Technical Analysis

Your Stock Portfolio: Petronet LNG in a long-term uptrend

| Updated on January 09, 2018 Published on August 20, 2017


The uptrend will be intact as long as the stock trades above ₹160 levels

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

I bought the stock of Petronet LNG at ₹218. What should be my future course of action?

M N Rao

Petronet LNG (₹229.2): The stock of Petronet LNG is in an uptrend across all-time frames — long, medium and short term. It trades well above the 50- and 200-day moving averages. After recently taking support at ₹200, the stock continued its uptrend. Last week, it gained 8 per cent, reinforcing the uptrend and is trading at new highs.

The daily as well as weekly indicators and oscillators are charting higher, backing the stock’s uptrend. However, if the rally continues going forward, these indicators may touch overbought levels and there is a possibility of short-term trend reversal.

Near-term targets are ₹240 and ₹250 levels. Inability to move beyond ₹250 can bring a short-term trend reversal and pull the stock down to ₹220 and ₹210 levels. Investors with a short-term perspective can consider booking profits at higher levels with a stop-loss at ₹225. Medium-term investors can remain invested with a stop-loss at ₹195 levels.

The long-term uptrend will be intact as long as the stock trades above ₹160 levels. Investors with a long-term view can buy the stock in declines with a fixed stop-loss at ₹150. Targets are ₹250 and ₹275 levels.

Can I hold GNFC bought at ₹280 for the long term?

R Malaiarasan

GNFC (₹272.4): The uptrend in the stock of Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) that started in early 2016 at a low of ₹65 came to an halt after registering a new high of ₹322 in May 2017. With this, one leg of the stock’s uptrend may have come to an end.

Since May, the stock has been on a medium-term sideways consolidation phase in the band between ₹260 and ₹320, with a negative bias. Within this consolidation phase, the stock is in a short-term trend.

However, the stock currently tests a key support and 200-day moving average at ₹260 levels. Conclusive downward break of this support can alter the trend downwards and pull the stock lower to ₹240 and then to ₹200 levels in the medium term. In that case, you can consider exiting the stock and buying at lower levels.

The long-term uptrend will stay in place as long as the stock trends above significant support levels of ₹190. Investors with a long-term horizon can remain invested with a stop-loss at ₹180 levels. Strong rally above the immediate resistance level of ₹290 can take the stock higher to ₹310 and ₹320 levels.

Decisive break above ₹320 can push the stock northwards to ₹350 in the long run.

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Published on August 20, 2017
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