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

What is the medium- to long-term outlook for Jet Airways and BEML?

Rajeshwar Reddy

Jet Airways (₹303.1): The stock of Jet Airways (India) has been in an intermediate-term downtrend since recording a multi-year high of ₹883.6 in early January this year. This downtrend gained strength in the first week of May when the stock nose-dived 17.6 per cent decisively, breaking below a significant support at ₹600.

 

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Subsequently, it continued to decline, breaking next supports at ₹470 and ₹400 levels. Both the short- and medium-term trends are down for the stock. It is trading well below its 21 and 50-day moving averages. Last week, the stock fell 8.7 per cent, breaking below the vital support level of ₹330. However, the stock now tests a key long-term support in the ₹280-300 band. The downtrend can find some relief and take support in this base zone in the short term, following a sharp fall in a short span of time. Next supports below ₹280 are pegged at ₹250 and then in the ₹200-220 range.

The indicators and oscillators on the daily chart display positive divergence, implying a potential trend reversal is on the cards. Further, the weekly relative strength index hovers in the deep oversold territory, implying a corrective up-move. Therefore, investors with a contrarian view can consider buying the stock on dips with stop-loss at ₹270. An upward reversal from the key support band between ₹280 and ₹300 can take the stock higher to ₹350 and then to ₹380 or even to ₹400 levels in the medium term. That said, a plunge below ₹280 can drag the stock lower to ₹250 and ₹200 levels. In that scenario, investors can consider averaging the stock at these supports. Key resistances above ₹400 are at ₹470 and ₹500. To alter the intermediate-term downtrend, the stock needs to conclusively move beyond ₹600 levels.

BHEL (₹67.5): The stock of BHEL is on a downtrend across all time-frames. In January, it encountered resistance at ₹105 and resumed its long-term downtrend. The stock is currently trading above a significant long-term support level of ₹60. An upward reversal can take it up to ₹75 and ₹80 in the short to medium term. But, a slump below ₹60 can drag the stock down to multi-year lows and decline to ₹50. An emphatic breakthrough of the key resistance at ₹85 is required to alter the downtrend that commenced from the January high and take the stock up to ₹95 and ₹100. Investors should desist buying the stock at this juncture.

I have shares of Cupid purchased at ₹283. What is the outlook for the stock?

Giridhar

Cupid (₹185.6): After registering a 52-week high of ₹423.4 in January 2018, the stock changed direction and began to decline.

Since then, it has been in an intermediate-term downtrend. Although the stock had found support at around ₹225 in early June and moved sideways, it decisively breached this base last week. The stock plummeted 20 per cent in the previous week, breaking below the vital support level of ₹225.

 

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This fall strengthens the downtrend that has been in place since January. The stock can continue to extend its downtrend and reach the next supports at ₹160 and ₹120 in the medium term.

You could consider exiting the stock during rallies. Key resistances are at ₹200 and ₹225.

A strong rally beyond ₹225 is needed to alter the short-term downtrend and take the stock higher to ₹240 and ₹260 levels. Next resistances are at ₹280 and ₹300.

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