We zoom in on the prospects of HDFC Bank, as also the prospects of two other stocks тАФ Gandhar Oil Refinery (India) and CESC
I bought HDFC Bank shares during the recent fall. But the price is continuing to decline and I am now having a loss of 10 per cent. Should I continue to hold the stock or exit with a loss?
Naveen Kumar
HDFC Bank (тВ╣1,419.90): The stock is now poised at a crucial juncture. An important support is at тВ╣1,385. This was broken last week, but the price has recovered well from the low of тВ╣1,363. It is important to see if the stock is getting a strong follow-through rise from here or not. That will determine the next leg of move from here. Even if there is a strong rise from here, HDFC Bank share price has to rise past тВ╣1,550 to become convincingly bullish again. Only in that case, the doors will open to revisit тВ╣1,700-1,800 levels going forward.
As of now, there is no clear sign of a reversal. Bearish moving average cross-overs on the charts leave the big picture negative. So, failure to rise past тВ╣1,550 and a sustained break below тВ╣1,385 will increase the selling pressure. In that case, HDFC share price can fall to тВ╣1,250 and even тВ╣1,150 in the coming months. Since there is no clarity on whether the stock can sustain above тВ╣1,385 or not, we suggest you to exit the stock and accept the loss.
Is it a good time to buy Gandhar Oil Refinery (India) shares at current levels?
Shanmugam
Gandhar Oil Refinery (India) (тВ╣262.05): This stock has very limited historical data to do a detailed technical analysis since it got listed in November last year only. However, with the limited data available, we will try to give a short-term outlook. The stock price has been falling consistently since mid-December last year. It made a low of тВ╣228 and the price has risen back well from there over the last three weeks. The recent price action gives an indication of a trend reversal. Support can now be around тВ╣250. The chances are looking high for the stock price to go up to тВ╣300-305 over the next two-three months.
If you want to play this stock for the short term, then buy now at current levels. Accumulate on dips at тВ╣257. Keep an initial stop-loss at тВ╣244. Trail the stop-loss up to тВ╣268 as soon as the stock moves up to тВ╣275. Move the stop-loss further up to тВ╣278 when the price touches тВ╣285. Exit the stock at тВ╣298. The above-mentioned bullish view will go wrong if the stock declines below тВ╣248. In that case, the price can fall to тВ╣240 and lower again.
I have shares of CESC. My purchase price is тВ╣140. What is the outlook for this stock?
Elango, Coimbatore
CESC (тВ╣132.15): The stock witnessed some wild swings last week. The share price tumbled to a low of тВ╣116 and then recovered most of the loss to close the week at тВ╣132. There is a strong long-term resistance around тВ╣145, which is holding very well for now. Immediate resistance is at тВ╣136. A strong weekly close above тВ╣145 is necessary now to regain the bullish momentum. Only in that case, the doors will open for CESC share price to go up to тВ╣200 and higher levels. Else, we can get a fall back towards тВ╣115-110 in the coming weeks.
In such a scenario, CESC share price can oscillate in a wide range of тВ╣110-145 for some time. The price action on the weekly chart indicates that тВ╣145 is a strong resistance and a strong trigger might be needed to breach it. So, as seen from the charts, the chances are high for CESC share price to remain below тВ╣145 and fall to тВ╣115-110. So, it is better to exit the stock with minimum loss now.
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