Your Stock Portfolio: Exide Industries on the brink of reversal

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

I bought Exide Industries shares at ₹137. What are the prospects? Should I hold or book profit?

Subir R

Exide Industries (₹227.2): The stock has been on a long-term uptrend since taking support at ₹116 in January 2016. In December 2016, it resumed its primary uptrend after finding support at around ₹170. Since then, the stock has been on a medium-term uptrend. Short-term trend is also up. But after registering a new high at ₹234 on April 12, the stock began declining. It fell 2.3 per cent in that session, forming a dark cloud cover candlestick pattern. This pattern indicates a short-term bearish trend. Moreover, the daily indicators such as relative strength index and moving average convergence divergence display negative divergence backing the stock's trend reversal.

The weekly relative strength index is featuring in the overbought territory implying that a corrective decline is on the cards. So, you can consider booking partial profits at this juncture.

A fall below the immediate support level of ₹218 can mar the short-term uptrend and drag the stock down to ₹205. Further decline below ₹205 can pull the stock down to ₹195 and then to ₹180 levels in the medium term.

Having said that, resumption of the uptrend from the key long-term support level of ₹205 can take the stock higher to ₹234 . Conclusive rally beyond ₹234 can see the stock trending higher to ₹250in the medium term. Investors with a long-term perspective can hold the stock with a stop-loss at ₹170.

Can Housing Development and Infrastructure Ltd (HDIL) and Indiabulls Real Estate be accumulated at the present levels?

Tarak Nath Sina

HDIL (₹85.7): Since finding support at ₹52 in late December 2016, the stock has been on a medium-term uptrend. After testing a key resistance at ₹70 in February, the stock decisively breached this level in early March and extended its up-move. Short-term trend has been up since early March.

The stock has retraced 61.8 fibonacci retracement level of its prior downtrend and now tests a key long-term resistance in the band between ₹87 and ₹90.

The daily indicators display negative divergence implying short-term trend reversal is on the cards. A downward reversal from the current resistance band can pull the stock down to ₹80 and ₹75 in the short term.

As long as the stock trades above ₹70, the medium-term uptrend will be in place. You can consider accumulating the stock in corrective declines or on a strong break above ₹90 levels while maintaining a stop-loss at ₹68. An emphatic break above ₹90 can take the stock higher to ₹95 and then to ₹100 in the medium term.

Next key long-term resistances are placed at ₹110 and ₹122 levels. On the other hand, a conclusive fall below 70 will mitigate the uptrend and pull the stock down to ₹65 and then to ₹60 levels in the medium to long term.

Indiabulls Real Estate (₹105.8): Last week, the stock skyrocketed 19 per cent with good volume, breaching a key resistance level of ₹90. However, itencountered barrier at its next long-term resistance in the ₹105-110 range and currently tests it.

The daily and weekly indicators feature in the overbought levels, signifying a near-term correction. Inability to move past ₹110 can pull the stock down to ₹100 and then to ₹90 levels in the short term.

The stock can then move sideways in the ₹90-110 range for a while. This corrective decline can be used to accumulate the stock with a stop-loss at ₹87. Strong plunge below ₹90 can pull the stock down to ₹85, ₹80 and ₹75 levels. Decisive rally above ₹110 can push the stock higher to ₹120 and ₹130 in the medium term.

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