Colourful outlook for Asian Paints

Medium-term trend is up for the stock. Investors can hold it with a stop-loss at ₹375

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

What is your view on Asian Paints?

Biswajit Das

Asian Paints (₹656.1): The stock of Asian Paints has been on a long-term uptrend since recording a low of ₹68 in early 2009.

This uptrend will stay in place as long as the stock trades above ₹375 levels. Investors with a long-term horizon can consider holding the stock with a stop-loss at ₹375 levels.

Medium-term trend is also up for the stock. However, the short-term trend is sideways in the band between ₹600 and ₹680.

A strong fall below the lower boundary at ₹600 will drag the stock down to ₹550 in the short- to medium-term time frame.

The next key long-term supports are at ₹500 and ₹455 levels.

An upward breakthrough of ₹680 will extend the stock's long-term uptrend and take it higher to ₹700 and then to ₹750 in the medium term.

Please advise on the outlook of KNR Constructions and OnMobile Global for the short- and medium-term.

Prabhakar Rao

KNR Constructions (₹292.1): In May 2014, the stock emphatically broke out of a significant long-term resistance at ₹120 and extended its rally to mark an all-time high of ₹322 in September.

However, the stock has been on a sideways movement in the range between ₹250 and ₹320 since then.

The indicators in the weekly chart are weakening and signalling a trend reversal.

Traders with a short- to medium-term perspective should therefore tread with caution at this juncture.

A fall below ₹250 will have bearish implications, and pull the stock down to ₹220 or ₹200 levels in the medium term.

A decisive fall below ₹180 will mar the long-term uptrend and pull the stock down to support levels of ₹140, ₹120 and ₹100.

To reinforce bullish momentum, the stock needs to break the upper boundary of its sideways movement at ₹320, which could take it higher to ₹360.

OnMobile Global (₹39): On Friday, the stock skyrocketed 19 per cent, taking its weekly gains to 24.6 per cent.

Following this up-move, the stock now tests the upper boundary of the broad sideways range between ₹26 and ₹39. It hovers well above its 50- and 200-day moving averages.

A conclusive breakout of the key resistance is likely in the coming trading sessions.

This will strengthen the stock’s up move and take it higher to ₹45, ₹50 and then to ₹55 in the short- to medium-term.

Traders can consider buying the stock with a stop-loss at ₹35. A breach of the significant resistance at ₹55 is required for a long-term up-move to ₹68 and then to ₹80. Important supports to note are at ₹35, ₹30 and ₹26 respectively.

Please give the six-month technical outlook on Clutch Auto.

Milind Suryarao

Clutch Auto (₹23.3): After every sharp rally, the stock has witnessed selling pressure and corrected. Recently, the stock rallied sharply to ₹32.7in early September, and a subsequent corrective fall is in progress.

The stock now tests support at ₹23. An upward reversal from this support level can take the stock higher to ₹26, ₹29 and then to ₹32 in the short- to medium-term.

The long-term resistance at ₹32 needs to be breached for an up-move to the levels of ₹36 and ₹40. Key resistance beyond ₹40 is at ₹45.

Having said that, a fall below the immediate support level will drag the stock down to the next key base level of ₹18 in the medium term.

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