I have shares of Tata Motors at an average price of ₹452. What is the technical outlook?
Tata Motors (₹404.65): The long-term trend has been up since April 2020. Within this, the stock is now in a correction phase. The short-term outlook is negative. The down-move that has been in place since August has room to fall more. Supports are at ₹390. Below that ₹370-360 is a strong support zone. The current down-move is likely to halt here and the broader uptrend is likely to resume thereafter. Resistance is in between ₹480 and ₹500.
A strong break above ₹500 can take the stock up to ₹550-560 initially. Thereafter, a corrective fall to ₹500 cannot be ruled out. An eventual break above ₹560 can then take the stock up to ₹650 and even ₹800 from a long-term perspective. Assuming that you are a long-term investor, accumulate the stock at ₹385. Keep a stop-loss at ₹305. Move your stop-loss up to ₹430 when the stock moves up to ₹550. Exit 30 per cent of your holding at ₹650. Then move the stop-loss up to ₹560 for the balance holdings. Exit all the rest of your positions at ₹785.
I have shares of Mangalore Refinery & Petrochemicals Ltd (MRPL). My average price is ₹120. What is the outlook? How long can I hold this stock?
MRPL (₹59.35): Before going into the outlook for the stock, please understand that it is always good to develop the habit of having a stop-loss whenever you enter a position. There is a myth that stop-loss is only for traders. No. Even for investments, everyone should have a stop-loss and adhere to it strictly. However, based on the time frame of the investment, the stop-loss for the investments can be kept wider. Now, coming to your question, broadly this stock has been oscillating within a wide range for many years. The broad range of trade has been between ₹20 and ₹150.
From the charts, it looks like there is a danger of seeing ₹40 and even lower levels in the coming weeks. So instead of hoping for this stock to move up, it is better to exit the stock with a loss. Psychologically, it will be difficult to exit at current levels. But doing this will help you in the future to be aware of exiting any wrong calls with minimum loss rather than holding by having just the hope of the prices coming up.
I have shares of Deepak Nitrite bought at ₹2,250. What is the outlook for this stock? Should I continue to hold it or exit?
S. Sankaran, Chennai
Deepak Nitrite (₹2,041): The trend has been down since October last year. However, the long-term trend has been up. So, the down-move from the October 2021 high of ₹3,020 could just be a correction within the long-term uptrend. There is a cluster of supports in the broad ₹1,900-1,800 region. Indicators on the charts suggest that the corrective phase could be coming to an end. You can consider accumulating at current levels. Keep a stop-loss at ₹1,720 and hold the stock. Move the stop-loss to ₹2,320 when the stock moves up to ₹2,580.
The psychological level of ₹3,000 can be an important resistance from a long-term perspective. So, exit 40 per cent of your holdings at ₹2,920 and then bring the stop-loss up to ₹2,850 for the balance 60 per cent. A strong break above it can take the stock up to ₹3,800-4,000 over the long term. Exit the balance holdings at ₹3,700.