Technical Analysis

Bharti Infratel — a pillar of strength

Yoganand D | Updated on November 28, 2017 Published on December 14, 2014

The stock breached the key resistance last week by surging 10 per cent



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

I am holding Bharti Infratel since its IPO. What are the long-term prospects?

RT Rajasekaran

Bharti Infratel (₹340.3): The stock of Bharti Infratel has been on a long-term uptrend since bottoming out from the August 2013 low of ₹126.

After struggling to breach the long-term resistance at ₹210 during March and April this year, the stock finally broke through it in May.

The stock continued to mark new highs. Last week, it jumped 10 per cent breaking its key immediate resistance at ₹310 levels.

The short-term trend remains bullish as long as the stock trades above ₹310. It can rally to its new high of ₹371 once again in the medium term.

Investors with a long-term perspective can hold the stock with a stop-loss at ₹240 levels.

A fall below this level will mar the uptrend and pull the stock down to ₹210 or ₹190 levels in the long term.

Significant supports below ₹310 are placed at ₹280 and ₹260 levels.

What is the medium to long-term outlook for SRF and Ador Welding?

Anil

SRF (₹867): The stock of SRF broke through a significant long-term resistance at ₹350 this March and continued its upward journey. Long as well as medium-term trends are up for the stock.

However, it has been on a short-term sideways movement, after registering a new high at ₹957 in late November. The price action in the weekly chart signals a trend reversal.

A conclusive fall below the immediate support level of ₹800 will have short-term bearish implications and pull the stock down to ₹720 and then to ₹650 levels.

But a further tumble below ₹650 will mitigate the stock’s medium-term uptrend and pull it down to ₹585 or ₹500 levels in the coming months.

On the upside, upward break of the resistance at ₹920 can push SRF higher to ₹950 and then to ₹1,000 in the medium to long-term.

Ador Welding (₹205.1): The stock's intermediate-term uptrend that began from its August 2013 low of ₹85, came to a halt after encountering a key resistance at ₹250 levels in July 2014.

Since then, the stock has been on a medium-term sideways consolidation phase, in the band between ₹200 and ₹250.

After failing to surpass the upper boundary in November, the stock is in a short-term downtrend. It is now approaching the key support at ₹200.

An emphatic decline below this level will strengthen the downtrend; it can witness a sharp decline to ₹150 in the medium term.

Investors should exit the stock on such a fall. Inability to hold above the significant long-term support at ₹150 will pave way for further decline to ₹110 in the long term.

Conversely, the stock needs to break through the upper boundary for an up move to ₹300 levels in the long-term.

Investors can buy above ₹250 levels with a stop-loss at ₹230.

Is Vinyl Chemicals worth buying at current levels?

Revathi Venkatraman

Vinyl Chemicals (India) (₹67.2): The stock’s strong rally, which started from the September 2013 low of ₹9, has come to an end after marking a new high at ₹77 on December 7.

With the indicators on the daily and weekly chart displaying negative divergence, the stock can reverse direction in the ensuing weeks.

Formation of a bearish engulfing candlestick pattern also suggests the same. Therefore, buying the stock at its peak is not advisable; wait for it to complete the corrective fall to ₹40 or even ₹30 levels.

A resumption of the uptrend can take the stock higher to ₹77 once again.

Investors sitting on profit at this juncture can consider taking it off the table.

Send your queries to techtrail@thehindu.co.in

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