Technical Analysis

Tech Query: What is the outlook for stocks of HCL Tech, Tata Motors?

Gurumurthy K | | Updated on: Nov 27, 2021
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I have purchased 50 shares of HCL Technologies at ₹1,205 per share. What is the outlook for this stock?

Ishwar Parik

HCL Technologies (₹1,107.75) : The stock has been in a short-term downtrend since the last week of September. It made a high of ₹1,378 in September and has been coming down since then. However, there is a strong support coming up in the ₹1,020-₹1,000 region. Also, the 38.2 per cent Fibonacci retracement support is at ₹995. As such, the current downmove is likely to halt anywhere in the ₹1,020-₹995 region.

There is a strong likelihood of the stock bouncing back from this support zone towards ₹1,200 levels again. A further rise past ₹1,200 will then pave the way for a fresh rise to ₹1,500 and higher levels over the medium term. Assuming that you are a long-term investor, it is suggested to accumulate the stock as it falls to ₹1,030. Keep a stop-loss at ₹955 and hold it for the long-term target of ₹1,550. In case the stock breaks below ₹995 decisively, it can fall to ₹900-₹875 and even ₹800, going forward. So, watch the price action in the ₹1,020-₹995 region carefully.

I bought Tata motors at an average price of ₹503.13. Please let me know the medium to long term outlook for this stock.

Saksham Neekhare

Tata Motors (₹460.25) : The stock of Tata Motors is showing sign of a top. The stock seems to be struggling to see a strong follow-through rise above ₹500. Immediate support is at ₹450. If it manages to sustain above this support, a rise back to ₹500-₹550 is possible. However, ₹560 is a strong trend line resistance and that can cap the upside.

As such, a sideways consolidation between ₹450 and ₹560 is a possibility if Tata Motors sustains above ₹450. But considering the overall weakness in the equity markets, the chances of a break below ₹450 cannot be ruled out. Such a break can drag the stock down to ₹360-₹340 over the next couple of months. You can consider either of these two options: One, keep a stop-loss at ₹435 for the current position and exit on break below ₹450. Then you can consider buying the stock again afresh at ₹370. Second, if you can withstand the loss and have a long-term horizon, accumulate the stock at ₹370 and ₹355. In this case have a stop-loss at ₹310.

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Published on November 27, 2021

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