I had bought Hindustan Copper shares at ₹114 when there was a call in the Investment Focus column in bl.portfolio. Should I continue to hold the stock or book profit?

Anupam Basu

Hindustan Copper (₹363.95): The overall trend is up. But there is a key resistance around ₹380, which is holding well for now. The stock made a high of ₹377 earlier this month and has come down slightly from there.  Immediate support is at ₹340. A break below it can trigger a corrective fall to ₹320-300 or even lower. From a long-term perspective, ₹275 is a very crucial support. The stock has to decline below ₹275 to become bearish.

Historical price movement indicates that there have been very wild swings. Looking at that, the chances of a price spike to ₹600 cannot be ruled out. However, since there is a chance for a correction, we suggest you exit 50 per cent of your holdings and book some profits. For the balance holding, keep a stop-loss at ₹260. Move the stop-loss up to ₹380 when the price goes up to ₹430. Move the stop-loss further up to ₹480 when the price touches ₹540. Exit the stock at ₹620.

I have shares of GMR Airports Infrastructure. My purchase price is ₹85. What is the short-term outlook for this stock?

Prabhakar, Andhra Pradesh

GMR Airports Infrastructure (₹80.55): The stock has been in a strong uptrend for about a year now. But the price action since December last year indicates a top formation, and resembles a head and shoulder pattern. This is a bearish reversal pattern. The neckline support of this pattern is around ₹74. A break below this support will confirm the pattern and will be bearish.

If that happens, then there is a danger of GMR Airports Infrastructure share price tumbling towards ₹55 in the coming months. To avoid this fall, the stock has to sustain above ₹74 and rise past ₹87 in the next few weeks. That would keep the uptrend intact for a rise to ₹105. However, considering the broader weakness in the markets, the chances are high for the stock to break and fall below ₹74. So, we suggest you exit the stock at current levels and accept the loss.

I bought Birlasoft shares at ₹820. I am a long-term investor. What is the outlook for this stock?

Shital Gandhi

Birlasoft (₹681.75): The uptrend in the stock had made a top of ₹861.60 in February this year and the stock price has been coming down from there. It looks like you have entered the stock at the top. The price action since the February high indicates a trend reversal. Bearish moving average on the weekly chart strengthens the bearish case. The recent reversal has also happened from a strong long-term trendline resistance.

Birlasoft share price can fall to ₹600-550 in the coming months. To become bullish again, the stock has to rise and sustain above ₹750. Only in that case, the chances of revisiting ₹850 will come into the picture again. But that looks unlikely at the moment. So, we see the stock price tumbling at least to ₹550, going forward. So, exit the stock at current levels and accept the loss.

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