Technical Analysis

Hathway Cable breaches a key hurdle

Yoganand D | Updated on January 16, 2018 Published on October 16, 2016

If the stock sustains above ₹31, it can then move up to ₹35 and ₹37



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

I bought shares of Hathway Cable at ₹33.38 and J Kumar Infra at ₹211. Please give your views.

Nikhil Raj

Hathway Cable & Datacom (₹31.8): After recording a new high at ₹77 in November 2014, the stock reversed direction and began to decline. Since then, it has been on a long-term downtrend, forming lower peaks and troughs.

However, it found support at a 52-week low of ₹24 recorded on September 30 and bounced back.

The stock skyrocketed 17.4 per cent in the first week of October, triggered by positive divergence in the daily indicators and buying interest at lower levels. It hovers well above its 21- and 50-day moving averages.

You can consider averaging the stock with a the stop-loss at ₹25. Investors with a long-term perspective and high-risk appetite can also consider taking fresh long positions with a stop-loss at ₹25.

The stock has closed just above a key resistance at around ₹31. If it sustains above this level, it can then move up to ₹35 and ₹37.

A conclusive break-out of the long-term resistance level of ₹37 can take the stock higher to the next long-term hurdle at ₹45.

To alter the intermediate-term downtrend, it needs to breach the significant trend-deciding level of ₹50.

The subsequent long-term targets for the stock will be ₹55 and ₹60. Inability to move beyond ₹37 will keep the stock consolidating sideways in the wide band between ₹24 and ₹37 for a while. But a strong fall below ₹24 can will reinforce the downtrend.

J Kumar Infraprojects (₹209): Since recording a new high at ₹449 in October 2015, the stock of J Kumar Infraprojects has been on an intermediate-term downtrend.

Following a sharp fall this August, the stock found support around ₹105 and changed direction.

It has been on a medium-term uptrend since then.

It skyrocketed 21 per cent during the first week of October and trades well above its 21- and 50-day moving averages. The stock may now face a key resistance in the band between ₹240 and ₹250.

Strong breakthrough of this resistance will take the stock northwards to ₹300 in the medium term.

However, failure to move beyond ₹250 will keep the stock consolidating sideways in the band between ₹150 and ₹250. You can consider averaging the stock on declines with a stop-loss at ₹140.

A decisive break-out of the vital resistance at ₹300 will alter the intermediate-term downtrend and strengthen the bullish momentum.

The stock can then climb to ₹340 and ₹400 in the long term. On the downside, a decisive fall below ₹150 will moderate the ongoing uptrend and pull the stock down to the ₹100-105 support zone.

I have shares of SAIL at ₹68. Should I hold or sell them?

Sriram

SAIL (₹47.9): The stock recorded a multi-year low at ₹33.5 in February 2016. Since then, it has been trending up. In July, the stock breached its 200-day moving average and encountered a key resistance at ₹50. It has been testing this resistance and is facing difficulty surpassing it.

An emphatic breakthrough of ₹50 will reinforce the bullish momentum and take the stock upwards to ₹56 and then to ₹65 in the medium term.

You can consider accumulating the stock on a decisive break above ₹50 with a stop-loss at ₹45.

A strong rally beyond ₹75 is required to alter the stock’s long-term downtrend that has been in place from the June 2014 peak at ₹112. Subsequent targets are ₹78, ₹83 and ₹90.

On the other hand, a conclusive fall below the key support at ₹45 will drag the stock down to ₹42 and then to ₹40. But a plunge below ₹40 will alter the ongoing uptrend and pull the stock down to ₹36 and ₹33 in the medium term.

Send your queries to techtrail@thehindu.co.in

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