Technical Analysis

Tech Query: What is the five-year outlook for Engineers India stock?

Gurumurthy K BL Research Bureau | Updated on September 18, 2021

I want to invest in the stock of Engineers India Ltd. My investment horizon is five years. Please advise.

Vikas Sharma

Engineers India (₹73.8): The stock of Engineers India was in a downtrend from January 2018 to March 2020. This downtrend had found strong support at ₹57 from a long-term trend line coming up from the low of 2001. The stock made a low of ₹49.2 in March this year and started to rise. The long-term trend line support is currently at ₹62. The stock can be bought at current levels. However, there are chances for the stock to oscillate in a broad range of ₹61-96 for several months. So, one will need to wait patiently for a breakout. But as long as the trend support at ₹61 holds, the chances are high for the stock of Engineers India to break ₹96 eventually in the coming months. Such a break will then pave the way for a fresh rise to ₹160-170. Book profits in the ₹160-170 region. In case the stock breaks below ₹61, it can fall to ₹45. Since your investment horizon is five years, you can accumulate the stock at the levels of ₹47. Keep the stop-loss at ₹34.

I would like to accumulate Tata Power. What is its technical outlook?

Sanjay Kaimal

Tata Power Company Limited (₹137.55): The stock of Tata Power Company Limited has been in an uptrend since May last year. This uptrend is coming close to the previous tops. There is limited room left on the upside from current levels. The levels of ₹147, ₹152 and ₹159 are important resistances ahead. Since the stock has had a strong run-up, it is unlikely to breach the previous highs from here. As such we can expect the stock to make a top anywhere in the broad ₹147-₹159 resistance zone and then reverse lower. Such a reversal can drag the stock lower to ₹120-₹115 initially. A strong break below ₹130 can trigger this fall. Although you have not mentioned your average purchase price, it is not advisable to accumulate the stock at current levels. Instead, you can consider either booking profits completely in the ₹147-₹159 region or at least for 50 per cent of your holding. If you are going for the second option, then keep a stop-loss at ₹127 for the rest of the 50 per cent holding and exit if the stock falls below ₹130.

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Published on September 18, 2021

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