Technical Analysis

Exide Industries is all charged

Yoganand D | Updated on January 20, 2018 Published on May 29, 2016

The stock’s bullish run can take it to ₹160 and strengthen its uptrend further

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

I have shares of DB Corp and Exide Industries bought at average price of ₹330 and ₹137 respectively. What are the prospects for these two stocks?


DB Corp (₹348): The stock of DB Corp has been on a long-term uptrend since marking a new low of ₹170 in January 2012. After recording a high at ₹422.9 in January 2015, the stock changed direction and has been on a medium-term downtrend.

It found support around ₹300 last August. This downtrend retraced the 50 per cent fibonacci retracement level of the stock's prior uptrend that occurred around ₹300. Since last August, the stock has been on a medium-term sideways consolidation phase in the wide band between ₹300 and ₹340 until last week.

Gaining momentum, the stock jumped 7.3 per cent accompanied by extraordinary volumes last week, decisively breaking the sideways range. However, the stock also tests a key resistance at ₹355. An emphatic breakthrough of this level can pave way for an up-move to ₹370 and then to ₹385 in the medium term.

Further rally beyond these levels can take the stock higher to ₹400 and ₹420 in the long term. Investors with a long-term perspective can hold the stock with a stop-loss at ₹295 levels. Investors with a medium-term perspective can stay invested while maintaining a stop-loss at ₹320 levels.

However, a strong slump below the immediate support at ₹340 can pull the stock down to ₹320 and then to ₹300 in the medium term. The long-term uptrend will get negated if the stock conclusively falls below ₹300. Subsequent supports are pegged at ₹270 and ₹250.

Exide Industries (₹157.1): The long-term uptrend that commenced in early 2009 low of ₹35 has been in place. Significant long-term support is at ₹100. As long as the stock trades above this base level, the long-term uptrend will remain in place.

Following an intermediate-term downtrend from the February 2015 peak of ₹206, the stock took support at ₹116 in January 2016. Subsequently, it resumed its up-move and has been on a medium-term uptrend since then. This uptrend got charged in April as the stock decisively breached a key resistance at the level of ₹140.

Last week, the stock rose 3 per cent strengthening the bullish trend. However, it now faces a key resistance ahead at ₹160.

With the underlying bullish momentum, the stock can breach the key resistance at ₹160 and extend its uptrend.

Such a break can take the stock higher to ₹175 and ₹190 levels in the medium term. Next key long-term resistance is in the band between ₹200 and ₹205. You can hold the stock and accumulate on declines with a stop-loss at ₹135. Immediate supports are at ₹150 and ₹140. Current uptrend will be marred if the stock slumps below ₹135. It can then decline to ₹125 or even ₹115.

I have shares of Suzlon. What are the long-term prospects for this stock. Can I accumulate it?

Arun A

Suzlon Energy (₹16.2): The stock of Suzlon Energy is in a bear grip and not out of the woods yet. This January, it found support ataround ₹13 and started to trend upwards. It surged 7 per cent last week breaching a key resistance at ₹15.

However, the stock could face difficulty in surpassing next resistances at ₹18.5 and ₹20 in the short term.

Strong rally above ₹20 can take the stock higher to ₹25 and then to ₹30 in the long term. Envisaging a move beyond ₹30 is tough at this juncture. But, resumption of the downtrend can pull the stock down to ₹13 and then to ₹10 in the coming month. Exit the stock in rallies.

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