Wipro on a strong uptrend

As long as the support at ₹320 holds, the stock’s long-term uptrend will persist



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

Please give your medium- and long-term outlook for KPIT Technologies and Wipro.

Eldho Mathew



KPIT Technologies (₹164.7): The stock has been on a long-term uptrend ever since it bottomed out from the low of ₹10 in early 2009.

But the stock encountered significant resistance around ₹185 in January 2014 and has been moving sideways in the wide band between ₹150 and ₹185.

Investors with a long-term horizon can hold on with a stop-loss at ₹125 levels.

An upward reversal from the key support at ₹150 can take the stock initially to ₹185 and then to ₹200 in the long-term. Investors with medium- and short-term perspective can hold the stock with a stop-loss at ₹145 levels. Targets are ₹175 and ₹185.

However, a decisive fall below the lower boundary of the sideways movement at ₹150 will take the stock lower to the next support level at ₹140.

Wipro (₹552.7): The long-term trend is up for Wipro. Its significant long-term support at ₹320 provided a base for the stock in August 2011 and then in May 2014.

As long as this support holds, the stock’s long-term uptrend will be intact. Only a decisive fall below ₹320 will alter the trend and pull the stock down to ₹300 or even to ₹265 levels.

Investors with a long-term perspective can hold the stock with a stop-loss at ₹315 levels. However, one leg of the primary uptrend appears to have come to an end as the stock encountered resistance at ₹600 this February and again in October. It is now in a corrective short-term downtrend.

A fall below the immediate support at ₹535 can pull the stock down to ₹500 and then to ₹475. Resumption of the uptrend can find resistance once again at ₹600. An emphatic break-out of ₹600 is needed to reinforce bullish momentum and take the stock northwards to ₹650 levels.

What are the prospects for IFCI and L&T Finance Holdings, both in the short- and long-term?

RT Rajasekaran



IFCI (₹38.6): The stock of IFCI has been on a long-term uptrend since taking support in the band between ₹19 and ₹20 in August 2013. It has doubled since then.

In March 2014, the stock decisively breached its moving average compression (21-, 50- and 200-day moving averages); in early May, it breached a long-term resistance at ₹27.

As long as the stock trades above the support zone between ₹30 and ₹31, its long-term outlook stays bullish. Targets are ₹45 and ₹50.

Investors with a long-term perspective can hold the stock with a stop-loss at ₹28. An emphatic decline below ₹30 can pull it down to ₹25 in the medium term. The short-term trend is up. It is now testing resistance at ₹40.

A decisive breakthrough of this level is needed to strengthen the ongoing uptrend and take the stock higher to ₹45 in the shortterm. Key supports to watch are at ₹35, ₹32.5 and ₹30.

L&T Finance Holdings (₹70.4): Following a sharp rally in September and October 2013, the stock encountered a key resistance at ₹83. Since then, it has been on a sideways consolidation phase in a broad range between ₹63 and ₹83 levels. Only a decisive break out of this sideways range will signal a clear long-term trend.

A strong upward break of the upper boundary of ₹83 will push the stock higher to ₹95 or ₹100 in the long-term.

Nevertheless, a decisive fall below ₹63 will have bearish implications and drag the stock down to ₹55 and then to ₹46 in the long term. The short-term trend is turning positive. A conclusive breach of the immediate resistance at ₹72 can take the stock higher to ₹76 and then to ₹80. Supports are at ₹67 and ₹63 levels.

I have bought shares of DQ Entertainment at ₹28 per share. What are the prospects for the company?

Ajit D Nair



DQ Entertainment International (₹24.7): The long-term trend continues to be down for the stock. As long as it trades below ₹72, this downtrend will remain in place.

A strong rally beyond ₹72 can take the stock higher to ₹90 and then to ₹103 in the long term. The stock reversed higher taking support around ₹18 in September. It has been on a short-term uptrend since then. However, the key resistance at ₹28 has kept the stock’s uptrend on hold.

A decisive breakthrough of ₹28 will push the stock higher to ₹35 and ₹40 in the mediumterm. You can stay invested with a stop-loss at ₹20 and exit the stock at key resistance levels. On the downside, an emphatic fall below ₹20 will weaken the short-term uptrend and pull the stock down to ₹17. Further decline below ₹17 can strengthen the downtrend, pulling it down to ₹10 or even to ₹6.

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