Technical Analysis

Your Stock Portfolio: Vedanta tests a key barrier

Yoganand D | Updated on March 09, 2018 Published on July 23, 2017




A corrective decline is possible and the stock can find support at ₹245 or ₹220 levels

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

What are the medium to long term price prospects for Vedanta.

Arun Paturkar

Vedanta (₹268.2): After marking a multi-year low at ₹58.1 in early February 2016, the stock of Vedanta changed direction. Since then, it has been on a long-term uptrend. While trending up, the stock had emphatically breached key resistances at ₹180 and ₹220 levels.

The second key resistance at ₹220 turned into a significant support for the stock and cushioned it during May this year. The stock resumed its long-term uptrend after taking support at ₹220. It has been on a medium-term uptrend since then. It trades well above its 21 and 50-day moving averages.

Nevertheless, the key resistance in the band between ₹270 and ₹280 had capped the stock’s upside during February and April this year. Last week, it advanced 2.2 per cent with low volume. Currently, the stock tests the resistance band mentioned above and may face some difficulty in surpassing the resistance zone.

A corrective decline is possible and the stock can find support either at ₹245 or ₹220 levels in the short term. In that scenario, the stock can consolidate in the wide range between ₹220 and ₹280.

Investors with a long-term perspective can consider holding and accumulating the stock in corrective declines with a stop-loss at ₹200. The long-term uptrend will be under threat only if the stock declines below the key support level of ₹180.

A conclusive break above the key resistance band between ₹270 and ₹280 can take the stock northwards to ₹300 and ₹320 levels in the medium to long term. Further rally beyond ₹320 can take it higher to ₹340-₹350 range.

Please suggest if I should buy Tinplate Company.

Rahul Nigotiya

Tinplate Company of India (₹146.7): The stock of Tinplate Company of India was not in the spotlight until it emphatically breached a key resistance at ₹95, by gaining 33 per cent in first week of July. After some profit-taking, the stock has again shot up ₹25, accompanied by extraordinary volume in the previous week. Near-term trend is up and the stock recorded a new high at ₹149.9 on Friday. That said, the indicators in the daily chart are showing signs of divergence, indicating that short-term trend reversal is on the cards.

A downward reversal can pull the stock down to ₹120 and then to ₹100 or ₹95 levels in the short to medium term. You can wait for the stock to decline to the support levels before buying it with a stop-loss at ₹90. Strong rally beyond ₹150 can take the stock northwards to ₹180 in the long term.

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Published on July 23, 2017
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