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

I hold shares of Wipro. What is your view on the stock?

Shrenik Jhaveri

Wipro (₹553.7): The stock of Wipro took support at its long-term base at ₹315 in May 2013 and started moving up. This rally gained strength and breached a key resistance at ₹450, which was limiting the stock’s rally in August 2013.

With this, the stock resumed its long-term uptrend. However, after registering a multi-year high at ₹676 in March 2015, the stock changed direction and began to decline. But a key support in the band between ₹510 and ₹520 arrested the stock’s fall in April 2015.

Since then, it has been in a sideways consolidation move in the wide band between ₹510 and ₹600. Last week, Wipro encountered a key resistance at ₹600, which is the upper boundary of the sideways range, and fell 7 per cent following muted fourth quarter results. The stock now tests support at ₹550. An emphatic fall below this level can drag it down to the lower boundary at ₹510 in the short to medium term.

Further fall below ₹510 can pull the stock down to ₹490 which is a key trend-deciding level for the long-tem uptrend. A slump below ₹490 will alter the uptrend and drag the stock down to ₹450, a long-term support level that can arrest its downtrend.

In such a scenario, investors can consider exiting the stock and re-entering at lower levels. On the upside, a rally above the immediate resistance level at ₹570 can push the stock higher to ₹600 in the medium term.

However, to strengthen the uptrend, the stock needs to decisively break through the upper boundary of ₹600 for an upmove to ₹650 or ₹670 in the long run. Investors with a long-term view can buy above ₹600 with a stop-loss at ₹570 levels.

I have shares of Amtek Auto and Raymond bought at average prices of ₹175 and ₹460, respectively. Should I buy more at the current levels to average or book loss? I am holding these for more than a year.

R C Bhatia

Amtek Auto (₹39.9): Following a sharp fall in August 2015, the stock of Amtek Auto found support at around ₹26 in early September. It has been on a sideways move since then, in a wide range between ₹26 and ₹52.

Within this range, the stock is testing a resistance at ₹42. A strong breach of this level can take it higher to ₹52 in the short term. But failure to breach the level can pull the stock down to ₹32 and then to ₹26 in the medium term.

You can wait a few more weeks and then consider averaging above ₹52 while maintaining a stop-loss at ₹40.

A decisive breakthrough of ₹52 can take the stock higher to the long-term resistance zone between ₹90 and ₹100 in the long run. Further rally beyond ₹100 can take the stock northwards to ₹130.

Raymond (₹420.6): Last week, the stock surged 5.3 per cent, altering the downtrend that has been in place since December 2014 and breaching an immediate resistance at ₹410.

After retracing the 50 per cent Fibonacci retracement level of its prior uptrend, the stock found support at around ₹375 last August and again in February this year. Subsequently, the stock began to trend up and has been on a short-term uptrend.

You can consider averaging the stock during declines while retaining a stop-loss at ₹370. Medium-term targets are ₹460 and ₹480. A strong rally above these levels can take the stock northwards to ₹500 and then to ₹540 in the long term.

Conversely, if the stock breaches the key support level of ₹375, bears can gain momentum and drag it down to the levels of ₹350 and ₹330.

Send your queries to techtrail@thehindu.co.in

Related Topics
comment COMMENT NOW