Technical Analysis

UltraTech Cement is getting set

Yoganand D | Updated on January 23, 2018 Published on April 26, 2015




The long-term uptrend will continue as long as the stock trades above ₹1,500 levels

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

Please suggest the short, medium, and long-term targets for UltraTech Cement.

Sree devi

UltraTech Cement (₹2,707.1): Since taking support at around ₹270 in late 2008, the stock of UltraTech Cement has been on a long-term uptrend. Medium-term trend is also up, but the short-term trend is down. The stock has been trending down since registering a new high at ₹3,399 in early March. Last week, it fell 3.5 per cent strengthening the downtrend.

However, the presence of a key support band between ₹2,650 and ₹2,700 can arrest the stock's decline temporarily. A decisive breakthrough of this base level can pull the stock down to ₹2,400 in the medium term. A further decline below ₹2,400 level would mar the medium-term uptrend and pull the stock down to ₹2,180 and ₹2,000. The long-term trend will remain up as long as the stock trades above ₹1,500 levels after which the stock can revisit ₹3,000 and the ₹3,400-₹3,500 zone.

Please provide the long term view for Superhouse.

Anil Dixit

Superhouse (₹210.9): Following a sharp rally to ₹295 levels, the stock encountered resistance and changed direction in October 2014. Since then, it has been on a sideways consolidation phase in the wide band between ₹200 and ₹260 with negative bias. An emphatic breach of the lower boundary at ₹200 will strengthen the bearish momentum and drag the stock down to ₹175 and then to ₹155.

However, an upward reversal from the lower boundary will keep the sideways phase alive and the stock can move within that wide band. To reinforce the bullish momentum, a conclusive rally above ₹260 is required to take the stock northwards to ₹280 and ₹300 levels. A fall below ₹155 will mitigate the stock’s long-term uptrend and pull it down to ₹125 and then to ₹100.

Please give your views on Prakash Industries and Mastek

Randhir Chaudhry

Prakash Industries (₹41.2): The sharp rally of the stock from March to May 2014 came to an end after encountering a significant resistance at ₹120 levels. After retesting this resistance in July 2014, the stock reversed direction and has been on an intermediate-term downtrend. Both medium and short-term trends are down as well. Recently, the stock met with an important resistance at around ₹50 and resumed its downtrend, which is likely to reach the support level of ₹35.

A downward breakthrough of ₹35 will accelerate the stock's downtrend to ₹30 and then to ₹26 in the medium term. But a conclusive rally beyond ₹50 will alter the short-term downtrend and take the stock upwards to ₹65 and then to ₹70 levels. Next key resistances are pegged at ₹85 and ₹100.

Mastek (₹389): Taking support at ₹73 in late 2011, the stock of Mastek bottomed out. It has been on a long-term uptrend since then.

However, the stock encountered a significant long-term resistance zone between ₹430 and ₹450 this January and has been on a sideways move. It struggled to break this resistance zone and started falling recently. Immediate key support is at ₹370 and a decisive breach of this level will intensify the bearish momentum and pull the stock down to ₹320 in the medium term. Subsequent key supports are placed at ₹300 and ₹260.

Conversely, to strengthen the uptrend, the stock needs to conclusively break the key resistance band between ₹430 and ₹450. This can pave the way for a medium-term uptrend to the levels of ₹520 or ₹630.

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Published on April 26, 2015
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