Here are answers to readers’ queries on the performance of their stock holdings.
I want to buy Indraprastha Gas and V-Guard Industries for the long term. What is the technical outlook for these two stocks?
Y Suneeta
Indraprastha Gas (₹294.9): Following a medium-term downtrend from the 52-week high of ₹344 (adjusted) in early January 2018, the stock found support in the band between ₹242 and ₹252 in late May. It re-tested this support band in late June and changed direction, triggered by a positive divergence in the daily and weekly indicators. Since then, the stock has been in a nascent uptrend. While trending up, it breached the key resistances at ₹265 and ₹280. The stock has surged 16.5 per cent with good volume over the last two weeks.
However, the stock now tests a significant resistance at ₹300 and its 200-day moving average. Hence, there could be a near-term corrective decline which medium-term investors can consider as a buying opportunity and accumulate the stock with a stop-loss at ₹240. An emphatic break above ₹300 can take it northwards to ₹320 and ₹340 over the medium-to-long term.
Conversely, a strong below the key support level of ₹242 can bring back selling pressure and drag it lower to ₹225 and ₹220 in the long run. The long-term uptrend will remain in place as long as the stock trades above ₹190. Long-term investors can stay invested with a stop-loss at ₹180 levels.
V-Guard Industries (₹213.8): The stock gained 3.5 per cent with an above average volume on Friday, decisively breaching a key resistance at ₹206 and 50-day moving average as well. For the week, the stock had surged 10.6 per cent conclusively, breaking above a long-term resistance level of ₹200. But a key resistance is ahead at ₹220.
An emphatic breakthrough of this barrier can take the stock up to ₹235 in the short term. A strong rally beyond ₹235 can lift the stock to ₹250 levels in the medium term. An eventual break above the medium-term hurdle at ₹250 will reinforce the long-term uptrend and take the stock to new highs.
On the other hand, a fall below the immediate support level of ₹200 can drag the stock down to ₹190 and ₹180 levels in the short-to-medium term. However, a plunge below the significant long-term support level of ₹180 will begin to threaten the primary uptrend and drag the stock down to ₹170 or ₹160 levels.
Long-term uptrend will remain in place as long as the stock trades above ₹150 levels. Investors with a long-term horizon can stay invested with a stop-loss at ₹140 levels.
Send your queries to techtrail@thehindu.co.in
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.