struggling to gain momentum and witness a strong rise although it has formed a strong base around ₹25. The stock will have to rise past ₹50 decisively in order to confirm a reversal and also indicate the beginning of a fresh leg of rally. Such a break can take the stock up to ₹70 initially and then to ₹100 eventually. But that looks difficult as seen from the price action in the charts.

Some strong and new trigger in the form of news or something else will be needed to take the stock above ₹50 from here. It is advisable to book loss in the stock and exit at current levels. In case you want to hold the stock, then you may need a lot of patience to see levels of ₹70 and ₹100, if at all it happens.

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Published on October 16, 2021

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