Technical Analysis

Avenue Supermarts in a downtrend

Yoganand D | Updated on May 06, 2019 Published on May 06, 2019

A break above the resistance at ₹1,500 can take the stock up to ₹1,600 and ₹1,680

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

I am a long-term investor. What are the prospects for Avenue Supermarts and Grasim

VM Ramkumaar.

Avenue Supermarts (₹1,260.1): The stock of Avenue Supermarts encountered key resistance at ₹1,680 in August 2018, following an intermediate-term uptrend. The resistance capped the upside last December and the stock changed direction. Since then, it has been in a medium-term downtrend. While trending down, the stock had conclusively breached a key support at ₹1,500 in January.

Subsequently, this level turned into a crucial resistance and limited the upside between February and April. The stock breached another key support at ₹1,350 and extended the downtrend. Currently, the stock hovers above a key base level in the band between ₹1,225 and ₹1,250. An upward reversal from this support could be short-lived.

An emphatic rally above the immediate resistance level of ₹1,350 is needed to take the stock up to ₹1,400 and ₹1,500. To alter the medium-term downtrend, it needs to conclusively break above the vital resistance at ₹1,500. Such a break can take the stock up to ₹1,600 and ₹1,680 in the medium to long term.

On the other hand, a decisive fall below the key base level of ₹1,225 can drag the stock down to ₹1,150 and ₹1,100. A further decline below ₹1,100 will mitigate the intermediate-term uptrend and pull the stock down to ₹1,000 and ₹900 levels. Investors with a long-term perspective can stay invested with a stop-loss at ₹850.


Grasim Industries (₹899): After taking support at ₹700 this February, the stock of Grasim Industries began to trend up. Since then, the stock has been in a medium-term uptrend. But it now tests a key resistance at ₹930. A strong break above this barrier is needed to strengthen the uptrend and take the stock up to ₹1,000 and ₹1,060. To alter the intermediate-term downtrend that began from the November 2017 high of ₹1,299, the stock has to conclusively break above ₹1,060. In that case, it can prolong the uptrend to ₹1,140 and ₹1,200 levels. Key supports are at ₹850 and ₹750. A fall below ₹750 can find support at ₹700.


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