Indian Railway Catering and Tourism Corporation (IRCTC) is trading in the range of ₹820-₹850. Will it reach ₹1,000? Kindly advise on the technical outlook for this stock.

S Gopalakrishnan

IRCTC (₹864.55): After tumbling to a low of ₹639 and recovering back sharply from there, the stock of IRCTC has been stuck in a narrow range of ₹780-₹890. The near-term outlook is mixed. The sideways consolidation can continue for a prolonged period of time. The range of trade could even become wider between ₹780 and ₹950. Within this the chance of a fall to ₹720 and even ₹670 cannot be ruled out. But such a fall will be a very good opportunity to buy the stock from a long-term perspective. If you are a long-term investor, you can accumulate this stock in the ₹720-₹670 region. A strong rise past ₹950 is needed from here to avoid the fall to ₹720-₹670 mentioned above. In that case ₹1,000 and ₹1,100 levels can happen thereafter. So, seeing a level of ₹1,000 is possible. But it might take some time and you will have to wait patiently.

I bought Aurobindo Pharma at ₹ 1,016. Please share the long-term outlook.

Sri

Aurobindo Pharma (₹688): The strong uptrend that was in place since March last year made a top in May this year. Thereafter the trend has reversed, and the stock has tumbled over 35 per cent from the high of ₹1,064. Support is at ₹638. If the stock manages to sustain above this support, a bounce-back move and a sideways consolidation between ₹638 and ₹800 is a possibility.

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However, the stock will have to rise past ₹800 decisively to become bullish again. But on the charts, that looks less probable. So, the stock can remain under pressure to break below ₹638 first rather than breaking above ₹800 from here itself going forward. Such a break can drag it ₹585-₹565. If you are a long-term investor and withstand the loss, then you can wait and consider buying more at ₹645 and then at ₹585. Then hold the stock for the long-term with a stop-loss at ₹530.

I have bought 90 shares of Aurobindo Pharma at ₹795 and 66 shares of Repco Home Finance at ₹352. Should I sell or average at lower levels?

Ramanathan M

Repco Home Finance (₹293.2): The uptrend that has been in place since May last year is under threat. There is a head and shoulder reversal pattern formation visible on the chart. The neckline support of this pattern is coming up at ₹262. Another support is at ₹250. A strong break below ₹262 and a subsequent fall below ₹250 will confirm this pattern. Such a break will then have potential to drag the stock down to ₹200 and even ₹150 in the coming months. The stock will have to rise past ₹335 decisively to negate the fall below ₹250 and in turn become bullish to see ₹400 levels again.

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You can either exit the stock at current levels itself or hold it with a stop-loss at ₹245. If you choose to go for the second option, then please note that the chances of getting the stop-loss is high as the bias is bearish on the charts and so you may incur more loss than exiting now.

Aurobindo Pharma (₹688): Please refer to the previous response for the outlook.

I have bought shares of Sonata Software at ₹921. Please let me know the short-term outlook for this stock.

Ramanji Reddy B

Sonata Software (₹862.45): The sharp fall in the stock of Sonata Software in the third week of October has broken the uptrend decisively. The bounce-back thereafter in the last couple of weeks indicates a corrective bounce within the fresh downtrend. The stock can now find resistance in the ₹920-₹950 region if the bounce-back move continues.

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A fresh fall either from here itself or from the ₹920-₹950 region will have the potential to drag the stock down to ₹690 – the 38.2 per cent Fibonacci retracement level or ₹660 – a trend line support in the coming weeks. You can consider exiting the stock in the ₹900-₹910 region. If the stock starts to fall again from here itself, then exit on a break below ₹830.

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