Hindalco Industries in a long-term uptrend

Long-term investors can stay put with a stop-loss at ₹140

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

What is the short and medium term outlook for Hindalco Industries and Vedanta?

Neelam Mayani

Hindalco Industries (₹191): After registering a multi-year low of ₹58.5 in February 2016, the stock of Hindalco Industries has been on a long-term uptrend. The medium-term trend is also up for the stock. However, it encountered a key resistance at around ₹200 in February 2017 and has been on a short-term sideways consolidation phase in the band between ₹180 and ₹200. The stock faces difficulty in surpassing a significant long-term resistance in the band between ₹200 and ₹210.

A conclusive break-out of this resistance band can take the stock higher to ₹230 and ₹250 levels in the medium to long term. But a downward break of the lower boundary of the sideways movement at ₹180 will bring back selling pressure and pull the stock down to ₹170 levels. Further fall below ₹170 will alter the stock’s medium-term uptrend and pull it down to ₹160 and ₹150 levels in the long term. Investors with a long-term perspective can stay invested with a stop-loss at ₹140 levels. Conclusive fall below the long-term support range of ₹140 and ₹150 will start threatening the uptrend and pull the stock down to ₹125 and ₹110 levels. In the short term, the stock will continue to move sideways in the ₹180 and ₹200 range.

Vedanta (₹236.4): The long-term trend is up for the stock of Vedanta. Nevertheless, the short-term trend has been down since encountering a key resistance at ₹278 in early April 2017. The stock took support at ₹220 last week and witnessed a bounce back. Continuation of the current upmove can take the stock higher to ₹245 and ₹260 levels in the short term. Having said that, a strong downward break of the immediate support level of ₹220 can pull the stock down to ₹200 in the short to medium term. As long as the stock trades above the significant long-term support band between ₹160 and ₹170, the primary uptrend will remain in place. Investors with a long-term view can hold the stock with a stop-loss placed at ₹150. Strong upward break-out of the key resistance level of ₹280 will reinforce the long-term uptrend and take the stock northwards to ₹300 and ₹320 levels in the medium term. Further rally beyond ₹320 can take the stock higher to ₹345 and ₹380 levels in the long term.

I hold Camlin Fine Sciences bought at ₹114 and Uflex ₹170 per share. Should I hold or sell it?

Karnam Prabhakar Rao

Camlin Fine Sciences (₹90.4): Since encountering a key resistance in the range between ₹118 and ₹120 in early January 2017, the stock has been on a medium-term downtrend. But a vital support at around ₹89 halted the stock’s decline in March and again in early May. The stock currently tests this support. It trades well below the 50 and 200-day moving averages. Near-term outlook is negative for the stock. An emphatic downward break of ₹89 can drag it down to ₹80 and then to ₹76 in the short term. Immediate resistances are placed at ₹95 and ₹100. Next key trend deciding resistance is placed at ₹105. Strong rally beyond this level is required to alter the stock’s medium-term downtrend and take it northwards to ₹110 and ₹120 levels. Consider selling the stock on a fall below ₹89 and re-enter at lower levels.

Uflex (₹367): The stock of Uflex in an uptrend across all-time frames –– long, medium and short-term. After a strong break-out of a key resistance level of ₹325 in late April 2017, the stock recorded a new high of ₹382.6 on May 2. It has been moving sideways with a negative bias since then. You can consider taking partial profits off the table at this juncture and hold the stock with a stop-loss at ₹315. Strong plunge below ₹320 will alter the medium term uptrend and pull the stock down to ₹300 and then to ₹280 levels. A decisive rally above ₹380 can take the stock northwards to ₹400.

Send your queries to techtrail@thehindu.co.in

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