Can Fin Homes is in a downtrend

To alter the downtrend, the stock needs to break above the vital resistance level of ₹500

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

I hold shares of Can Fin Homes at an average price of ₹462.5. What are the prospects?

Shreyansh

Can Fin Homes (₹339.4): The stock of Can Fin Homes encountered a key resistance at ₹665 in July 2017, following a long-term uptrend. However, it subsequently changed direction and has been in an intermediate-term downtrend. While trending down, the stock decisively breached a key support at ₹450 in early April this year.

Medium as well as short-term trends are also down. The stock trades well below its 21- and 50-day moving averages. Nevertheless, it now tests key support in the ₹335-350 band. A significant long-term support also exists in the ₹280-300 range, which can provide cushion in the coming weeks.

Investors with a long-term horizon can hold the stock with a stop-loss at ₹275. You can consider averaging the stock at lower levels with a stop-loss at ₹275. An upward reversal from the long-term support can take the stock up to ₹400.

A conclusive rally beyond this level is needed to alter the short-term downtrend and take the stock higher to ₹450 and ₹500 levels over the medium term. That said, to alter the intermediate-term downtrend, the stock needs to break above the vital resistance level of ₹500. Ensuing targets are ₹530 and ₹580 levels.

What are the prospects for Kesoram Industries bought at ₹165 and NMDC bought at ₹150.

Gopal Setty, Giridhar

Kesoram Industries (₹82.2): The stock of Kesoram Industries breached a key long-term support at ₹120 in April and continued its medium-term downtrend, that has been in place since this January’s peak of ₹173. A significant support is in the ₹70-75 range.

The stock could test this base zone in the short term. A downward break below this base will strengthen the downtrend and pull the stock down to ₹60 and ₹50 in the medium term.

A decisive plunge below ₹50 will drag the stock to multi-year lows. Subsequent targets are at ₹40 and ₹30. Traders and investors can consider exiting the stock in rallies. Key resistances are at ₹95, ₹107 and ₹120.

NMDC (₹108): The stock has been consolidating sideways in a broad trading range between ₹75 and ₹160 since early 2016. After encountering resistance at ₹160 this January, it reversed direction and began to decline. Since then, it has been on a medium-term downtrend.

The short-term trend is also down for the stock. However, it tests a key long-term support in the ₹100-105 band that had provided cushion in June 2017. An upward reversal from the current support level can face resistance at ₹117 in the short term.

A conclusive move beyond this barrier can take the stock up to ₹125 and ₹135 in the medium term. As long as the stock trades below ₹135, the downtrend, which commenced from ₹160, will be intact.

A strong break above ₹135 will alter the trend and push the stock higher to ₹145 and ₹160 levels in the long run.

On the other hand, a plunge below the immediate support band can drag the stock to ₹90 and ₹75 in the medium term.

An emphatic break-out of the sideways consolidation phase between ₹75 and ₹160 will set the long-term direction for the stock.

You can consider averaging the stock at lower levels with a stop-loss at ₹85.

Send your queries to techtrail@thehindu.co.in

c:set var="prUrl" value="https://premium.thehindubusinessline.com" />

Read further by subscribing to

The Hindu Businessline

What You'll Get

  • Web + Mobile

    Access exclusive content of the Hindu Businessline across desktops, tablet and mobile device.


  • Exclusive portfolio stories and investment advice

    Gain exclusive market insights from the Hindu Businessline's research desk.


  • Ad free experience

    Experience cleaner site with zero ads and faster load times.


  • Personalised dashboard

    Customize your preference and get a personalized recommendation of stories based on your intrest.

Related

This article is closed for comments.
Please Email the Editor