Technical Analysis

Bosch is on a downtrend

Yoganand D | Updated on March 24, 2019 Published on March 24, 2019

A fall below ₹17,200 can reinforce the downtrend and drag the stock to ₹16,000

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

I bought shares of Bosch at ₹19,400. What are the prospects?

TVS Prakash Rao

Bosch (₹18,267.5): Following a strong rally in 2014, the stock of Bosch registered an all-time high at ₹27,989 in March 2015. Since then, it has been trending down. Intermediate, medium and short-term trends are down for the stock.

It had encountered a key resistance at around ₹22,000 in September 2018 and has been in a medium-term downtrend since then.

The stock has a significant medium-term support in the ₹17,200-17,600 band, which has been limiting the downside since March 2018. The current downtrend can find support in this band in the short to medium term. An upward reversal from the key support band will keep the stock consolidating sideways in a wide range between ₹17,200 and ₹20,500 for a while.

But a decisive plunge below ₹17,200 will reinforce the downtrend and drag the stock down to ₹16,500 and ₹16,000 in the medium term. You can consider averaging the stock in dips with a stop-loss at ₹17,000.

On the upside, key immediate resistances are at ₹19,000 and ₹20,000. An emphatic break above the next vital resistance at ₹20,500 is required to take the stock out of the sideways range. Subsequent resistances are placed at ₹22,000 and ₹22,500.

What are the prospects of JSW Energy shares purchased at ₹71?

Sudhakar Reddy

JSW Energy (₹65.4): Since November 2018, the stock has been in a medium-term sideways consolidation phase in a wide range between ₹64 and ₹73. Testing the upper boundary in early March this year, the stock began to decline. On Friday, it fell 2.8 per cent, decisively breaching its 200-day moving average. The stock trades well below the 50-day moving average as well.

Short-term outlook is bearish. It can test the key support at ₹64 in the near term. A strong tumble below ₹64 will drag the stock down to ₹60. A break below ₹60 can test the next supports at ₹55 and ₹50. A decisive fall below ₹50 will strengthen the long-term downtrend that has been in place since the January 2018 high of ₹97. In the long run, if the stock falls to ₹45 or ₹40, investors should avoid taking fresh long positions. But a decisive break above ₹73 will take the stock up to ₹77 and ₹80 over the medium term. A strong break above ₹80 will alter the downtrend and take the stock up to the next resistance at ₹85.

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