The Hindu Business Line
Long-term uptrend intact for Axis Bank
Breakthrough of the key resistance at ₹540 is needed to take the stock up to ₹580
Here are answers to readers’ queries on the performance of their stock holdings.
I purchased Axis Bank at ₹580 and Manappuram Finance at ₹76. Kindly advise on the medium term prospects for these stocks.
Axis Bank (₹472.7): The stock encountered a key long-term resistance in the ₹620-₹640 band in early September 2016, after a strong uptrend from the key base level of ₹380.
However, it reversed direction and has been on a medium-term downtrend since then. While trending down, the stock breached a key supports at ₹540 and ₹500 in October. But the stock took support at ₹440 and gained 3.6 per cent last week. The long-term uptrend line, which is intact, also cushioned the stock at around ₹440.
Though the stock can extend its rally in the near term, an emphatic breakthrough of the key resistances at ₹520 and ₹540 is required to alter the ongoing medium-term downtrend.
Such a breakthrough can take the stock northwards to ₹580 and ₹620 in the medium to longterm. You can consider averaging above ₹520 with a stoploss at ₹490.
On the other hand, a slump below the immediate support at ₹440 will strengthen the medium-tem downtrend and pull the stock down to ₹400 and then to ₹380 levels in the medium term.
Manappuram Finance (₹67.1): After a sharp fall in early November from its resistance at ₹104, the stock of Manappuram Finance hovered around ₹75, before resuming its downtrend. It tumbled almost 9 per cent last week. Further fall below the support level of ₹66 will intensify the downtrend and pull the stock down to ₹60 and then to ₹55 in the medium term. Consider exiting the stock.
Next key supports are at ₹50 and ₹45 levels. Conversely, only a strong rally beyond ₹90 will reinforce the bullish momentum and take the stock higher to ₹100 and ₹106. Immediate resistances are at ₹75 and ₹80 levels. Please give technical long-term outlook on Coal India.
Coal India (₹288.2): Following a strong rally in June and July 2016, the stock of Coal India encountered a key long-term resistance at ₹340 in early August. Since then, it has been on a medium-term downtrend. Shortterm trend is also down. Recently, the stock met with another key resistance at ₹315 and resumed its short-term downtrend. Last week, it plunged 6.2 per cent triggered by weak Q2 earnings. With this fall, the stock has breached a key mediumterm support at ₹300 and appears to have resumed its downtrend. It can now extend its downtrend and test next supports at ₹275 and ₹270. Further slump below ₹270 will strengthen the downtrend and drag the stock down to ₹240₹250 zone.
On the upside, the stock needs to break through the significant resistance at ₹340 to bring back bullish momentum. Further rally beyond ₹360 and ₹370 range is required to alter the long-term downtrend and take the stock up to ₹400. Next key resistances are placed at ₹420 and ₹440. Immediate shortterm resistances are at ₹300 and ₹315. Investors with a long-term perspective can make use of declines to buy the stock with a stop-loss at ₹240. Send your queries to email@example.com