MCX tests key base zone

Breach of ₹1,100 can push the stock higher to ₹1,220, which is a key trend-deciding level



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

What are the short and medium-term prospects for Multi Commodity Exchange of India (MCX)?

Wasudeo Pat

Multi Commodity Exchange of India (₹993.3): The stock of MCX has been on a long-term uptrend since taking support at the low of ₹238 recorded in August 2013. However, itthe stock encountered a key resistance in the band between ₹1,350 and ₹1,400 in October 2016. It failed to surpass this resistance band in December and started to decline. Since then, the stock has been on an intermediate-term downtrend. While trending down, the stock decisively breached key supports at ₹1,220 and ₹1,100 levels which have turned into key resistances.

But the stock found support at a significant long-term base zone between ₹900 and ₹1,000 last week.

It has formed a hamper candlestick pattern in the weekly chart, signifying bullishness. An upward reversal from the current support band can take the stock higher to the immediate resistance level of ₹1,100 in the short term. Breach of ₹1,100 can push the stock higher to ₹1,220 which is a key intermediate-term trend deciding level.

Strong break above this level will alter the downtrend and strengthen the stock’s long-term uptrend. Subsequent targets are ₹1,350 and ₹1,400.

Having said that, a downward break of the current support band would reinforce the downtrend and pull the stock down to ₹900 and then to ₹850 in the short to medium term horizon. Long-term uptrend will be intact as long as the stock trades above ₹850 levels. Investors with a long-term perspective can stay invested with a stop-loss at ₹835.

What is the technical outlook for Redingtion (India) and NCC?

Suresh B

Redington India (₹126.9): The medium as well as short-term trends are up for the stock. However, the stock currently tests a key long-term resistance at ₹130. Strong break above this hurdle can take the stock higher to ₹140 and ₹150 in the medium term. But a downward reversal from this resistance can pull the stock down to ₹115 and ₹105. Strong plunge below ₹105 will mar the medium-trend and drag the stock down to ₹97 or even to ₹90 levels.

NCC (₹87.4): Last week, the stock of NCC tumbled 8.5 per cent after testing a key resistance level of ₹100. The stock now tests a key support at ₹83. Strong plunge below this level can pull the stock down to ₹77 and then to ₹75 in the short term.

Further downward break of the key support level of ₹75 can drag the stock down to ₹70 and ₹65 levels in the medium term.

On the other hand, a strong break above ₹100 is required to strengthen the intermediate-term uptrend and take the stock higher to ₹120 and ₹130 levels. Investors with a long-term view can stay invested with a stop-loss at ₹70 levels.

I have shares of IP Rings. Should I sell or hold at the current price?

Ranjith

IP Rings (₹146.5): The stock of IP Rings broke out of a key long-term resistance level of ₹100 in August 2016 and extended its uptrend. However, it encountered a resistance at around ₹160 in September and began to move sideways broadly in the ₹120-160 band.

Since then, the stock has been on an intermediate-term sideways consolidation phase. After testing the upper boundary at ₹160 levels recently, the stock is experiencing a corrective decline.

Decisive break above this level can take the stock higher to ₹180 and ₹200 levels in the medium term. But failure to move beyond the upper boundary can keep the stock continuing its sideways movement.

You can consider taking partial profits off the table if the stock fails to move beyond ₹160 levels.

Fall below the immediate base level of ₹141 can pull the stock down to ₹120 which is the lower boundary of the sideways movement.

Further fall below ₹120 can alter the stock’s uptrend and drag it down to ₹100 in the medium to long term. You can hold the stock with a stop-loss at ₹120 levels.

Send your queries to techtrail@thehindu.co.in

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