UltraTech Cement is broadly range-bound

A break of ₹4,550 is needed to strengthen the uptrend and push the stock up to ₹4,700


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

I hold shares of UltraTech Cement bought at ₹4,218 per share and UCO Bank at ₹39. What will be their outlook for the next 12 months?

J Parimelazhagan

UltraTech Cement (₹4,063.1): The stock of UltraTech Cement is in a long-term uptrend. However, it encountered a key resistance in the ₹4,500-4,550 band in May 2017. Since then, the stock has been in an intermediate-term sideways consolidation phase in the broad range between ₹3,800 and ₹4,500. Whenever the stock reaches the lower boundary, it takes support in the ₹3800-3,850 range and reverses higher; it took support in early April this year and moved up. As long as the stock trades above this significant support range, it has the potential to resume its long-term uptrend.

You can consider averaging the stock with a stop-loss at ₹3,750. A strong breach of the immediate resistance at ₹4,200 can take it up to ₹4,400 and then to ₹4,550 in the medium term.

An emphatic upward breakthrough of ₹4,550 is required to strengthen the long-term uptrend and push the stock higher to ₹4,700 levels in the long run.

But you can consider taking partial profits if the stock faces difficulty in surpassing the ₹4,550 levels. Conversely, if the stock plunges below the vital long-term support level of ₹3,800, it can decline to ₹3,600 or even to ₹3,400 levels. In that case, exit the stock and re-enter at lower levels.

UCO Bank (₹19.1): The stock is in a downtrend across all-time frames. In February, it conclusively breached a long-term key support at ₹29 and continued to decline without any corrective up-move. It is currently at a multi-year low. However, it is likely to take support at current levels. The indicators feature in the oversold territory, implying that a corrective up-move is possible. This can take the stock higher to ₹23 and ₹27.

To alter the short-term downtrend, the stock needs to break above ₹29. In that case, it can extend the up-move to ₹33 and ₹36. If it continues the downtrend, it can find support at ₹14.3. Breach of this level can drag the stock down to ₹10 in the long run. If you are a high-risk investor, average at current levels and exit in rallies with a stop-loss at ₹18.

Please let me know the short, medium, and long-term targets of SQS India BFSI.

Balakrishnan MR

SQS India BFSI (₹577.8): The stock of SQS India BFSI has been on a long-term downtrend since encountering a key resistance at ₹1,290 in January 2016. Nevertheless, it found support at around ₹400 in August 2017 and began moving sideways with an upward bias.

Last week, the stock jumped 12 per cent, accompanied with above-average volume, and breached a key long-term resistance at ₹550.

But it faces crucial resistance now at ₹600. With the bullish momentum, the stock has the potential to break above ₹600 and reach the short-term target of ₹650 levels.

Medium-term targets are at ₹700 and ₹750 levels. In the long term, the stock can trend upwards to ₹850 levels. Investors with a long-term perspective can stay invested with a stop-loss at ₹440 levels. Short-term supports are at the levels of ₹550, ₹500 and ₹450.

Send your queries to techtrail@thehindu.co.in

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