I had purchased shares of Deepak Fertilisers & Petrochemicals Corporation at ₹799. I am a long-term investor. What is the outlook for the stock?

Anubhav Kumar Jain, Uttar Pradesh

Deepak Fertilisers & Petrochemicals Corporation (₹645): The broader trend has been down since November last year. The stock made a low of ₹512.80 in March this year and has recovered slightly from there. However, this recovery seems like a corrective bounce rather than a trend reversal. The price action over the last three months indicates that the stock is struggling to get a strong follow-through rise above ₹650. However, at the same time, it is not coming down below ₹600 as well. That leaves the picture mixed. A decisive break above ₹700 is needed to signal that the downtrend has reversed. Only in that case, the outlook will turn bullish to see a rise to ₹800 and higher levels.

On the other hand, a fall below ₹600 can drag it down to ₹500 – the next important support. An eventual break below ₹500 will be very bearish to see ₹400 and lower levels on the downside. Broadly, ₹500-700 can be the broad trading range. A breakout on either side of ₹500-700 will give clarity on the next move. Since the outlook remains unclear, we suggest you to exit the stock and reinvest the money in some other stock that looks strong on the charts. May be you can consider IndiaMART InterMESH explained in the next question.

What is the outlook for IndiaMART InterMESH?

Ghanshyam Soni, Jodhpur 

IndiaMART InterMESH (₹2,678.05): The long-term picture looks very bullish for IndiaMART InterMESH. The stock was in strong downtrend since 2021. But that seems to have reversed. The price action in 2022 indicates a bottom formation. The subsequent rise in 2023 signals that the trend has reversed and a fresh leg of upmove has begun. Strong support is in the ₹2,500-2,450 region. The presence of the 100-Week Moving Average and a long-term trendline makes the ₹2,500-2,450 region a very strong support. Immediate resistance is at ₹2,800.

A strong break above it can take the share price up to ₹3,500-3,800 over the next two-three quarters. An eventual break above ₹3,800 will then clear the way for IndiaMART InterMESH share price to target ₹4,450 over the next one-two years. If you are a long-term investor, buy IndiaMART InterMESH at current levels. Accumulate at ₹2,560. Keep a stop-loss at ₹2,230. Trail the stop-loss up to ₹2,850 as soon as the stock moves up to ₹3,600. Move the stop-loss further up to ₹3,850 when the price touches ₹4,100. Exit the stock at ₹4,400.

I have shares of Rama Steel Tubes. My purchase price is ₹42. Shall I continue to hold the stock or exit and book loss? What is the long-term outlook?

Selvaraj P

Rama Steel Tubes (₹38.83): The stock has been in a strong uptrend since the second half of 2021. The uptrend is intact. Strong support is in the ₹35-34 region. Resistance is at ₹45. There are chances to see a sideways consolidation between ₹34 and ₹45 for some time. But the bias is positive. So, we can expect Rama Steel Tubes share price to breach ₹45 eventually. That will boost the bullish momentum. It will also trigger a fresh leg of rally.

Such a break will take Rama Steel Tubes share price up to ₹54 in the coming months. You can consider accumulating the stock at the current levels. Keep a stop-loss at ₹32. Trail the stop-loss up to ₹45 as soon as the stock moves up to ₹48. Move the stop-loss further up to ₹47 when Rama Steel Tubes share price touches ₹51 on the upside. Exit the shares at ₹54. The outlook will turn bearish only if the stock declines below ₹34. In that case, a fall to ₹28 can be seen.

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