I have shares of ITC bought at ₹410. Can I accumulate at this juncture? What is the outlook?
S Gopalakrishnan, Cuddalore
ITC (₹443.20): On the charts, the picture is not looking rosy for ITC. The fall, from the high around ₹500 made in July, has happened from a very long-term trendline resistance. This gives a signal that a top is in place already. So, the chances are very less for the stock of ITC to see a strong rise from here.
The stock is facing strong resistance around ₹460 now. The daily chart is looking weak. ITC can fall to ₹410-400 in the short term. A break below ₹400 can drag the stock further down to ₹380-370. In case ITC manages to sustain above ₹400 and bounces back, it can rise to ₹470 and ₹500 again. However, a rise past ₹500 might not be very easy now and it will need some strong trigger. So a sideways movement between ₹400 and ₹500 can be the best-case scenario for ITC, going forward. So, we suggest you exit ITC and book profits at the current level. Because there is a danger of getting stuck inside a range. You can reinvest the sale proceeds in some other good stock that has potential to rise from here.
I hold shares of Easy Trip Planners (EaseMyTrip). What is the outlook for this stock? If I want to accumulate, where should I buy again?
EaseMyTrip (₹42.76): Since the stock has got listed in 2021 only, we have limited price data to do a detailed technical analysis. As seen from the chart, EaseMyTrip share price is in a strong downtrend. Although the stock has been oscillating around ₹40 over the last few weeks, there is no clear sign of a bottom.
Strong resistance is in the ₹47-48 region. A decisive break above ₹48 is needed to turn the outlook bullish. Only in that case, EaseMyTrip share price can rise to ₹57-60. For the break and rise above ₹48 to happen, the stock will have to sustain above ₹40. Even then, the rise may not happen quickly and will take some time. Support is around ₹39. A break below it can drag the stock down to ₹34-33. You have not mentioned your buy price. However, since the picture is not looking very strong, we suggest you exit the stock.
I have shares of Shoppers Stop. My average purchase price is ₹775. Please advise what should I do now.
Iqbal Ahmed Khan
Shoppers Stop (₹689.40): The stock has been under pressure since mid-August this year. However, there is a crucial trendline support for Shoppers Stop at ₹665 and a moving average support is at ₹625. If the stock breaks below ₹665 now, it can fall to ₹625. A further break below ₹625, if seen, will indicate a trend reversal and will be bearish. In that case, Shoppers Stop share price can tumble towards ₹500 and even lower going forward.
But looking at the price action on the chart, a break below ₹665-625 looks less likely. The reduced pace of fall over the last few weeks indicate that the stock can reverse higher from around ₹665 itself. Such a reversal can take Shoppers Stop share price up to ₹850-900 again. Accumulate on dips at ₹670. Keep a stop-loss at ₹590. Move the stop-loss up to ₹735 as soon as the stock moves up to ₹780. Move the stop-loss further up to ₹810 when the price touches ₹850. Exit the shares at ₹880.
Send your questions to firstname.lastname@example.org