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Here are answers to readers’ queries on the performance of their stock holdings.
I want to buy Hindustan Zinc stock. Please suggest levels for short, medium to long-term perspective.
Sabera Begum
Hindustan Zinc (₹237.7): Since taking support at around ₹102 in August 2015, the stock of Hindustan Zinc has been on a long-term uptrend. In April 2016, the stock emphatically breached a key long-term resistance at ₹160 and continued to trend upwards.
However, the stock encountered a key resistance in the band between ₹320 and ₹330 in February 2017. It again tested this resistance level in late March and reversed direction, triggered by negative divergence in weekly as well as monthly indicators.
The stock plunged 11 per cent with a downward gap on March 29, breaching its 21- and 50-day moving averages and a key support at ₹300. Since then, it has been on a medium-term downtrend. While trending down, the stock breached a vital support as well as 200-day moving average at around ₹260 in early May this year.
The short-term trend is down for the stock. But the stock found support at ₹230 recently and tests it. This support could be a temporary base. A strong fall below this level can pull the stock down to ₹210 or even to ₹200 levels in the medium term. An upward reversal from the support zone between ₹200 and ₹210 is possible.
You can consider buying in declines while maintaining a long-term support at ₹190. Targets on an upward reversal are ₹260 and ₹280 levels. A decisive rally beyond ₹280 is needed to alter the downtrend and strengthen the upward momentum to push the stock higher to ₹300 and ₹320 levels once again. That said, an emphatic downward break of ₹200 level will alter the stock’s long-term uptrend and drag the stock down to ₹180 and then to ₹160 in the long run.
Please comment on the prospects of Snowman Logistics and Tilaknagar Industries.
Anish Jose
Snowman Logistics (₹57.4): The stock has been on a long-term downtrend since recording a new high of ₹134.7 in November 2014. The key resistance level at ₹92 capped the stock’s rally in July 2016. Subsequently, the stock resumed its primary downtrend and has been on an intermediate-term downtrend since then. Nevertheless, it found support at its significant long-term base band between ₹46 and ₹50 in the month of November and December 2016.
With lack of bullish momentum now, the stock could test this base band in the medium term. Investors with a long-term perspective can hold the stock with a stop-loss at ₹48.
A strong break above the key resistance level of ₹65 will alter the stock’s short-term downtrend and take it northwards to ₹70 and then to ₹75 in the medium term. A conclusive rally beyond ₹75 will alter the intermediate-term downtrend and push the stock higher to ₹85 and ₹90 levels.
Tilaknagar Industries (₹10.88): The stock is in a downtrend across timeframes — long, medium and short term. In March, the stock breached key support level of ₹14 and continued to decline.
Last week, the stock recorded a new 52-week low, which is also a multi-year low at ₹10.33 on May 31. There are no signs of trend reversal. Desist from investing in this stock.
Immediate supports are at ₹10 and ₹7.75. Key immediate resistances are placed at ₹12 and ₹14. A conclusive rally above ₹15 is required to change the stock's short-term downtrend.
Send your queries to techtrail@thehindu.co.in
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