I have purchased shares of Graphite India at ₹428.22. What is the outlook?
U L Kamath
Graphite India (₹380): The stock has been in a strong downtrend since May 2021. However, the price action since September this year indicates a base formation above ₹350. Additionally, there are strong trendline supports at ₹330 and ₹310. As such, ₹350-300 can make a strong support zone. This leaves the chances of the downtrend coming to an end high. Resistance is in the ₹450-460 region. A strong break above ₹460 will give a confirmation on the trend reversal. That break can take the stock of Graphite India up to ₹500 and ₹550 initially.
From a long-term perspective, the trend reversal will have potential to take the stock up to ₹800 again over the next one-two years. Assuming that you are a long-term investor, accumulate the stock at current levels. Keep a stop-loss at ₹280. Move the stop-loss up to ₹430, when the stock rallies to ₹540. Move the stop-loss further up to ₹630, when Graphite India touches ₹720 on the upside. Exit the stock at ₹800.
I have invested in the shares of Computer Age Management Services (CAMS). But the prices have been falling over the last few weeks. I am in loss now. What should I do?
CAMS (₹2,324): First, you have not mentioned your purchase price and the time-frame that you intend to remain invested. So, it is very difficult to give a precise advice. However, we will give the outlook for this stock here. You can take a decision based on your risk appetite. The stock has been broadly range bound between ₹2,000 and ₹2,700 since mid-February. Within this, ₹2,150-2,700 has been the trading range since mid-June. Unless the stock breaks out on either side of this range, the next direction of move cannot be determined.
Last week, the stock tested a low of ₹2,250 and is attempting to bounce; ₹2,400 is an important resistance which has to be broken for the stock to move up to ₹2,700 — the upper end of the range. As mentioned above, a range breakout is needed to get a clear picture of the next move. A strong break above ₹2,700 will take the stock of CAMS up to ₹3,200 initially. It will also keep the chances alive for the stock to revisit ₹4,000 levels. In case of a break below ₹2,150, the stock can fall to ₹2,000 and lower levels. From the very limited data available for analysis, our bias is that the chances are high for the stock to sustain above ₹2,150 and break above ₹2,700. But that might take a lot of time as well.
I have shares of Supriya Lifescience at an average price of ₹325. Should I hold it or exit? Please advise.
Supriya Lifescience (₹244.60): There is very limited data available as this stock got listed only in December last year. So, it is very difficult to do a proper technical analysis and give an outlook. However, based on the data available, we see that there could still be room for the stock to fall to ₹210-₹200. Strong resistances are at ₹280-290 and then at ₹320.
A strong rise past ₹320 will be needed for the outlook to turn bullish. In that case, the stock of Supriya Lifescience can rise to ₹350 and ₹380. However, as seen from the chart, the chances are looking high for the stock to fall to ₹210-200 first. So it is better to exit the stock with a loss now. Maybe you can consider reinvesting the sale proceeds in some other stock that looks good to buy now.