Comments
Here are answers to readers’ queries on the performance of their stock holdings.
What is the short-to-medium term outlook for Reliance Capital and Reliance Infrastructure?
Y Suneeta
Reliance Capital (₹436): The stock of Reliance Capital had encountered a significant long-term resistance at ₹780 in September 2017 and changed direction. Since then, it has been in an intermediate-term downtrend. However, after recording a 52-week low at ₹334 in mid-July this year, the stock halted its downtrend and reversed upwards.
The stock has been in a nascent short-term uptrend since then. But it now tests a key resistance in the ₹435-450 band; the 200-day moving average is also poised in this range. An emphatic breakthrough of the barrier will strengthen the short-term uptrend and take the stock up to ₹500 and ₹550 levels over the medium term. A strong rally beyond ₹550 is needed to alter the intermediate-term downtrend and take the stock northwards to ₹600 and ₹700 in the long term.
On the other hand, failure to move beyond ₹450 or ₹500 will keep the stock consolidating sideways in a wide range between ₹350 and ₹500 in the medium term. An eventual upward break of ₹500 will pave the way for an up-move to ₹550. That said, if the stock falls below the immediate support levels ₹400, it can decline to ₹350 levels. Investors with a long-term perspective can buy the stock on declines, with a stop-loss at ₹340 levels. Supports below ₹350 are placed at ₹320 and ₹300.
Reliance Infrastructure (₹416): The stock has been in an intermediate-term downtrend from the January 2018 peak of ₹588. The short-term trend is also down. However, it found support at ₹364 in mid-July and began to move up. While trending up, the stock decisively surpassed its 21- and 50-day moving averages. At ₹420, both the descending channel pattern trend-line and a key resistance exist.
An upward break-out from ₹420 would signify an upside break-out of the channel pattern. Such a move can take the stock higher to ₹450 and ₹470 levels in the short-to-medium term. A conclusive breakthrough of ₹470 is required to alter the downtrend and take the stock up to ₹500 and then to ₹550 levels in the medium term.
Key supports are pegged at ₹380 and ₹365 levels. Investors with a long-term view can buy the stock with a stop-loss at ₹365. Conversely, exit the stock on a decisive plunge below ₹365 levels; subsequent supports are at ₹340 and ₹320 levels.
What is the medium and long-term view on IFCI?
Naresh
IFCI (₹17): After encountering a key resistance at ₹34 in this January, the stock changed direction and has been in an intermediate-term downtrend. It decisively breached key supports at ₹24, ₹20 and ₹16 levels while trending down. Nevertheless, the stock found support at ₹14.5 in late June and mid-July and began to move up. It had conclusively breached the vital resistance level of ₹16 in late July, which turned into a key support once again.
Taking support from this base level, the stock jumped 6 per cent, accompanied by good volumes last Friday. The indicators in the weekly chart are recovering and there are signs of bullishness. A strong rally beyond the immediate resistance at ₹18 can pave way for an up-move to ₹20. Further break above ₹20 can push the stock up to ₹22 and ₹24 levels. Having said that, only a strong up-move above ₹24 is needed to change the downtrend and take the stock higher to ₹28 and ₹30 levels in the medium term. Supports below ₹16 are at ₹14.5 and ₹13.
Send your queries to techtrail@thehindu.co.in
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.