I have bought City Union Bank shares at ₹140, a couple of years ago. What is the outlook for the stock?
City Union Bank (₹126.65): The stock has been oscillating in a very broad range of ₹110-205 since April 2020. Within that, City Union Bank share price has been stable and stuck in a narrow range of ₹120-145 since March this year. The region between ₹120 and ₹110 is a very strong support zone. A break below ₹110 will need some strong negative trigger. In the absence of that, the chances are high for the stock to sustain above this support zone.
As such, we can expect City Union Bank share price to surge towards ₹200-210 – the upper end of the broad range in the coming months. However, this rise would take at least another year. So, you will need to have patience to hold the stock. You can even consider accumulating at the current levels. Keep the stop-loss at ₹95. Move the stop-loss up to ₹145 as soon as the stock moves up to ₹165. Move the stop-loss further up to ₹170 when City Union Bank share price touches ₹185. Exit the stock at ₹200.
I hold shares of Happiest Minds Technologies. My purchase price is ₹989. The stock has been in a downtrend. What is the outlook? Shall I continue to hold the stock or should I exit?
Mathew Joseph, Ernakulam
Happiest Minds Technologies (₹873.95): As you had rightly mentioned, the stock has been in a downtrend. In June and July this year, the stock had struggled and failed to breach the psychological ₹1,000-mark and has come down subsequently. The region between ₹980 and ₹1,000 is a very strong resistance zone. The stock has to rise past ₹1,000 to indicate a trend reversal and turn the outlook bullish. But that looks less likely as of now. Immediate support is at ₹865.
The stock looks vulnerable to break this support. Such a break can take Happiest Minds Technologies’ share price down to ₹750 over the next three months or earlier than that. Thereafter, a bounce back move is possible. We suggest you exit the stock with a loss at current levels. You reinvest the sale proceeds from this in some other stock that has potential to rise from here. You can even consider City Union Bank and follow the strategy mentioned in the previous query.
I have bought shares of Repco Home Finance at ₹475. Should I continue to hold this stock or sell? What is the outlook?
Repco Home Finance (₹384.50): The stock has been moving up well since April this year. However, there is a very crucial resistance at ₹410 and then at ₹430. The level of ₹410 has been capping the upside over the last couple of months. Failure to rise past ₹410 and a fall below ₹360 from here can be negative for the stock. If that is the case, then Repco Home Finance share price can remain vulnerable for a fall to ₹280-260 in the coming months. It will also keep the doors open to target ₹145-140 on the downside over the long term.
Repco Home Finance share price has to breach ₹430 to become convincingly bullish. Only in that case, a rise to ₹550 and higher levels will come into the picture. At the moment, there is no clear sign on whether the stock can breach ₹430 or not. So we suggest you to exit the stock at current levels. You can consider reinvesting the sale proceeds in City Union Bank and follow the same strategy as mentioned in the first query.
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