We zoom in on its prospects, as also that of two other stocks: Indian Oil Corporation and Venky’s (India)
I have bought shares of Tata Consultancy Services (TCS) at ₹3,320. What is the long-term outlook for the stock? Where can I accumulate?
TCS (₹2,993.55): The stock is in a strong downtrend. It made a high of ₹4,045.5 in January and has been falling since then. Recently, the stock declined below the key support level of ₹3,075. There is room for further fall towards ₹2,775. In a worst case, if TCS breaks below ₹2,775, there can bee a steeper fall to ₹2,600 and ₹2,500 over the next three months or a little more than that. So, if you want to accumulate this stock, you may have to wait. Buy in small quantity, say 40 per cent of what you intend to accumulate at ₹2,485. But the rest of the 60 per cent at ₹2,630. Keep a stop-loss at ₹2,340.
A consolidation between ₹2,500 and ₹3,000 is a possibility for some time. A strong rise past ₹3,100 thereafter will give a boost to the bullish momentum. It will then pave way for a revisit to ₹4,000-levels. Move the stop-loss up to ₹2,750 when the price moves up to ₹3,250. Move the stop-loss further up to ₹3,650 when the stock touches ₹3,920. A strong break above ₹4,000 can target ₹4,600-4,800 over the next couple of years where you can exit the stock.
I have invested in the stock of Indian Oil Corporation (IOCL). My buy price is ₹120. How far can it fall further from here? What is the outlook for this stock?
IOCL (₹70.35): The short-term outlook is negative. There is a danger to see a fall to ₹50 from here over the next two quarters. Thereafter, a fresh leg of long-term rally can begin. That rally might have the potential to take the stock up towards ₹140-150 over the next couple of years. If you intend to hold this stock for at least three years, then buy more at ₹60.
istock photo for BL | Photo Credit: iStockphoto
Investors with a long-term perspective who want to enter this stock afresh can also buy at ₹60. Keep a stop-loss at ₹42. Move the stop-loss up ₹70 when the stock moves up to ₹90. Move the stop-loss further up to ₹105 when the stock reaches ₹115. Exit the stock at ₹130. You may have to have a lot of patience to hold this stock.
What is the outlook for the stock of Venky’s (India)? Can it rise to ₹3,600 in the next one year?
Venky’s (I) (₹1,990.75): The trend is down. It looks highly impossible for the stock to move up to ₹3,600 in the next one year. The reason is that the current downtrend has room to fall further from here. The first support is near ₹1,500. If the stock breaks below it, a deeper fall to ₹900 cannot be ruled out. This fall can happen by this year-end or in the first quarter of 2023. Thereafter a fresh rally can begin targeting ₹3,300 over the next two years or more.
Investors with a long-term perspective can buy 30 per cent of intended amount at ₹1,600. Buy the rest of the 70 per cent at ₹1,050. Keep a stop-loss at ₹840. Wait for the target of ₹3,300. Move the stop-loss up to ₹1,100 as soon as the stock moves up to ₹1,800. Move the stop-loss further up to ₹2,400 when the stock touches ₹2,850 on the upside.
Published on July 16, 2022