Outlook is bullish for Jindal Steel

The stock gained almost 11 per cent last week, breaching a key resistance

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

Please discuss the technicals of Jindal Steel & Power and Tata Global Beverages for the medium to long term.

Rajesh Reddy

Jindal Steel & Power (₹204.9): In early 2016, the stock of Jindal Steel & Power found support at around ₹48 and changed direction. Since then, the stock has been in an intermediate-term uptrend. Medium as well as short-term trends are also up for the stock. However, the long-term trend is down and will be in place as long as the stock trades below the key long-term resistance level in the band between ₹390 and ₹400. The stock has been in the limelight over the past two weeks as it continues its upward journey. Last week, the stock gained almost 11 per cent with above average volumes, breaching a key resistance at ₹195 levels.

Investors with a long-term perspective can buy the stock in declines with a stop-loss placed at ₹130. The stock can extend the current uptrend and test resistance at ₹235 and ₹250 levels in the medium term. A strong breakthrough of the significant resistance at ₹250 can push it higher to ₹300 and ₹340 levels in the long run. Medium-term outlook is bullish for the stock. It trades well above its 50- and 200-day moving averages. Investors with a medium-term view can buy the stock in corrective declines while maintaining a fixed stop-loss at ₹160. Key immediate supports for the stock are at ₹195 and ₹175. Only a strong plunge below ₹175 will alter the short-term uptrend and drag the stock down to ₹160 and then to ₹150 in the medium term. To alter the intermediate-term uptrend, the stock needs to conclusively decline below the crucial support level of ₹130.

Tata Global Beverages (₹315.5): The stock of Tata Global Beverages breached a significant long-term resistance level of ₹175 in August 2017. Subsequently, it began to accelerate and trend upwards sharply. On Friday, the stock extended the rally by gaining 3 per cent and registered a new high at ₹316.5. However, the indicators and oscillators in the daily as well as weekly charts are featuring in the overbought territory, implying that the stock is due for a short-term corrective decline. Hence, traders with a short to medium-term perspective should tread with caution in the coming weeks. The stock can test supports at ₹300 or even at ₹275 levels in the medium term.

Resumption of the uptrend can take the stock higher to ₹330 and ₹350 in the long term. A conclusive downward breach of the key support at ₹275 will mar the medium-term uptrend and pull the stock down to ₹240 and then to ₹220 levels. Investors with a long-term horizon can stay invested with a long-term stop-loss placed at ₹205. Only a strong fall below the key support in the band between ₹210 and ₹220 will alter the stock’s long-term uptrend. Next supports are at ₹190 and ₹175 levels.

I bought shares of Sarla Performance Fibers at ₹49. Should I hold or sell these stocks?

R.M. Gurav

Sarla Performance Fibers (₹70.9): Following an intermediate-term downtrend, the stock found support at ₹41 in August 2017. Since then, it has been trending up. It took support at ₹50 in mid-December and rebounded sharply, after a corrective decline. The stock emphatically breached its long-term resistance at ₹60 in the third week of December by skyrocketing 30 per cent. There has been an increase in volume over the past two weeks. The stock trades well above its 50 and 200-day moving averages. But it now faces a vital resistance ahead at ₹75. A decisive break above this can take the stock northwards to ₹80 and then to ₹85 or even to ₹90 in the medium to long term.

Consider taking partial profits off the table if the stock struggles to breach key resistance level of ₹75 and stay invested with a stop-loss at ₹55. Significant immediate supports are at ₹65 and ₹60. A tumble below ₹60 will impact the short-term uptrend and drag the stock to ₹55 and ₹50 in medium term.

Send your queries to techtrail@thehindu.co.in

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