Your Stock Portfolio. Sintex Industries breaches a key base

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

Can you give the technical outlook on Sintex Industries and Jain Irrigation?

Prachiti W

Sintex Industries (₹97.5): Since bottoming out from the August 2013 low of ₹17, the stock has been trending upwards. The stock decisively breached a key long-term resistance level at ₹115 in early January 2015 and extended its rally.

Nevertheless, the next long-term resistance at around ₹135 halted the stock in March. It subsequently changed direction after hitting the resistance and has been on a medium-term downtrend since March.

The price action since late January 2015 appears to be formation of a complex head and shoulders pattern with the neckline at ₹105.

Last week, the stock tumbled 8.7 per cent, breaking through the pattern neckline and strengthening the downtrend. Now, the stock pattern has a downward price target of ₹70; this could be reached in the medium-term horizon. Short-term trend is also down.

The stock has a key immediate support at ₹85 and a decisive fall can drag it lower to ₹70 level, which is a significant support level. Further fall below this level will mar the intermediate-term uptrend and drag the stock down to ₹60 and then to ₹50 in the ensuing months.

Therefore, investors with a long-term perspective should hold the stock with a stop-loss at ₹68. An upward reversal from the ₹70 or much higher at ₹85 levels can take the stock northwards initially to ₹105.

An emphatic rally beyond ₹105 can push the stock higher to ₹120 and ₹135 levels.

Jain Irrigation Systems (₹62.2): The stock’s rally encountered a significant resistance at around ₹130 in June and again in July 2014 and reversed direction. Since then the stock has been on an intermediate-term downtrend.

However, the presence of key long-term support in the band between ₹55 and ₹60 is providing base for the stock over the past one month.

Investors with a long-term perspective can hold the stock with a stop-loss at ₹55.

An upward reversal for the aforementioned support band can take the stock northwards to ₹75 in the short-term.

Only a decisive rally above the key zone of ₹95 and ₹100 will alter the intermediate-term downtrend and take the stock upwards to ₹130 once again.

But, failure to rally beyond ₹75 will keep the stock moving in a sideways consolidation phase in the broad range between ₹55 and ₹75.

Having said that, a strong plunge below the key support level of ₹ 55 will pull the stock down to ₹47 and then to ₹40 in the long term.

What are the prospects for Kalindee Rail purchased at ₹160?

KP Jayaram

Kalindee Rail Nirman Engineers (₹106.1): After a medium-term up move, the stock met with a significant long-term resistance at ₹165 in February 2015. This resistance capped the stock from rallying further that rally in the same month, and the stock started to decline.

It has been on a medium term downtrend since then. The short-term trend is also down. Moreover, the stock trades well below its 50- and 200-day moving averages.

After testing the key support at ₹110, the stock decisively breached this level by declining 5 per cent in the week ago.

Now, the stock’s downtrend can intensify and decline further down to ₹85-90 zone, which is a key medium-term support level.

You can consider averaging the stock at lower levels with a stop-loss placed at ₹80.

The resumption of the uptrend can encounter resistances at ₹125 and ₹135 levels. The next important resistances are pegged at ₹150 and ₹165 levels.

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