Technical Analysis

Your Stock Portfolio | Torrent Pharma in a medium-term uptrend

Yoganand D | Updated on November 10, 2019 Published on November 10, 2019

The stock breached 50- and 200-day moving averages; key resistance now at ₹1,850

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

What is the short-term outlook of Torrent Pharmaceuticals? I would like to buy for a short-term horizon.

Ashish

Torrent Pharmaceuticals (₹1,814.9): The stock of Torrent Pharmaceuticals in on an uptrend across all time-frames — short-, medium- and long-term. It took support at around ₹1,500 in July year and resumed the long-term uptrend.

Since July, the stock has been in a medium-term uptrend. After a minor correction in September, the stock took support at ₹1,600 in early October and continued to trend upwards; it has been on a short-term uptrend since then.

While trending up, the stock decisively breached its 50- and 200-day moving averages in late October. Moreover, the stock also broke out of a key barrier at ₹1,700 in October and extended the rally. Now, the stock faces a key resistance ahead at ₹1,850.

A strong breakthrough of this hurdle will strengthen the medium- as well as short-term uptrend and take the stock northwards to ₹1,900 and then to ₹2,000 in the ensuing weeks. A further rally beyond ₹2,000 can take the stock to ₹2,200 and ₹2,400 in the long run.

Any near-term corrective decline can find support at ₹1,700. Only a strong fall below this base will alter the short-term uptrend and drag the stock lower to ₹1,600 levels. You can consider buying the stock in declines with a stop-loss at ₹1,550 levels.

To alter the medium-term downtrend, the stock needs to decline below ₹1,600, which looks unlikely at this juncture. Subsequent medium-term supports are placed at ₹1,500 and ₹1,400. Investors with a long-term perspective can stay invested with a stop-loss at ₹1,370.

I bought shares of DHFL at an average price of ₹160. Can I buy and average or exit?

Jitendra Rathore

Dewan Housing Finance Corporation (₹23.3): The stock of DHFL is in a downtrend across all time-frames — short-, medium- and long-term.

After recording a multi-year low at ₹15.15 in late October, the stock has been moving up circuit to circuit. This kind of movement provides very less opportunity to buy or sell the stock.

Therefore, traders should be cautious while buying the stock. As long as the stock trades below the key resistance in the band between ₹55 and ₹65, the medium term outlooks will be bearish.

Avoid taking fresh positions. You can consider averaging on a strong rally above ₹65 with a fixed stop-loss.

Such a rally can take the stock higher to ₹80 and then to ₹100 in the long term and consider exiting it these levels.

On the other hand, a fall below the immediate support level of ₹20 can drag the stock down to ₹17 and then to ₹15 in the medium term.

Immediate key resistances are at ₹30 and ₹40.

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Published on November 10, 2019
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