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Here are answers to readers’ queries on the performance of their stock holdings.
I hold shares of Chennai Petroleum Corporation from ₹330 levels. What is your opinion on the stock?
Prashant Shah
Chennai Petroleum Corporation (₹214.2): The stock encountered a key resistance in the ₹465-475 band in November 2017 and January 2018 and changed direction. Since then, it has been in an intermediate-term downtrend. Medium-term trend is also down for the stock. But it found support in the long-term support band between ₹180 and ₹200 last week and bounced up, gaining almost 5 per cent.
There has been an increase in daily volume over the past four weeks. Also, the daily indicators have been recovering from the oversold territory. You can consider averaging the stock in dips while maintaining a fixed stop-loss at ₹175. A strong break above the immediate resistance level of ₹230 will strengthen the up-move and take the stock up to ₹250 and ₹270 levels.
A further rally above ₹270 will pave way for an up-move to ₹300 over the medium to long term horizon. On the other hand, only a strong plunge below the key long-term support band between ₹180 and ₹200 will reinforce the downtrend and drag the stock down to ₹165 and ₹150 levels.
I bought shares of Advance Enzyme at ₹262 and UFO Moviez at ₹378. Should I average them out?
Rajeev
Advanced Enzyme Technologies (₹156): Since encountering a key resistance at ₹445 in April 2017, the stock has been in a long-term downtrend. Moreover, the medium as well as short-term trend are also down for the stock. But after recording a 52-week low at ₹150 in late January this year, the stock began to move sideways in a narrow range in the ₹150-170 band.
A decisive break above the upper boundary can start attracting buying interest and the stock can trend upwards to ₹185 and ₹200 over the medium term. A further rally above ₹200 will alter the medium-term downtrend and take the stock up to ₹225 and ₹250 levels. To alter the long-term downtrend, the stock needs to emphatically move beyond the trend-deciding level of ₹320. Such an up-move can take the stock up to ₹360 in the long run. On the downside, if the stock decisively falls below ₹150, it can find supports at ₹140 or ₹130 levels. Consider averaging in the stock on a strong rally above ₹170 with a stop-loss at ₹150 levels.
UFO Moviez India (₹231.3): This stock is also in a long-term downtrend; medium as well as short-term trends are also down. Recently, it registered a new low at ₹211 and bounced up. On Friday, the stock gained 4 per cent. But it faces a key barrier at ₹250.
A conclusive rally above this level can bring back bullish momentum and take the stock northwards to ₹275 and ₹320.
Key long-term resistances are pegged at ₹350 and ₹400. Consider averaging in the stock above ₹250 with a stop-loss at ₹225 levels.
Exit the stock if it struggles to move beyond ₹350 levels.
Send your queries to techtrail@thehindu.co.in
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