What is the long-term technical outlook for the stock of Asian Paints? Can I accumulate the stock at current levels?

Prashant Pore

Asian Paints (₹2,835): This stock has been structurally in an uptrend with intermediate corrections. Within the overall uptrend, the stock made a high of ₹3,500 in January this year. Thereafter it has come down and is in a correction phase since then. Immediate support is at ₹2,731 – the 100-Week Moving Average (WMA). Below this, a much lower support is in the ₹2,435-₹2,380 region. A fall below ₹2,380 is less probable. A fresh rally from the ₹2,435-₹2,380 support zone will have the potential to target ₹4,000 and higher levels over the long term.

Since you have not mentioned your actual buy price, it will be difficult to give an exact strategy to accumulate this stock. However, we are giving below the levels to buy this stock for new investors who want to enter this stock. Please see if that can help you. Long-term investors who want to enter this stock can buy 30 per cent of the intended amount at current levels. Buy another 40 per cent at ₹2,620 and the balance 30 per cent at ₹2,420. So, your average purchase price will be at ₹2,624.50. Keep the stop-loss at ₹2,020. Move the stop-loss up to ₹2,450 as soon as the stock moves up to ₹3,300. Move the stop-loss further up to ₹3,100 as soon as the stock touches ₹3,700. Book profits at ₹3,900.

I am holding Tata Elxsi shares at an average price of ₹1, 200. Given the bearish bias prevailing in the market, can you please guide me on how to approach my holding?

Ramesh

Tata Elxsi (₹8,333): Firstly, congratulations to you for catching the stock almost at bottom and then holding on to it so far. It is now important to protect your profits. Human psychology tends to neglect any sharp fall in price as you have bought the stock at a much lower level. The stock has turned volatile over the last few months. First and foremost, keep a stop-loss at ₹6,340 so that you lock in some profits on this holding. If the stock falls to this level, exit and do not worry about missing the top. You will still make good money out of this position. However, the chances are less for the stock to fall to ₹6,340 from here.

As seen from the charts, the chances are high for the stock to move up towards ₹9,600-₹9,800 in the next one month. Exit 40 per cent of your holdings at ₹9,650. Then move the stop-loss for the balance 60 per cent of your holdings to ₹7,050. A strong break above ₹9,800 will pave the way for the next targets of ₹10,500-₹11,000 thereafter. Exit the balance holdings equally at ₹10,350 and ₹10,850. If the stock continues to move up after you exit it, do not worry about the opportunity loss, it can always happen. You will get some other stock to enter at good levels at that time. So, once you sell all your holdings, forget this stock and do not track the prices.

I have bought Advanced Enzyme Technologies at ₹386.  What is the long term prospective?

B S N Prasad

Advanced Enzyme Technologies (₹286.75): The stock has been in a strong downtrend over the last one year. It made a high of ₹503 in May last year and has been coming down continuously. There is support in the ₹255-₹250 region. You can consider buying more at current levels.

Keep a stop-loss at ₹235 and hold it. Move the stop-loss up to ₹265 when the stock moves up to ₹310. Move the stop-loss further up to ₹330 as soon as the stock touches ₹400 on the upside. Revise the stop-loss further up to ₹410 when the stock rises to ₹460. Exit the stock at ₹500. If the stock breaks below ₹250, it can fall to ₹210 and may take a long time to recover. So, make sure to stick to the stop-loss level mentioned above.

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