What is the three-month outlook for the stock of Reliance Industries (RIL)?
Reliance Industries (₹2,499.30): Structurally the stock has been in a strong uptrend since 2017. Within this, the price action since July 2020 has been in the form of a bull channel. Since May this year, the stock has been coming down within this channel. The chances are high for RIL to come down further to test ₹2,350-2,340 – the lower end of the channel by this month itself or next month. We expect the channel support at ₹2,340 to hold well and produce a bounce. That fresh rally will have the potential to target ₹3,100-3,200 in the first quarter of 2023. In case the stock breaks below ₹2,340, the chances for which are less though, a fall to ₹2,100 is possible.
This fall, if it happens, can be seen by this year-end. Thereafter, the stock can reverse higher and resume the uptrend. Investors wanting to enter this stock can wait for a dip. Buy this stock at ₹2,370. Accumulate the stock at ₹2,130, if a fall below ₹2,340 is seen. Keep a stop-loss at ₹2,030. Trail the stop-loss up to ₹2,640 as soon as the stock moves up to ₹2,920. Move the stop-loss further up to ₹2,930 when the stock touches ₹3,080. Exit the stock at ₹3,180.
What is the long-term outlook for the stock of Finolex Industries? I have bought this stock at ₹154.
Finolex Industries (₹143.05): The stock surged to a high of ₹264.32 in October last year and has been in a strong downtrend since then. The price action since May this year indicates that the downtrend could be forming a bottom. Strong support is at ₹125 which has been holding very well since May and limiting the downside. Below that, there is another strong trendline support at ₹120. As such, a fall below ₹120 is unlikely. However, the stock is not showing strength now. So, a sharp rise from here may not happen immediately. Instead, the stock can run into a sideways consolidation between ₹125 and ₹160 or ₹120 and ₹170 over the next few months.
Thereafter, a fresh breakout above ₹170 will indicate a trend reversal. That break will then pave way for a strong rally to ₹300-310 over the next couple of years after the breakout happens. You can accumulate the stock on dips at ₹130. Keep a stop-loss at ₹105. Trail the stop-loss up to ₹170 when the stock rises to ₹220. Move the stop-loss further up to ₹260 when the stock touches ₹290 on the upside. Exit the stock at ₹305.
I have been accumulating the shares of Chemcrux Enterprises. My average buy price is ₹224. Can I accumulate this stock? What is the long-term outlook?
Chemcrux Enterprises (₹445.90): This stock has surged about 135 per cent in just the last four months. There is a danger of seeing a sharp correction in case a turn-around happens. The stock has already come off from the high of ₹501 made in August. If this fall extends, there is room to test ₹350-340 on the downside. So, it is not advisable to accumulate at current levels.
Instead, you will have to be careful and protect your profits. You can exit and book profits at least 30 per cent of your holdings at current levels. Place a stop-loss at ₹330 for the balance. If a fall to ₹350 is seen, you can consider accumulating in small quantity, may be to the same quantum for which you have booked profits. Move the stop-loss up to ₹430 when the stock rises to ₹520. Exit the entire holdings at ₹540.