Technical Analysis

HDFC on a strong footing

Yoganand D | Updated on November 22, 2014 Published on October 26, 2014

Resumption of the uptrend can take the stock higher to ₹1,150

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

What is the outlook for HDFC?

Biswajit Das

HDFC (₹1,031.8): The stock of HDFC has been on a long-term uptrend from the early 2009 low of ₹223. The medium-term trend is also up. However, after registering an all-time high at ₹1,149 in August this year, the stock has been on a short-term downtrend. Investors with a long-term perspective can use the corrective fall to buy the stock with a stop-loss at ₹800.

A fall below the immediate support at ₹980 can drag the stock to the ₹860-870 band in the short term. Resuming its primary uptrend, the stock can move northwards to ₹1,075 and ₹1,150 or even ₹1,200 in the medium term.

I am a long-term investor. Please give the technical outlook for ING Vysya Bank.

Ashok Chakravarthi

ING Vysya Bank (₹648.2): The stock of ING Vysya Bank has been in a sideways consolidation phase in the wide range between ₹580 and ₹670 since early May 2014. After testing the lower end of the range, the stock is now trending higher towards the upper boundary.

Investors with a long-term perspective can consider holding the stock with a stop-loss at ₹530 while short-term investors can hold the stock with a stop-loss at ₹575. An emphatic break-out from the key resistance at ₹670 will pave the way for an upmove to ₹700 and then to ₹723 in the long term.

I have bought Amtek Auto at ₹189. What is the outlook?

Sitaram Shrotri

Amtek Auto (₹169.8): The stock of Amtek Auto had a great run and became a multi-bagger in a short span of time. It jumped from ₹62 to ₹265 between February and early June this year. After facing resistance at ₹265, the stock started to decline in mid-September and has been on a short-term downtrend since then.

It decisively broke a significant support at ₹200 and fell to its subsequent support at ₹150 last week. This support provided a temporary cushion to the stock’s fall.

But with the stock’s short-term downtrend gaining strength, a fall below ₹150 will reinforce the bearish momentum and drag the stock down to ₹110 and then to ₹90 in the medium term.

You can consider exiting the stock in rallies and re-entering later at lower levels. Key resistances are pegged at ₹200, ₹230 and ₹265 levels.

I am holding Omax Autos and Nelco. What is the medium- to long-term outlook for these stocks?


Omax Autos (₹48.7): After forming a strong base in the zone between ₹27 and ₹30, the stock started to trend northwards in February. The stock has been on an intermediate-term uptrend since then.

However, it is facing difficulty in breaking the key resistance at ₹55 which it tested in mid-September. A decisive rally above ₹55 can push the stock higher to its long-term resistance at ₹66. Subsequent resistances are at ₹80 and ₹90 levels.

But failure to surpass the resistance level at ₹66 will see the stock moving in a wide sideways range between ₹27 and ₹66. A fall below ₹27 will drag the stock down to ₹15 in the long term.

Nelco (₹84.1): The stock conclusively broke out of a significant long-term resistance at ₹60 in early September 2014. But, the stock’s rally came to a halt at the resistance zone between ₹95 and ₹100 in late September. Thereafter, the stock started to move sideways, taking support at ₹80.

A decisive fall below this support level will have bearish implications and drag the stock down to ₹70 and ₹60 in the short- to medium-term. Investors should tread with caution and exit the stock on such a fall.

The next key supports are placed at ₹54 and ₹45 levels. Conversely, a strong rally beyond ₹100 is needed to strengthen the uptrend and take the stock northwards to ₹120 and ₹125.

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