Technical Analysis

Tech Query: SBI Life Insurance, Syngene International

Yoganand D | Updated on December 05, 2020

Here are the answers to readers’ queries on the performance of their stock holdings.

What is your view on SBI Life ?

RT Rajasekaran

SBI Life Insurance Company (₹862.5): The stock of SBI Life Insurance Company took support in the band between ₹500 and ₹515 in February 2019 and began to trend upwards. But the stock encountered a significant resistance at ₹1,000 in October 2019 and again in January 2020.

Subsequently, the stock began to decline along with the broader market sell-off in the months of February and March. After retracing the previous up-move completely, the stock took support from the long-term base zone between ₹500 and ₹515 in March this year. It has been in an intermediate-term uptrend since then. Follwoing a corrective decline, it recorded a low of ₹755 in late October and continued to trend upwards thereafter. It has been on a short-term uptrend since then. But the stock now faces a key resistance ahead at ₹900.

An emphatic break above this level is needed to reinforce the uptrend and push the stock northwards to the long-term resistance level of ₹1,000. A strong breakthrough of this resistance is required to underpin the bullish momentum and take the stock higher to ₹1,100 and then to ₹1,200 over the long run. On the downside, the stock can decline to the immediate support level of ₹800 if it fails to move beyond ₹900. A further break below the support level of ₹800 can drag the stock down to ₹750 and then to ₹700. As long as the stock trades above the key long-term support level of ₹700, the uptrend will remain intact. You can buy the stock on declines with a long-term stop-loss at ₹680. Key supports below ₹700 are at ₹660 and ₹600.

What are the prospects for Syngene International purchased at ₹565 for short, medium and long terms?

S Vanaja

Syngene International (₹572.3): The stock of Syngene International has been on an intermediate-term uptrend since it recorded a 52-week low at ₹201 in late March this year.

In late September, it registered a new high at ₹596 and started to correct. Since then, it has been in a sideways movement in the band between ₹520 and ₹600.

A strong break above ₹600 will strengthen the uptrend and take the stock northwards to ₹650 and then to ₹700 over the medium- to long-term time-frame. But, a plunge below the lower boundary can pull the stock down to ₹500 and then to ₹470 over the medium term.

The next supports are at ₹450 and ₹400. The current uptrend will remain in place as long as the stock trades above the crucial long-term support level of ₹350. Investors with a long-term view can stay invested with a stop-loss at ₹325.

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Published on December 05, 2020
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