Technical Analysis

REC in a medium-term uptrend

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

An emphatic break above ₹155 will take the stock up to ₹185 in the coming months

 

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

What are the short- and long-term prospects for the stocks of REC and Tata Elxsi?

Nandkishor Lele

REC (₹154.8): Following an intermediate-term downtrend, the stock of REC found support in the band between ₹90 and ₹100 in July 2018.

This band cushioned the stock in September and December 2018.

Subsequently, the stock changed direction and has been in a medium-term uptrend since taking support from the above-mentioned band.

In December, the stock breached key 50- and 200-day moving averages and hovers well above them. Short-term trend is also up for the stock. Currently, the stock tests a key resistance in the ₹150-155 band.

An emphatic break above this resistance band will underpin the uptrend and take the stock up to ₹165 and ₹185 over the medium term.

A strong rally beyond ₹185 will alter the intermediate-term downtrend and push the stock up to ₹200 and ₹220 in the long run.

Those with a long-term perspective can stay invested with a long-term stop-loss at ₹110. But key supports are at ₹130 and ₹120.

An emphatic fall below ₹130 will alter the short-term uptrend and drag the stock down to ₹120. The stock has a significant long-term support in the ₹115-120 band.

A conclusive fall below ₹115 will alter the medium-term uptrend and drag the stock down to ₹100 and ₹90 in the long term.

Tata Elxsi (₹961.9): After recording a new high at ₹1,491 in July 2018, the stock reversed direction and began to decline. Since then, it has been in an intermediate-term downtrend.

It fell sharply in September and October 2018, but found support at ₹826 in March 2019 and began to trend up. It has been in a short-term uptrend since then.

However, the stock lacks strength to break above the key resistance level of ₹1,000.

Such a break will strengthen the uptrend and take the stock up to ₹1,080.

A further rally beyond ₹1,080 will push the stock up to ₹1,150 and ₹1,250 levels.

A fall below ₹900 will drag the stock down to ₹850 or ₹800.

I am a long term investor; I bought the stock of Inox Wind at an average of ₹150. What is the future?

Ramesh Kumar

Inox Wind (₹69): Across all time-frames — long, medium and short — the stock is in a downtrend. In the near term, it is range-bound between ₹64 and ₹72. A strong break below ₹64 can drag the stock down to ₹57. On the upside, a strong rally beyond ₹80 is needed to alter the short-term downtrend and take the stock up to ₹90 and ₹100.

To alter the medium-term downtrend, it needs to decisively move beyond ₹110 resistance level.

Such a break can take it higher to ₹130 and ₹150 levels. You can consider averaging the stock on a strong rally above ₹80 with a stop-loss at ₹67.

Send your queries to techtrail@thehindu.co.in

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