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

I am a long-term investor and bought GAIL at ₹391 and Union Bank of India at ₹163. Which is the best price to average these two stocks?

Raajesh Reddy

GAIL (₹360.5): The stock of GAIL tumbled 6.5 per cent last week, breaking an immediate support at ₹375 levels and 50-day moving average. With this fall, the stock appears to have resumed its intermediate-term downtrend that has been in place from the October 2014 peak of ₹551. However, the stock has a significant support ahead at ₹350 levels.

A fall below this level can’t be ruled out as the downtrend is getting strengthened. Therefore, a conclusive fall below ₹350 can pull the stock down to ₹330 and then to ₹300, which is the next key support level.

You can consider averaging in the zone between ₹300 and ₹330 with a stop-loss at ₹285 levels. An upward reversal from the key support level can take the stock higher to ₹400.

An emphatic breakthrough of ₹400 is needed to alter the medium-term downtrend and take the stock northwards to ₹430 and then to ₹470 levels in the long term. Key immediate resistances are placed at ₹375 and ₹400 levels.

Union Bank of India (₹170.3): Following a medium-term downtrend from the key resistance level of ₹250, the stock found support at ₹130 in early May 2015.

A significant long-term support at ₹130 provided a base for the stock. It also got some cushioning at around ₹140 levels this June and began trending upwards. The stock jumped more then 5 per cent with good volumes, breaching a key medium-term resistance level at ₹155 levels in the previous week.

The indicators and oscillators in the daily charts feature in the positive area signifying upward momentum. You can consider averaging the stock on minor declines with a stop-loss at ₹130 levels. The short-term trend is up for the stock. However, it faces a key trend-deciding as well as significant resistance zone ahead at the ₹180-190 band.

A conclusive break-out of this band is required to alter the medium-term downtrend and take the stock up to ₹210, ₹230 and ₹250 levels in the medium to intermediate-term horizon. To alter the long-term downtrend, the stock has to emphatically break the ₹250 barrier. Such a breakthrough will accelerate the bullish momentum and take the stock northwards to ₹300 in the long run.

I have shares of Apollo Tyres purchased at the rate of ₹176. Please suggest the short, medium and long-term targets.

Gopal Setty

Apollo Tyres (₹175.5): After a downward reversal and sharp fall from the levels of ₹250 this February and March, the stock of Apollo Tyres found support at ₹160. Since then, the stock has been on a medium-term sideways consolidation phase in the ₹160- 190 range.

The recent up move for the lower boundary is paused at a mid-way facing hurdle at ₹180 levels. Strong breach of the immediate hurdle at ₹180 can take the stock higher to the upper boundary at ₹190 levels.

Only an emphatic rally above ₹190 will pave way for an up move to ₹205 and then to ₹215 levels in the medium-term. Inability to surpass the upper boundary will keep the stock consolidating sideways.

However, a decisive fall below the long-term support level of ₹160 will reinforce the bearish momentum and drag the stock down to ₹135 and then to ₹120 level in the medium term.

In that scenario, investors can consider exiting the stock and repurchasing at lower levels with a stop-loss at ₹100.

Send your queries to techtrail@thehindu.co.in

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