Technical Analysis

Tech query: Petronet LNG consolidates in a wide range

| Updated on April 03, 2021

I want to invest in the stock of Petronet LNG and RBL Bank for the long term. Please let me know the technicals of these two stocks.

Rajesh Reddy

Petronet LNG (₹227.7): After bottoming out in March 2020, the stock of Petronet LNG was on a medium-term uptrend until it encountered a key resistance in the band between ₹270 and ₹280 in early July 2020. Thereafter, the stock started to consolidate sideways in a wide range between ₹210 and ₹270. The key long-term resistance in the band between ₹270 and ₹280 has been limiting the upside since last July.

 

In January this year, the stock encountered a key resistance at ₹270 and started the decline. It has been in a medium-term downtrend since then. However, it found support at ₹220 last week and pauses now. An immediate significant support is pegged in the band between ₹200 and ₹210 for the stock that could arrest the on-going downtrend within the sideways consolidation phase. An upward reversal from the long-term support zone between ₹200 and ₹210 is possible. You could consider investing in the stock at around this support band, with a long-term stop-loss at ₹185. An emphatic break-out of this key immediate resistance level of ₹240 can take the stock higher to the upper boundary of the sideways movement, that is ₹270-280 band, over the intermediate term. A conclusive breakthrough of ₹280 can push the stock northwards to ₹300 and then to ₹320 over the long run. Conversely, if the stock tumbles below ₹200, a decline to ₹175 is possible, the next key base level to note.

 

RBL Bank (₹216.1): The stock of RBL Bank was on an intermediate-term uptrend from the April 2020 low of ₹101 until it encountered a key resistance at ₹275 in early January this year. Subsequently, the stock changed direction has been in a medium term downtrend since then . However, the stock trades above a key base level of ₹205 after testing this level recently. A decisive fall below this level can pull it down to ₹180 and then to ₹160. Hence, you can wait and consider buying the stock at around ₹180 with a long-term stop-loss at ₹150 levels. On the upside, if the stock decisively moves beyond ₹235 it can witness an up-move to ₹250 and then to ₹260 levels. A clear breakthrough of ₹260 will pave the way for an up-move to ₹275. To reinforce the bullish momentum the stock needs to emphatically break through the long-term barrier at ₹275. Such a break can take it northwards to ₹300 levels initially and then to ₹325 over the long run. In that scenario, you can buy the stock above ₹235 levels with a stop-loss at ₹175 levels.

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Published on April 03, 2021
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