Here are answers to readers’ queries on the performance of their stock holdings.
Please give me the long-term outlook for ICICI Bank.
Eldho Mathew
ICICI Bank (₹317.4): Since taking support around the key level of ₹150 (adjusted for stock split) in August 2013, the stock has been on a long-term uptrend. However, after recording an all-time high of ₹393 this January, the stock changed direction and started to decline.
This downward leg appears to be a corrective decline and, following a medium-term decline, the stock found support at around ₹285 and bounced back. The rally has been testing a key resistance level at ₹320 for almost a month.
An emphatic breakthrough of the resistance level is needed to reinforce the bullish momentum and take the stock northwards to ₹340 and then to ₹360 in the medium term.
Investors with a medium-term perspective can hold the stock with stop-loss at ₹295 levels. The inability to surpass ₹320 can restrict the stock to its sideways movement between ₹300 and ₹320 for a while.
A fall below ₹300 can pull the stock down to test the support at ₹285 levels.
The long-term uptrend will be in place as long as the stock trades above the significant support level of ₹270.
Long-term investors can consider holding the stock with a stop-loss at the level of ₹260.
A decisive breakout of ₹360 can take the stock higher to ₹400 levels in the long run.
I have purchased shares of Kaveri Seed at ₹850. Kindly suggest an appropriate price to average the stock for a long-term horizon of more than a year.
Sai Naveen
Kaveri Seed Company (₹758.9): The stock’s long-term trend is up and will remain in place as long as it trades above the important support band between ₹530 and ₹550.
Investors with a long-term view can stay invested with a stop-loss at ₹520 levels. The intermediate-term trend has been a sideways consolidation phase in a broad band between ₹700 and ₹1,020 since July 2014.
In February, the stock took support around the lower boundary and bounced back. It retreated after hitting the upper boundary and hovers now around ₹700 levels.
You can consider this level to average partially. However, as the medium-term trend is down, there is a possibility of breaching this support in the coming weeks.
Such a breach can pull the stock down to ₹650 and then to ₹600 levels, which is also a key support level to average.
Resumption of the uptrend can lead the stock northwards to ₹850, ₹950 and ₹1,020 levels.
I bought shares of GMDC at an average price of ₹107. Please advise on the best price to average the stock; whether I should hold or sell it.
Dhanam Murugesan
Gujarat Mineral Development Corporation (₹93.1): The stock encountered a key resistance at ₹180 in June 2014. Since then, it has been on an intermediate-term downtrend, forming lower peaks and troughs.
While trending down, the stock breached multiple key supports. Nevertheless, its downtrend came to a halt in March 2015 and is finding support in the band between ₹90 and ₹95. The indicators in the daily chart are showing some signs of optimism.
An upward reversal is in the offing. You can consider the current declines to average the stock with a stop-loss at ₹80.
A change of direction can take the stock higher to ₹100. The next key resistances are pegged at ₹120 and ₹135 levels in the medium to long term.
Send your queries to techtrail@thehindu.co.in
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