Here are some answers to readers’ queries on the performance of their stock holdings.
Please share your view on Tata Power and SAIL for short- to medium-term
Rajesh Reddy
Tata Power Company (₹79.9): The long-term trend in Tata Power continues to remain bearish. However, the stock found support in the band between ₹68 and ₹70 in August 2013 and has been on a medium-term sideways trend. It needs to decisively rally above ₹88 to move out of this sideways consolidation phase.
In such a scenario, an up-move to ₹100 and then to ₹107 levels is likely in the medium term. Nevertheless, to make the long-term trend positive, the stock has to emphatically close above ₹107, which is a key long-term resistance level. On the downside, a weekly close below the lower boundary at ₹68 will reinforce bearish momentum and drag the stock down to ₹57.
The short-term trend turned bearish after the stock encountered resistance around ₹88 early this April.
But the stock's immediate support as well as 200-day moving average at ₹78 are cushioning the stock’s fall. A break below this level can pull the stock lower to ₹74 and ₹68 in the short term. Key immediate resistances are at ₹82 and ₹88 levels.
Steel Authority of India (₹66.3): Since bottoming out from its August 2013 low at ₹37, the stock has been on a medium- to intermediate-term uptrend.
Nevertheless, this uptrend met with a significant long-term resistance in the zone between ₹75 and ₹78 in early January and again in April 2014, and the stock started to trend lower. A breach of this resistance zone will mean continuation of the stock’s uptrend to ₹90 and then to ₹100 in the medium term.
This uptrend will stay in place as long as the key support level at ₹55 holds. Failure to do so will pull the stock down to ₹50 or even to ₹44 over the same time period.
The short-term trend in the stock is down. This can continue in the near term and the stock can take support at ₹63 or ₹60. Inability to hold out at this support level can drag the stock down to its subsequent important base at ₹55. Immediate resistances are at ₹72 and ₹78.
What is the long-term technical outlook for SBI and PNB?
Panini Deshpande
State Bank of India (₹2045.8): SBI broke out of a double bottom, bullish reversal pattern in early April 2014. However, the stock is not out of woods yet. Its long-term downtrend will be in place as long as it trades below the ₹2,500 levels.
The stock needs to conclusively break this long-term resistance level to alter the downtrend. A strong rally above this level will push the stock higher to ₹2,850 and then to ₹3,100 in the long-term. On the downside, a decline below the significant long-term base between ₹1,850 and ₹1,900 can take the stock lower to ₹1,700 and then to ₹1,500 in the same time-frame.
The stock’s medium-term uptrend that commenced from its February 2014 low at ₹1,475 is losing bullish momentum and is now under threat.
Important resistance at ₹2,100 is restricting the stock from moving higher. The stock requires to breach this level for an up-move to ₹2,200 in the medium term. But a downward reversal can pull the stock down to ₹1,900 levels.
A fall below ₹1,700 will mar this uptrend and drag it down to ₹1,500.
Punjab National Bank (₹775.6): The stock's long-term downtrend came to a halt and reversed at the key long-term support of ₹400 in September 2013. Since then, the stock has been on an intermediate-term uptrend. Following a sharp rally, the stock encountered resistance at ₹800 recently.
Break-through of this level can push the stock northwards to ₹900, which is a long-term trend deciding level. For a bullish uptrend, the stock must emphatically breach the ₹900 level. Long-term targets are ₹1,000 and then ₹1,150. A weekly close below ₹650 will strengthen the bearish downtrend and pull the stock down to ₹550 or ₹500 in the long term. The inability to rally above ₹800 can drag the stock down to ₹750 and further to ₹700 in the short term.
Send your queries to techtrail@thehindu.co.in
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