Technical Analysis

HDFC Life in a medium-term uptrend

Yoganand D | Updated on July 14, 2019 Published on July 14, 2019

As long as the stock trades above ₹410, the uptrend will remain intact

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

I bought the stock of HDFC Life at ₹380. I want to know if the recent rise should be a reason for me to sell now and re-enter at a lower level?

Sudhin Bathija

HDFC Life Insurance Company (₹482): Since taking support at ₹346, the stock has been in a medium-term uptrend.

 

While trending up, the stock had emphatically breached a key resistance at ₹410 in late May this year and accelerated.

The short-term trend is also up for the stock. It trades well above the 50 and 200-day moving averages. Last week, the stock resumed its uptrend after a near-term corrective decline.

On Friday, it gained 3 per cent accompanied by above-average volume.

However, the stock faces a key resistance ahead at ₹500. A strong break-out of the barrier will strengthen the medium-term uptrend and take the stock higher to ₹525 and ₹547 levels over the coming months.

A further rally above ₹547 can take the stock to new highs. You can consider booking partial profits if the stock fails to move beyond ₹547 levels.

As long as the stock trades above ₹410, the medium-term uptrend will remain intact.

Any corrective decline can find supports at ₹460 and ₹440 levels. However, an emphatic fall below ₹440 will be a threat to the short-term uptrend and drag the stock lower to ₹420 and ₹410 levels.

Significant medium-term supports below ₹410 are placed at ₹380 and ₹360 levels.

Investors with a long-term perspective can stay invested with a stop-loss at ₹370.

Kindly advise whether I can buy the stock of Eicher Motors at the current price.

TVS Prakash Rao

Eicher Motors (₹18,946.8): The stock has been on an intermediate-term downtrend since registering a new high at ₹33,483.9 in September 2017. Medium as well as short-term trend are also down for the stock. It trades well below the 50- and 200-day moving averages. However, the stock found support in the band between ₹18,200 and ₹18,800 in January and again in May this year and bounced up.

 

The stock currently tests this key support. A strong fall below this band will strength the downtrend and drag the stock lower to ₹17,000 and ₹16,000 levels in the medium term.

On the other hand, a strong rally above ₹20,500 will alter the short-term downtrend and take the stock higher to ₹21,500 and ₹23,000 in the ensuing months. You can wait and consider buying above ₹20,500 with a stop-loss at ₹18,200.

Key resistances beyond ₹23,000 are placed at ₹24,000 and ₹25,000.

Send your queries to techtrail@thehindu.co.in

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