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Here are answers to readers’ queries on the performance of their stock holdings.
Is this the right time to buy LIC Housing Finance and Jet Airways for the long term? What is the medium to long-term technical view for these two stocks
Jayarami Reddy, Nagananthini Kannan
LIC Housing Finance (₹543.1): Since taking a long-term support at around ₹150 in September 2013, the stock of LIC Housing Finance has been in a long-term uptrend.
However, after registering a new high at ₹794 in June 2017, it began to decline and has been in an intermediate-term downtrend since then. Following a 50 per cent fibonacci retracement of the previous long-term up leg, the stock found support in the ₹470-490 band in early March 2018. The key long-term support in the band between ₹470 and ₹490 can provide strength to the stock in case of a corrective decline. Investors with a medium to long-term perspective can buy the stock in dips with a fixed stop-loss placed at ₹460 levels.
An emphatic break-through of the significant resistance ahead at ₹570 will strengthen the bullish momentum and take the stock higher to ₹600.
Further break above ₹600 will reinforce the up-move and push the stock northwards to ₹650 and ₹670 levels in the long run. Key immediate supports are at ₹520 and ₹500 levels.
A decisive plunge below ₹470 will alter the long-term uptrend and drag the stock down to ₹450 and ₹400 levels, which are the next key base levels to watch out.
Jet Airways India (₹622.7): The stock of Jet Airways India is poised above a significant long-term support level of ₹600. This level also coincides with 50 per cent fibonacci retracement level of the prior uptrend.
On the other hand, the stock has been in a medium-term downtrend since encountering a key resistance at ₹870 in early January this year.
The stock has breached key supports at ₹690 and ₹650 while trending down, which has turned into key barriers. Investors should trend with caution as long as the stock trades in the sideways band between ₹600 and ₹650. A strong tumble below ₹600 will weaken the uptrend and drag the stock down to ₹575 and ₹550 levels.
Further decline below ₹550 can drag the stock lower to ₹500 or even to ₹470 levels in the medium term. On the upside, a decisive breach of ₹650 can push the stock northwards to ₹690-700 zone in the short to medium term. Next key resistances are placed at ₹740 and ₹790 levels.
I have shares in Reliance Communications bought at ₹33. What should be the target price?
Ravindra Gurav
Reliance Communications (₹15.9): Last week, the stock plummeted ₹22 per cent and breached a key support level at ₹18. Across all time-frames, the stock is in a downtrend.
After a sharp rally in late December 2017, the stock met with a vital resistance at ₹36 and resumed its primary downtrend. Since then, it been in a medium-term downtrend. Short-term trend is also down.
The stock trades well below its 50 and 200-day moving averages. Outlook is bearish for the stock. Exit the stock in rallies.
It can continue to decline and test supports at ₹14 and at ₹11 in the short to medium-term horizon. Significant resistances are at ₹18, ₹20 and ₹22.
A strong rally above ₹22 is needed to give some relief rally to the stock and take it higher to ₹25 and ₹27 levels.
Send your queries to techtrail@thehindu.co.in
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