I hold shares of Canara Bank bought at ₹252. What is the technical outlook? Will it be a right choice to hold it long term?

Sandeep A

Canara Bank (₹306.70): The trend is up since May 2020. Currently, the upmove has paused and the price is consolidating. Immediate support is at ₹300. Below that, ₹265 is the next strong support. The overall uptrend is still intact. The chances are looking high for the stock to sustain above ₹300, going forward. However, there is not much room left on the upside. Strong resistances are at ₹380 and ₹435. So, you may have to consider exiting your positions when the above-mentioned resistance is tested. 

Keep a stop-loss at ₹260. Move the stop-loss up to ₹290 when Canara Bank share price touches ₹345. Exit 30 per cent of your holding at ₹370. Revise the stop-loss up to ₹325 for the rest of the holding. Move the stop-loss up to ₹370 when the price rises to ₹410. Exit the balance holdings at ₹420. As mentioned above, the levels of ₹380 and ₹435 are very significant resistances. We can expect the uptrend to end anywhere here and see a reversal. So, you have to make sure to exit your positions as mentioned above.

What is the outlook for the stock of Barbeque-Nation Hospitality? I have purchased the shares around ₹1,200. Where should I accumulate and exit?

Mangesh Sri

Barbeque-Nation Hospitality (₹636.70): The stock has been in a strong downtrend since November 2021. The bounce from the low of ₹879.25 made in May 2022 was just a corrective rally. The price has almost halved from your entry level. One important point that we keep repeating in this column is to have a stop-loss always in place whenever you take a position in the market. That will aid in limiting the loss as well as exit some of the bad positions that we take. Even if you accumulate at current levels, your average holding price will come around ₹920.

Looking at the charts, it looks unlikely for the stock to go up towards ₹900-1,000 at least by this year-end. Because there are strong resistances at ₹670, ₹720 and ₹745. So, it is not worth the wait. We suggest you exit the stock at current levels and accept the loss. It can be a very difficult decision. But exiting this position with a loss will keep you alert when you take your next position. As we mentioned above, always take positions with a stop-loss and adhere to it.

I hold shares of HEG. My purchase price is ₹3,366. What is the outlook for this stock? Can I continue to hold or exit?

Anand, Hyderabad

HEG (₹1,146.80): Your case is also similar to that of the previous question. The price of HEG has halved from your purchase level. The same mistake of not having a stop-loss makes many market participants to retain a wrong position. They develop a hope that the share price will come back towards their purchase price and give profit. But that does not happen most of the times.

Coming to the stock of HEG, it is consolidating in a broad range within its downtrend. Resistance is in the ₹1,480-1,500 region. A strong rise past ₹1,500 is needed for the stock to get a breather. Only in that case, the share price of HEG can rise to ₹2,500. But on the chart, there is no sign of that happening now. As long as the stock remains below ₹1,500, there is still room left for more fall. Support is around ₹950. A break below it can drag the stock down to ₹700-670 in the coming months. So, it is better for you to exit the stock and accept the loss.

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