Technical Analysis

Tech query: Phillips Carbon Black tests a key hurdle

Yoganand D | Updated on January 30, 2021

What is the outlook on Phillips Carbon Black?

Rohit Joshi

Phillips Carbon Black (₹190.9): The stock has been on an intermediate-term uptrend, forming higher peaks and troughs since recording a 52-week low at ₹54 in March 2020. While trending up, the stock emphatically breached a key long-term resistance level of ₹140 in early November and continued to trend upwards with minor corrective decline in December.

It trades well above the 50- and 200-day moving averages. However, the stock has encountered the next significant long-term resistance at ₹200 last week, and tested this level. It can witness a correction from current levels and decline to the immediate base level of ₹180 levels.

A conclusive slump below this level can pull the stock down to the next support level of ₹160 and then to ₹140 levels. A downward breach of the long-term support at ₹140 can start to threaten the uptrend and pull the stock down to the subsequent base level of ₹110, which is the next vital base to note.

Thereafter, supports are placed at ₹100 and ₹80 levels. On the upside, an emphatic break above the long-term resistance level of ₹200 can underpin the uptrend and take the stock higher to ₹220 and then to ₹240 levels. A further rally above ₹240 can take the stock northwards to ₹280 levels over the long run. Investors with a long-term horizon can stay invested with a stop-loss at ₹110 levels.

I have bought share of Coal India at ₹143.7. What will be target in future because it is declining now. Should I hold or sell?

Bhanuthej Bhat

Coal India (₹125.9): The stock has been consolidating sideways broadly in the ₹110-150 band since last March. After encountering resistance at the upper boundary in early January this year, the stock began to decline, experiencing selling interest, but again became range-bound. Over the past two weeks, it has been declining; last week, it tumbled 5.5 per cent, declining below a key base at ₹130.

This fall has strengthened the long-term downtrend that has been in place since the 2015 high of ₹447 levels. The stock needs to move out the sideways range to witness a strong rally to ₹180 and then to ₹200. The next resistances are at ₹225 and ₹240, which is a key long-term hurdle to note.

On the downside, a decline below ₹120 can pull the stock down to the lower boundary at ₹110. The next key support is at ₹100. You can exit the stock on a decline below ₹120 and consider repurchasing it at lower levels lower levels with a long-term stop-loss at ₹100.

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Published on January 30, 2021

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