Your Stock Portfolio: Outlook bullish for Karnataka Bank

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

Please discuss the medium to long-term technical levels for Karnataka Bank and PNB

Rajesh Reddy

Karnataka Bank (₹163.3): The stock of Karnataka Bank jumped 11 per cent with extraordinary volume last week, breaking above a key resistance level of ₹155.

Moreover, the stock has decisively breached its moving average compression (21-, 50-, and 200-day moving averages) at around ₹150. With the recent rally, the stock appears to have resumed its long-tem uptrend that has been in place since taking support at around ₹70 in early 2016. The long-term uptrend will remain intact as long as the stock trades above the significant support level of ₹125. Investors with a long-term perspective can stay invested with a stop-loss at ₹120. Long-term targets are ₹200 and ₹215.

Medium and short-term trends are also up for the stock. It can continue to trend upwards and reach the medium term price target of ₹180 and ₹190. Investors with a medium-term view can buy the stock with a stop-loss at ₹150.

Key supports to watch are placed at ₹155 and ₹140. Strong fall below ₹140 can alter the medium-term uptrend and pull the stock down to ₹130 or ₹125 levels.

Punjab National Bank (₹135): Since encountering a key resistance in the band between ₹175 and ₹185 in early May 2017, the stock of Punjab National Bank has been in an intermediate-term downtrend.

Medium as well as short-term trends are also down for the stock. It trades well below its 50 and 200-day moving averages.

However, the stock now tests a key support at ₹130 that also coincides with 50 per cent Fibonacci retracement level of prior uptrend. Strong fall below this base level can pull the stock down to ₹122 and ₹115 levels.

Further fall below ₹115 can drag the stock down to ₹100 in the medium term.

On the other hand, the stock needs to conclusively rally beyond ₹160 levels to alter the intermediate-term downtrend and take it higher to ₹170 and ₹180 levels. Key immediate resistances are at ₹140 and ₹145.

An up-move beyond ₹145 can take the stock higher to ₹160 levels in the medium term. Investors with a medium-term perspective can buy the stock above ₹145 levels with a stop-loss at ₹135.

I have shares of Meghmani Organics. Can I accumulate the shares at current levels or book profits, from a long term perspective?

V Srinivasa Rao, Tuhin Ranjan

Meghmani Organics (₹94.1): The stock emphatically breached its key long-term resistance levels of ₹53 this August and accelerated its uptrend. It is a multi-bagger. Across all time-frames — long, medium and short-term — the stock is an uptrend. Nevertheless, the stock encountered a significant psychological resistance at ₹100 last week and began to decline.

The weekly indicators are showing negative divergence, implying that trend reversal is on the cards. Moreover, the indicators in the monthly chart feature in the overbought territory indicating the same.

Investors sitting on huge profit can consider booking partial profit at this juncture and stay invested with a stop-loss at ₹70. A strong fall below the immediate support level of ₹85 can pull the stock down to ₹80 and ₹75 levels in the short to medium term.

Strong plunge below ₹75 will alter the medium-term uptrend and pull the stock down to ₹70 or even to ₹55-60 band in the long term. Strong break above ₹100 can push the stock northwards to ₹110 and ₹120 levels in the medium term.

Send your queries to techtrail@thehindu.co.in

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